Cramer's Mad Money - Method to the Market's Madness (10/27/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday October 27.

U.S. Steel (NYSE:X), PPG (NYSE:PPG), Exxon Mobil (NYSE:XOM), Transocean (NYSE:RIG)

Stocks are going haywire this week, up and down with no apparent rhyme or reason. U.S. Steel (X) was hammered, while PPG (PPG) performed well. Exxon Mobil (XOM) had a strong showing, while Transocean (RIG) sank. What's going on? At the end of the month hedge and mutual funds want to show a strong performance and are desperate to mark up their largest holdings. To avoid making their strategies obvious, they start buying up stocks a week before the end of the month. For those who want to cash in, Cramer suggests selling on Thursday, but investors who are looking for bargains should wait for next week.

Off the Charts: Netflix (NASDAQ:NFLX), Sony (NYSE:SNE)

When looking at Netflix's (NFLX) daily chart, the stock seems to be a sell, but the monthly chart tells another story; the $40 level, which had been resistance for Netflix is now support, and technician Dan Fitzpatrick sees the stock going to $70. The fundamentals support a bullish thesis. Cramer noted the stock reported a solid quarter, raised guidance and announced a deal with Sony (SNE) to rent movies through Playstation 3. The model of free internet and competitive prices is working well for the company, which is seeing a 28% jump in subscriber growth, 48% gain in net income year-over-year and a growth rate of 18.6%. Although Netflix's stock has increased 80%, it still has further to run, says Cramer.

Following Up: Deckers (NASDAQ:DECK), Under Armour (NYSE:UA), Neutral Tandem (NASDAQ:TNDM)

Cramer commended Pennsylvania governor Ed Rendell for not taxing natural gas in his state and promoting the adoption of natural gas as a bridge fuel. Following up on his recommendation of Deckers (DECK) over Under Armour (UA) a few weeks ago, Cramer noted Deckers reported a strong quarter, as he predicted, and is up 15% while Under Armour's stock was down 12% on lowered guidance.

One stock that stumped Cramer during an earlier Lightning Round was Neutral Tandem (TNDM). After looking into the company, Cramer is bullish because of its link with the mobile internet tsunami and its 23% growth rate.

Mad Mail: Bank of America (NYSE:BAC), Sun Microsystems (JAVA)

Cramer would buy Bank of America (BAC) and thinks worries over a secondary offering are unfounded. He would "take the money and run" from Sun Microsystems, which has received a takeover bid.


Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round and his Stop Trading! Picks.

Get Cramer's Picks by email-- it's free and takes only a few seconds to sign up.

Seeking Alpha is not affiliated with Jim Cramer, CNBC or