Cramer's 'Mad Money' Recap: Marking Time

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NEW YORK ( TheStreet) -- The market is just marking time, Jim Cramer told "Mad Money" viewers Tuesday. He said the markets are digesting their gains and giving up just enough to rattle the traders, but not enough to shake out the true believers.

Cramer explained that pullbacks and reversals are a natural part of the stock market, as companies aren't rockets and don't take off in a straight line. This is great news for patient investors, he noted, as pullbacks often give investors great prices to buy in. It may seem counterintuitive, even against human nature, to buy into weakness when everyone else is selling, but that's exactly the right time to buy.

Take Apple ( AAPL), one of the market leaders and a stock Cramer owns for his charitable trust, Action Alerts PLUS. Cramer said that it wouldn't surprise him to see Apple retreat to as low as $560 a share. While that may seem like a huge move to novice investors, in percentage terms it's the same as a $65 stock pulling back to $55 a share, Cramer said.

The bears have plenty of reasons to hate this market, said Cramer, including the fact that the markets have had a big run, trading volumes remain low, the VIX volatility index remains anemic and gold has begun to rally. But the fact also remains that the worst-case scenarios in both Greece and Spain haven't materialized, meaning the end of the world just might not be now after all.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with John Richels, president and CEO of Devon Energy ( DVN), an oil and natural gas producer whose shares have fallen 3% so far this year. Devon Energy is also an Action Alerts PLUS holding.

Richels admitted that Devon has seen some challenges this year, starting with an unseasonably warm winter that caused natural gas prices to plummet ever further followed by weakness in Canadian oil and natural gas liquids prices. He noted that oil prices are cyclical in nature and most of the challenges facing Devon are temporary. The company continues to focus on high-return projects, he said, and building its asset base.

When asked about the company's continuing transition from natural gas to oil, Richels noted Devon increased its oil production by 26% year over year and expects to be up by 40% by year's end. Richels also reminded viewers Devon only completed the sale of its offshore assets last year, so many of its new projects are still in their early stages.

Cramer said Devon remains an inexpensive stock that trades below its net asset value. He said investors who believe in natural gas prices rising should consider the company.

Cramer's Fantasy Team, Part 2

Continuing with his "Mad Money Fantasy Stock Portfolio" started Monday, Cramer introduced his picks for wide receivers, the fast-moving momentum stocks that make big things happen.

Cramer's first pick was Walt Disney ( DIS), the well-rounded company with a host of great businesses including theme parks, cable TV, film studios and, of course, the ESPN sports franchise. Disney is firing in all cylinders, said Cramer, which is why it was able to boost its divined by 50% in December. Shares trade at just 14.2 times earnings despite the company's 12.5% long-term growth rate.

As his second choice, Cramer picked Google ( GOOG), the undisputed king of online search and a company whose shares are just off their 52-week highs. Cramer said the worries about Google were overblown and, unlike Facebook ( FB), Google doesn't have to prove itself to advertisers. Shares of Google trade at 13.7 times earnings with a 15.7% growth rate.

Finally, Cramer went with Cisco ( CSCO), the networking equipment maker that delivered a spectacular and unexpected quarter which allowed the company to raise its dividend to a solid 2.9%. Cramer said like Disney, Cisco is also firing on all cylinders and is seeing strength in its telco and data center businesses.

Lightening Round

Here's what Cramer had to say about callers' stocks during the "Lightning Round":

Emerson Electric ( EMR): "I missed the bottom in this stock but this one can rise from these levels."

CenturyLink ( CTL): "You need to wait for a pullback. It has a better business model than Windstream ( WIN)."

3D Systems ( DDD): "They have a hot business model and are doing very well.

Total SA ( TOT): "A poorly run oil company with a good yield. I like Chevron ( CVX) more."

Limited Brands ( LTD): "Upon further review, people realized this was a good quarter. I would be a buyer."

EMC ( EMC): "They got hit. I liked their acquisition. I want to sell Dell ( DELL) and buy EMC."

Off The Charts

In the "Off The Charts" segment, Cramer offered viewers some "Chart Reading 101" with the help of his colleague Carolyn Boroden.

Cramer said that at its core, a chart that is making a series of higher highs and higher lows is a bullish one, while one making a series of lower lows and lower highs is a bearish one. The key, he said, is knowing when that trend is making a turn.

Boroden used a daily chart of VMWare ( VMW) to illustrate a change of fortunes. After peaking in April, VMWare was bearish for months, making lower lows and lower highs. But that all changed on July 18, when shares closed above its previous high and fell to a higher low just days after. Boroden noted that after that move, VMWare has been in bull territory.

Cramer also looked at the stock of Lululemon Athletica ( LULU) as an example of a stock making the bear to bull transition right now. Shares of Lulu have been hammered since May, but last Friday reached a higher high, a trend confirmed by its five-day moving average crossing over its 13-day average. Boroden felt that Lululemon could reasonably hit $70 a share from these levels.

Other stocks fitting the pattern included LinkedIn ( LNKD), whose recent pullback makes for an excellent entry point, and Joy Global ( JOY), a stock that saw a trend change in July but still has two to seven points of upside remaining.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off against Peter Thiel, the Facebook director who recently sold 20 million shares of the company he's supposed to be championing.

Make no mistake, Cramer said, Thiel had every right to sell and it was perfectly legal for him to do so. But that does not make it OK.

He said the move is outrageous given how far shares have already fallen and how much scrutiny the company has faced since its botched IPO. Thiel is supposed to be looking at the longer-term value of the company, said Cramer, and anything would have been better than how this deal transpired.

Cramer said everyone associated with Facebook should be ashamed at this move, but in an era of hubris and greed this news may just be par for the course.

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here: Scott Rutt.

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To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, CVX DIS, DVN and EMC.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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