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Stocks Are In A Trough - Cramer's Mad Money (4/19/16)


Media stocks are poised to rally.

Wait for a pullback in Kellogg and J.M. Smucker before buying.

Broadcom is superior to Skyworks Solutions.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money Program, Tuesday, April 19.

Stocks are not hitting a bottom. In Cramer's opinion, they are in a trough. Being in a trough indicated that the numbers for a company have bottomed which is the reason it is rallying. "Troughs give you sustained moves. We have had number cut after number cut after number cut from all of these bedraggled banking, mineral, mining and machinery companies. Now the raising numbers begins, so don't be too quick to sell," said Cramer.

This was clear from the earnings from Goldman Sachs which reported poor numbers and drop in profit. The stock went down in pre-market trading only to close up 2.3%. "A stock that rallies after that putrid quarter is a stock that says, look at me, the worst is over, get on board because we're ready to roll up river," said Cramer. There were similar patterns in other banking stocks like Morgan Stanley (NYSE:MS) and Bank of America (NYSE:BAC).

Even after looking at the earnings and listening to conference call, Cramer thinks the stock was in a trough. "Or if you want to put it another way, Goldman Sachs has been down so long it looks like up to me," he added.

It was not just the banks. The mineral and mining stocks have become too cheap to ignore. Alcoa (NYSE:AA), though reported lesser than expected earnings has reached the same level it was before its earnings. Freeport-McMoRan (NYSE:FCX) has been staging a comeback and so have Chevron (NYSE:CVX) and Exxon (NYSE:XOM) even though the price of oil hasn't jumped that much. These are all signs of stocks in a trough. The Baltic freight index also shows positive signs for China.

All the money coming into such stocks is being rotated from safety stocks, consumer packaged goods and utilities, and high growth stocks like cyber-security plays. Cramer thinks the money...