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Love him or hate him, Jim Cramer has a knack for getting behind momentum stocks and he's often right. When he realizes he is wrong on a particular growth stock or speculation, he usually gives a mea culpa before these crash or at least admits when he is wrong as he recently did regarding Netflix (NFLX). To his credit, he did tell people to sell NFLX at around $180 or so when the stock began its rapid decent toward a more realistic valuation at today's quote in the $120's. Cramer, like anyone in the investment business, has gotten it wrong many times in the past (an example was his recommendation to buy NFLX at $300), but his general strategy of "buy and homework" works when combined with a growth investment strategy that sets stop orders along the way in strong bull markets. The real trick to any trend following, high beta growth investment approach is to know when to get out and move to cash.

Cramer's enthusiasm for the markets is undeniable but he is also a student of the moves of "Dr. Copper." The price of copper has forecasted many recessions and stock market/economic booms in the past. Cramer must be getting cautious on stocks, because copper is down some 25% from recent levels over the past two weeks. Clearly, investors who look to copper to forecast the price of equities must be getting extremely bearish right now.

Taking a look at three of Jim's favorite growth names from earlier this year, an opportunity exists to short sell many of the "Candies" stocks over a longer term time horizon in my opinion because of extreme overvaluation. In essence, the buzz around these stocks was helped by Cramer's blessing, but Wall Street's resounding endorsement of these stocks in the recent past makes betting against the herd an actionable trading idea because the stocks are priced for perfection in an environment that is clearly punishing risk.

Chipotle Mexican Grill (CMG): Chipotle is a great company but a risky stock in my view. Cramer recently said that Chipotle longs were "getting greedy" and I couldn't agree more. Chipotle management has been talking about opening an Asian themed restaurant for many months, and it should come as no real surprise that the company made good on its promise to shareholders. Chipotle is a great business, but the overall economy is not doing well and a restaurant chain trading for 55X earnings during a recession faces severe multiple contraction risk over the longer term. Given the tepid macro economic background longs may have bitten off more burrito than they can chew and could be subject to some Montezuma style revenge in coming weeks and months. I strongly feel the great "burrito bubble" could pop at any moment, which is why I am betting against a rally in CMG at these levels on a longer term basis via selling at the money call options. Of course, I may very well be wrong on CMG -- cutting losses is advisable when shorting a growth stock if the story changes or your analysis proves to be incorrect.

Amazon.com (AMZN): Amazon is another top notch company who's stock looks overvalued at current prices. Cramer has stated that technology shares are too exposed to Europe for investors to own right now and I tend to agree with that thesis. The QQQ, for example, has barely lost 10% from its YTD highs while the Russell 2000 is off almost 30% from its highs reached earlier this year. Keep in mind, I think the Russell is also overvalued at current levels. That said, I find Amazon to be one of the most overvalued stocks in today's market and I believe a short position taken in Amazon at this price will pay off in the same way that Netflix shorts made serious money if they had placed a new short position when NFLX traded for $300 a share. Amazon is highly leveraged to the consumer and the recession is by no means over. Amazon does not "pay you to wait" via a dividend and if the momentum shifts to the downside, stop loss orders could be triggered and the stock could take out the summer lows in the $175 range.

Saleforce.com (CRM): Cramer hasn't abandoned Salesforce just yet, but there is no doubt in my mind that he understands how vulnerable this stock is to a sudden crash given that the company's non-GAAP PE ratio is over 600X. Salesforce could face slower growth due to competition in the future, and the company already trades for 8.9X revenues. While I was impressed to see that the company landed a contract with the US government, I still feel the overall financial picture at Salesforce warrants a $70 stock price and not a $120 stock price, which is why I am staying short CRM for the long term via long in the money puts and short at the moneycalls.

Source: Time To Short These 3 High-Flying Cramer Favorites