Monday, January 12, 2009

In the Friday edition of "Stop Trading," Jim Cramer said which aspect of oil and gas still "might be hanging on"?


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The Call

Question: In the Friday edition of "Stop Trading," Jim Cramer said which aspect of oil and gas still "might be hanging on"?

Answer: drilling
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Stop Trading!: Sell the Oils

Not even a cold, snowy winter is enough to drive up oil and gas prices, Cramer said during Friday’s Stop Trading!. The drillers, unlike the rest of the sector, might be hanging on, “but that won’t last.”

“I think that this group is still up very big from its low,” Cramer said, “and it should be sold.”

Halliburton , Transocean , Schlumberger – none of them work right now.

Retail is struggling, too. Cramer said the fact that J. Crew Group and Coach continue to decline is “the most worrisome sign to me,” adding that the Coach same-store sales report Thursday was “simply awful.”


“These stocks somehow are not done going down,” Cramer said.

In health care, there’s a debate as to whether CVS Caremark is suffering because pharmacy-benefits management is too tough a business right now or because MedcoHealth Solutions is taking share. Cramer leaned toward the latter, saying MHS is a buy.

And lastly, investors wondering why KB Home moved higher for most of Friday’s trading session need only listen to the company’s fourth-quarter conference call. Some of KB’s hardest-hit markets are rebounding, management said. With houses at affordable levels and interest rates low, these areas are now buyer-friendly. California, in particular, showed clear signs of a return.

“It’s a very positive story,” Cramer said, though KB Homes’ balance sheet wasn’t strong enough for him to recommend the stock right now.


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