GO
Loading...

Cramer: Don’t Misread Goldman’s Apple Downgrade

Tuesday, 2 Apr 2013 | 6:55 PM ET
No Huddle Offense: More Downgrades for Apple
Tuesday, 2 Apr 2013 | 6:58 PM ET
Mad Money host Jim Cramer explains why he foresees more downgrades for Apple.

(Having trouble with the video? Click here!)

On Wall Street, pros are buzzing about Goldman's decision to take Apple off its Conviction Buy List. Cramer, however, has a word of caution; don't jump to the wrong conclusion, he says.

That is don't think it's a sign of the bottom. According to Cramer, it's not.

"The bad news here is that there are some 60 firms who follow Apple and 5/6ths of them still are recommending it," Cramer said.

And that's just far too many firms remaining bullish for Cramer to call a bottom.

"For a bottom, the negativity needs to reach a crescendo level," Cramer explained. "I need to see Barclays, Bernstein, Oppenheimer, Cowen, Raymond James, JP Morgan, Deutsche Bank, and most importantly, long-time bull Piper Jaffray lower the boom on the company," said Cramer before the sentiment shift becomes significant.

Without that, Cramer thinks the path of least resistance will remain lower. That's not to say the downgrade isn't a step toward a bottom – it probably is.

------------------------------------------------------------------
Read More from Mad Money with Jim Cramer
Cramer: Top Stocks to Keep Winning?
These 10 Companies to Unlock Value?
Small Drug Stocks with Promising Pipeline
------------------------------------------------------------------

"We are starting to get that key disgust factor," said Cramer, but only starting. Cramer thinks a lot more disgust is needed. Nonetheless, "The Goldman downgrade is certainly part of the process," he conceded.

Adam Jeffery | CNBC

But, "As long as the stock stays in the low $400s, and not the $300s, where people will be afraid to downgrade because of the cash position, this stock is still fair game (for the shorts)."

All told, Cramer remains cautious of Apple.

"I'd like to give you the all-clear on Apple but I can't," he said. However Cramer does think developments are worth monitoring.

"The big hatred is now game on. Watch for analysts to break ranks, cut numbers, and, say how disappointed they are in management. When sentiment gets that negative, then and only then, will it be safe to buy again."


Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.