NEW YORK (Real Money) -- Here's the way the bulls could frame this one. The part of the market that has been horrendous of late is the part that's represented by social, mobile and the cloud. The combination of a weirdly disliked last quarter from Salesforce.com (CRM), heavy selling in Facebook (FB) after the extremely good quarter and the over-exuberance for the Twitter (TWTR) IPO that now feels like a hangover has been weighing on this group for several weeks now.
These were the first stocks that went down.
Now I am sure you will be hearing that these are the first stocks that can take us back up.
I don't want to buy into this thesis, because the cohort is too narrow, and it seems a little circumstantial, aided by the bizarre all-day rumor that Facebook was going into the S&P 500. The stock got clocked after hours, but it didn't give up all the gain.
That said, the group is so oversold that I think it should rally, and the one that probably has the most bullish case to rally is the one that last reported, the total anathema to all value investors: Workday (WDAY). When I interviewed CEO Aneel Bhusri a few weeks ago, I didn't know how powerful an uptake this company is getting in the world of finance. Major banks are switching to its systems, systems that I thought would be de facto Oracle's (ORCL) for the asking. Workday's quarter was pretty breathtaking, and while the stock is rich as all get-out, it would be the stock to watch if you believe the leadership thesis and buy with calls, if you want to be a gunner with the belief that the move has legs.
I remain convinced, by the way, that there is nothing "wrong" with Salesforce.com. Dreamforce created a lot of hoopla, and it all kicked off with the company's very good numbers. When it sold off, the theories began to fly, once again, about earnings quality. I think the company has bent over backwards to explain what and how it reports. I believe in it, and it is roughly even with the S&P 500. Again, it's no value play, not by a long shot, but it's another one that could be monitored or bought with calls if you agree with my thesis.
Finally, Yelp (YELP) caught a bid today, and that company's stock has still been reeling from that gigantic secondary offering, 3.75 million, priced at $67. Keep an eye out for that one. If it can get above that price, I believe it would be off to the races. Once again, the quarter was excellent, but not many stocks can sustain a 234% increase and not give up some of the gains when that amount of supply hits the market.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long FB.
Editor's Note: This article was originally published at 6:51 p.m. EST on Real Money on Dec. 4.