Mad Money

Cramer: Are Pullbacks Presenting Buy Opportunities?

No Huddle Offense: Spotting Buying Opportunities

All too often you hear 'weakness is an opportunity' said Cramer. Of course, that's not always the case. How about now?

Back in the days when Cramer worked on the trading desk, he and his colleagues often heard analysts pound the table that every pullback was a buying opportunity.

But they knew that wasn't the case. They would sometimes say "here comes the BO!" In other words, in that circumstance the buying opportunity stunk.

There are plenty of investors in the market who are bearish and currently subscribe to the BO philosophy. "There are many who want to fight this tape," Cramer explained. "They think that stocks are overvalued because they keep getting revised upward on little news."

But - as pros so often say, price is truth, and Cramer can't ignore that the price action in the market has been positive – very positive.

"Think back a month ago when Schlumberger preannounced a weaker quarter because of pricing pressure on North America," said Cramer. The stock slid from $73 down to about $68. As of close on Friday January 25th the stock had recaptured those losses and then some.

Positive price action.

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Steve Cole | Vetta | Getty Images

The same is true for Accenture. "The company recently reported earnings and gave an outlook that chilled me," said Cramer. The stock flew from $71 down to $65. But on Friday, it took out the former level.

Again, positive price action.

Late last year, Starbucks reported a worrisome number citing Europe as a potential headwind. The stock reacted by heading down to $49. By Friday, the stock traded $57. Procter & Gamble has also experienced a similar move.

More positive price action. "This pattern has almost become ingrained," Cramer said.

As a result Cramer believes the best philosophy for investing is to expect, "This market to forgive and forget and then go higher."

Fighting the sentiment will probably end poorly. "Therefore, most of the weaknesses you see in individual stocks are, indeed, buying opportunities."

Call Cramer: 1-800-743-CNBC

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