CNBC’s Jim Cramer on Tuesday laid out a strategy for equity investors trying to navigate this week’s Nasdaq Composite slide.
The tech index fell 1.76% in the first two trading days, compared to the 0.6% gain in the Dow Jones Industrial Average and the modest 0.15% drop in the broad S&P 500.
The host of “Mad Money” said he sees this rotation of tech stocks as the result in large part of investors taking profits on winning positions and deploying profits in parts of the market that have taken. late.
But that won’t last forever, Cramer said on Tuesday while pointing viewers to a cohort of tech stocks that he says will be first at their lowest. He called this group “hot reds” and said it was the primary place to look for buying opportunities in this industry.
“These are companies that have done absolutely nothing wrong.… They have reported results above and below expectations, forecast higher growth, but their stocks are still being squashed this week,” said Cramer, by checking the following companies: Alphabet, Microsoft, Cloudflare, Palo Alto Networks, Roblox, AMD and Nvidia.
“They are all doing wonderfully. I won’t mince my words: these are the names you want to buy first,” said the former hedge fund manager. “These top notch stocks tend to bottom out before all the others.”
Cramer said his appeal was rooted in the analysis of tech-driven massive sales over his nearly 40 years of experience on Wall Street.
“Surprisingly, almost every time these multi-level stocks sell, the drop lasts… three days from the start, then they start to stagnate before rising again, like nothing really happened, at the except for an upset of weak hands and a refill, ”Cramer said.
“It’s a bit tricky with the holidays,” he added, referring to the closure of the US stock market on Thursday because of Thanksgiving, “but these high ranking officers should reach their minimum level by Friday”.
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