Cramer: Reliable trader 'tell' surfaces in Apache

(Click for video linked to a searchable transcript of this Mad Money segment)

Jim Cramer has a lot of experience buying and selling stocks. And along the way he's picked up a few tricks.

That is, there are certain signals or events that happen time and again before a stock moves higher or lower.

On Wall Street professional traders call those signals 'tells.' And Jim Cramer says a powerful 'tell' surfaced last Friday in Apache.

Andrew Burton | Getty Images

"Wells Fargo downgraded Apache, the big independent oil and gas producer, from outperform to market perform, telling investors to swap out of this one and instead buy supposedly higher quality names like EOG, Anadarko and Devon," Cramer explained.

The downgrade was significant because analysts at Wells had been advocates of Apache for quite some time. "Therefore, it would have been logical to expect this downgrade to really damage the stock."

Now here's the "tell."

"The stock didn't fall. Not at all. Instead, Apache turned out to be Fort Apache. The stock shrugged off the Wells Fargo downgrade and actually managed to rally a buck and a change."

That's a rare set of events and when they happen, pros such as Jim Cramer take notice.

"When a stock can't be stopped by an important downgrade, that's a terrific "tell" that it's headed higher, possibly much higher."

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And digging down into the fundamentals Cramer believes valuations, buybacks, assets and other catalysts all provide powerful reasons for shares of Apache to rally in the weeks and months ahead. "Apache has been a magnificent turn around story," said Cramer. "I don't see that changing. I think it easily goes to $120 and possible a lot higher."

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