Jim Cramer's 'Mad Money' Recap: Don't Miss This Rotation Back Into the Nasdaq

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After spending time in the penalty box, it was the FANG stocks that led the market higher today, Jim Cramer told his Mad Money viewers Tuesday. The rate hike playbook is being dusted off as the Federal Reserve gets ready to tighten.

When inflation is on the rise and taking interest rates higher, investors naturally seek out stocks that can weather the storm, Cramer told viewers. That's why shares of Facebook (FB) , Amazon.com (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) , formerly Google, were higher today.

Cramer said Facebook and Google, both Action Alerts PLUS holdings, along with Amazon and Netflix, all have growth that's not dependent on the economy. That's also why investors were warming up to Apple (AAPL) , another Action Alerts PLUS core position, in hope that the company's growth will continue.

Even the beleaguered biotech sector sprang back to life today, with Celgene (CELG) up 2.5% and Gilead Sciences (GILD) up 1.6%.

Investors also are anticipating the scheduled summit between tech leaders and Donald Trump later this week to see if they can broker a peace between Washington and Silicon Valley.

Why are Cramer and Jack Mohr even more bullish on Newell Brands? (NWL) Find out what they're telling their investment club members about Newell's strategic acquisitions with a free subscription to Action Alerts PLUS.

Off The Charts

In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang to review the charts of the teen apparel retailers, that most difficult-to-own sector that caters to the hardest-to-please demographic on earth.

Lang looked at a weekly chart of Zumiez (ZUMZ) and said this skateboard-themed retailer is testing its 200-week moving average and has formed a double-bottom formation. He was also bullish on the chart's Chaikin Money Flow, or CMF, oscillator.

Turning to Tilly's (TLYS) , Lang felt the stock's surge in August, followed by consolidation and another surge was also bullish, as it occurred on strong volume with a strong CMF.

Likewise with Francesca's (FRAN) , which soared 28% last week on strong earnings. With the stock above the 200-week average and the RSI and CMF oscillators both signaling "buy," Lang felt this $21 stock could see $30 a share.

Finally, Lang looked at discount retailer Five Below (FIVE) , noting a triangle pattern accompanied by a bullish crossover in the MACD indicator.

While Lang was a fan of all four names, Cramer's analysis was that only Five Below was worth owning, with the others being far too risky, especially after their recent gains.

Dow 20,000 

The old school money managers are back to their old tactics, Cramer told viewers, and that's great news for laggards like IBM (IBM) .

Cramer explained that as the Dow Jones Industrial Average creeps toward 20,000, money managers are looking for names that have lagged the index, hoping for some quick gains. That makes IBM, which is up 22% for the year, but is still some 50 points from its highs four years ago, a prime candidate for buying.

Stocks that are in motion tend to stay in motion, Cramer said, and IBM appears to be getting its groove back after the company announced plans to hire more workers in the U.S. IBM also has a strong stock buyback program and a 3.7% dividend yield that will attract these fund managers.

Real Money: Cramer asks if Dow 20,000 is the market's kryptonite?

Coming up on this episode of Mad Money: Cramer interviews Andy Mattes, CEO of Diebold Nixdorf (DBD) and Bill Stein, CEO of Digital Realty Trust (DLR) . Plus, don't miss the Lightning Round: which stocks is Cramer bullish about?

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