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Cramer: Beware of Stocks at 52-Week Highs

With the Dow Jones Industrial Average on track for nine consecutive days of trading gains and six consecutive record closes, Jim Cramer urges caution when investing in stocks that are leading the charge.

"I'm worried about the nine straight days," he said.

"Look back at what's happened since the millennium began, there have been a few instances where we've been able to go eight, we've never been able to go nine," Cramer said. "All I'm saying is find stocks that aren't up if you're going to take a shot because the 52-week high stocks — Dow stocks that are at 52-week highs — don't appeal to me as much as down-and-outers."

(Read More: Cramer Turns Cautious, Says Buyers Should Wait)


For instance, Cramer pointed out that he's building a thesis on casino stocks, which he explained Tuesday night on "Mad Money." He said he's "not crazy about the casino stocks, but they're down big." Cramer says that a technical and fundamental case can be made for stocks like Las Vegas Sands andCaesars Entertainment.

Cramer also said to look at the bulk shippers. "Those are historically not up," he said. "Yes, I am scraping the bottom of the ship barrel. This is where I'm looking. "

(Read More: Cramer: 3 Stocks About to Play Catch-Up)

For instance, "I'm not longer looking at Verizon, which is about to break out," said Cramer, "because when that breaks out I feel that I'm late, not early. Verizon is not Google."

"There are so many that still are not stretched," Cramer said, referring to earnings multiples and potential for dividend increases. "Before I start paying 18-19 times earnings, I'm going to look at tech, where a lot of tech is at 10-11 times earnings, because I think that is better. Banks, because we have the stress tests tomorrow, they could be better, although they acted toppy yesterday and that was a concern to me."

(Read More: Cramer: After 2,000% Gain, Now What?)

Disclosing that his charitable trust just bought Oracle, Cramer called the business software firm "intriguing" because it trades at an 11 times earnings multiple despite reports that hardware sales have bottomed. "I never mind paying up 11 times earnings for a consistent grower run by really terrific people," Cramer said. "This business is strong and Oracle has got a very strong European business. I find that somewhere to look."

"I'm looking for places that haven't 'hit them out' yet," Cramer said. "Find stocks that are down."

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

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