Danger ZoneCramer's "Danger Zone" stock Tuesday was Calpine ( CPN). Cramer believes the company's "management is not any good," and its debt load will force the company to file bankruptcy. "You can lose everything" in this stock, he said.
Market Sector SpotlightCramer discussed drug stocks in Tuesday's market sector spotlight. Commenting on Sanofi-Aventis ( SNY - Get Report), Cramer said some investors have big expectations for the company's new drug, Acomplia. But, he believes there will be a lipid drug that will be bigger. Either way, he's sticking with his positive view on the stock. Cramer said he also likes Syneron Medical ( ELOS).
Cramer's CallersIn response to a question about GameStop ( GME - Get Report), Cramer said some investors are selling the name because stores are out of stock of the Xbox. This is a short-term problem, said Cramer. Long term, there will not be a shortage, he said. The GameStop story will continue to be strong into 2006 and 2007 as the video game cycle fully kicks in. GameStop's stock is volatile, he said, but when it goes down, "that's when you have to pounce." Commenting on Under Armour ( UARM), Cramer believes it will bounce at some point. He would consider buying a partial position for a trade with the stock down Tuesday. About SanDisk ( SNDK), Cramer said whenever there is a big drop in a stock, such as Monday with this name, don't sell into the initial drop. "Wait for a bounce, and then you do sell," he said.Cramer said investors sold SanDisk on Monday as people began to realize the shortage in flash memory may soon be alleviated. When that happens, you can't be in the stock, he said. Cramer would look to sell SanDisk on a bounce to $50. SanDisk traded at $49.75 late Tuesday. Commenting on how to recognize when a short squeeze is ending, Cramer said investors should look for an event that increases the supply of stock available to trade. Usually such an event takes the form of large insider-selling or a secondary offering. "Supply kills a short squeeze, not the earnings," he said.