RealMoney Radio Recap: Selling Siesta

The market is experiencing a nice rally today, and it should be enjoyed, Jim Cramer said on his "RealMoney" radio show Wednesday.

However, it's not because Ben Bernanke spoke, he said.

Rather, the Standard & Poor's oscillator, a measure of whether the market is overbought or oversold, came in at minus four today -- that's the reason behind the rally. We are oversold, Cramer said.

"When we get minus four on the S&P oscillator, we always get a snapback rally within a couple of days," he said.

Sellers have become exhausted and have stopped selling. Although Bernanke did speak today, he said the same thing he always does -- that he's going to look at the data.

It's not like he doesn't see what's been going on in the market, Cramer said, adding that people need to understand Bernanke did not trigger this rally, but that people don't want to sell when stocks have gone low enough.

We have plenty of bad news right now, Cramer said.

Before the market opened this morning, the consumer price index number that was awful, he said, adding that ADC Telecommunications ( ADCT) reported a massive shortfall and Yahoo! ( YHOO), which he owns for his charitable trust, Action Alerts PLUS, missed its quarter and is down hideously.

The fact that we are oversold is what's driving the rally. We need to focus on what really drives the tape, and it's that we got too negative, he said.

He advised people to sell a little bit of their gains on the way up.

"When you're up huge, you take a little off," he said. "Remember we're going to get overbought again. Enjoy yourself, but don't be greedy."

Ben Gets It!

Ben Bernanke said a lot of things in front of Congress, Cramer said, but perhaps nothing was more important than the Fed chief's comments on energy.

Bernanke said inflation is the biggest risk in U.S. and the economy, and while it seems to moderating but it could flare up. Cramer said Bernanke's comments were neutral enough that people could embrace them if they are negative or positive.

But one thing in particular that Cramer liked was Bernanke blaming inflation on energy. He liked this because it has the added advantage of being true, Cramer said.

Bernanke is saying that inflation is beyond our control, Cramer said, adding that he was beginning to believe Bernanke thought he could tackle oil prices with rate increases.

"Hallelujah!" Cramer exclaimed. "He gets it."

Tech Takedown

If tech stocks have been the whipping boy of the market, then there's one stock in particular that took a beating today, he said.

"The 'hoo' was taken out of Yahoo! today," Cramer said. The company missed numbers and announced the delay of its Panama project. "When you have a technical problem and you are a technological company, you know you're going to get smoked," he said.

Even though Yahoo! is probably not finished going down, Cramer said it is not in the same boat as Amazon ( AMZN) and eBay ( EBAY), which are perennial underperformers.

Although he said he believes Yahoo! will eventually get it right, for now it has become a show-me stock.

Cramer estimated Yahoo! could probably go down 10 points, but there are so many companies that want to buy Yahoo!, that he doesn't believe it will go that low. He estimated the company bottom to range between $15 and $25.

After announcing a reduced earnings forecast and lower sales of copper and fiber connectivity, ADC Telecommunications said carrier consolidation and wireline/wireless convergence could create a strong potential for ADC to connect with customers' next-generation services.

However, consolidation could be devastating for ADC, Cramer said. Although he said he normally likes consolidation because it creates a more rational industry and less competition, it is not happening in the case of telco equipment stocks, he said.

GM Drives Ahead

General Motors ( GM) is a company that has done everything right, and the stock has fallen too far, Jim Cramer told a caller.

GM looked at its problems and cut costs and fixed its balance sheet. He recommended holding on to the stock.

Although there is a possibility that Marvell ( MRVL) won't report the most beautiful quarter in the world, it's wrong that its stock has been cut in half, he said.

He advised a caller to hold on to Marvell at least until it reaches the $40s. It was recently at $37.

Bancolombia ( CIB), the largest bank in Colombia, is a stock that is going high, Cramer told a caller. He recommended not selling it until it goes to $30. It was recently at $24.

Cramer told a listener who asked about Dow Chemical ( DOW) to hold it until it goes to $40 and then to get out. It was recently at $37.

Apple ( AAPL) has come down a great deal, Cramer said, while advising a caller to spilt the difference and take half the shares off the table now and let the rest run.

He told one caller to swap out of Chipotle Mexican Grill ( CMG) and get into McDonald's ( MCD), which he said just reported a stellar quarter.

When a caller inquired about Medtronic ( MDT), Cramer said medical-devices stocks are cheap, but he'd rather be in St. Jude Medical ( STJ), as he believes St. Jude has the potential to be acquired, whereas Medtronic is likely to be a company that acquires another company.

Medtronic is OK, but St. Jude is better, he said.

Cramer recommended Pepsi ( PEP) to a caller who was looking for a good for first investment. If you don't like Pepsi, he advised buying Bristol-Myers ( BMY), which he owns for his charitable trust.

At the time of publication, Cramer was long Bristol-Myers and Yahoo!

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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