Jim Cramer calls hot sectors that could use a pullback

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Jim Cramer calls hot sectors that could use a pullback

CNBC’s Jim Cramer on Thursday suggested that the post-election market has been extreme, with big wins and big losses. He cited sectors that have seen big gains recently, explaining the reasons why they may be booming – but warned that they need to cool down before investors consider buying them.

“We have a lot of stocks that are very popular in this market right now,” he said. “But many of them deserve love, just not at these levels.”

Cramer pointed to a sharp rise in business software stocks, saying that it looks like these companies with products that big companies want can’t do wrong. He came up with a name Salesforce, Service Now, Work day, Datadog again Atlassian. He also suggested that most of these companies will not be affected by any trade problems with China that may arise under the administration of Donald Trump-elect, which puts a lot of money in the stock. Still, Cramer notes the stock’s “parabolic moves.”

The market also seems to favor companies with subscription models, he said with a nod Costco, Netflix, Spotify again Amazon and their recurring income streams. Another growing sector is banking, Cramer noted, adding that the measures are appropriate as investors expect a more relaxed regulatory environment when Trump takes office.

Cramer also highlighted two sectors that he said are “most hated,” but could bounce back, including pharmaceuticals and semiconductors. Both Merck again Pfizer they produce promising drugs, he said. Pfizer saw shares rise on any good news, he added. Cramer suggested that the party’s worries over Trump’s controversial choice to run the Department of Health and Human Services — who is no doubt vaccinating Robert F. Kennedy Jr. – he may be put more in prison because he has already been beaten.

In semiconductors, Cramer concluded that those companies have suffered in part because some feel that new artificial intelligence-powered PCs haven’t taken off.

“In a group that seems to be entering a bottomless pit, I call with interest, but only if we get a few days when they stop sinking and we have more clarity from President-elect Trump, who will take more wood stocks,” said Cramer. “We need to see the bottom of the abyss, unless, of course, we are already out of it .”