Techies or Fundies: Who’s Right About Semi Stocks?

Cramer thinks tech stocks right now are “cheaper and more loathed” than they have been since 2003, when the dust of the dot-com collapse was still settling. He said the fundamentals are good and getting better, and the prices are “unbelievably inexpensive.”

Too bad this doesn’t translate into an automatic win for investors. Not in this market.

The money managers that set prices, because they trade is such large volume, are worried about slowdowns in Europe and Asia. Those fears are then magnified by traders at home who use double- and triple-leveraged exchange-traded funds to get ahead of the action. And the high-frequency traders either follow these “pajama party” traders or amplify their moves.

This is why there’s a disconnect right now between the companies and their stocks. So if investors want to know where some of Mad Money’s favorite semiconductor names are headed – like Broadcom , Cirrus Logic , Marvell Tech , NVIDIA , SanDisk , Xilinx , NetLogic and Intel – then they have to watch the basket that the money managers use to trade them: the SOX, or Philadelphia Semiconductor Index.

Technical analysis is another big driver behind stocks these days, because all of these money managers consult the charts. That’s why Cramer asked a top technician, Dan Fitzpatrick, for his expert take on the SOX. What did the charts say? And did Cramer think the fundamentals trump the technicals in this instance, meaning that some semi stocks should be bought? Watch the video to find out.

When this story published, Cramer’s charitable trust owned Intel.

Call Cramer: 1-800-743-CNBC

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