buy. >> karen. >> target, if they miss chance to buy. >> juppe call spreads are the best trade on the board. >> thanks for watching. i'm scott wapner. don't forget to catch halftime tomorrow noon eastern, "fast money" "mad money" with jim cramer begins right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, just trying to make you a little money. my job is not to pertain entertain you but educate you so call me on 1-800-cnbc. many people are relying on months-old surveys to make their investment decisions. i get that. they allow the media to say the

dow climbed 52 points, s&p gained, nasdaq advanced .16% because of some piece of highly publicized data that rarely has anything to do with the action. except of course for the viewers and readers who have no idea how there is a linkage that matters, although this was the 19th street tuesday that the market was up. me? cramer? cramer don't play that game. i don't sit here and fret about the fed's next move. oh, man. or the big picture indicators that everyone else is talking about. why? because i rely on cold, hard cash! and the businesses that generate it. money talks, fed governors and stats walk. that's my philosophy. and whose money am i talking about? how about all the money home depot made when reporting its incredible quarter this morning. it's important to point out right at the top that home depot and its ceo, frank lake, are both unique in that they are the

domnality housing related retail and one of the best ceos. so as the despot as like to call it, because it's the king of the home reports a total blowout number, we can always say, hey, you know what, that's because nobody executes it like this orange giant. but that's not what i want to discuss. i always say read the conference calls, they determine what's really happening. and in the case of home depot you don't get what's happening at the despot. you get what's happening in america. because the business of home depot is america's business. first home depot gives you the state of the state, rather amazing. posted a store growth figure meaning the stores in this country that did much better than last year at this time. which is a princely sum. more important, where these numbers are coming from, notably astonishing double digit growth in california. never forget that california is a fifth of this great country. in fact, california and arizona now even vegas -- vegas, nevada.

that had been a hideous black hole. >> the house of pain. >> are all coming back strong. >> house of pleasure. >> second, while the consumer had been the driving force in the comeback taking the stock from 28 in 2011 to $78.71, this was the first time that the despot said the professional customer outpaced the growth for the consumer segment. the professional. for five years now, the pro customers underperformed the consumer. people, this is a huge shift. i've been waiting for this shift, because it shows you -- and at last, the next leg of the housing recovery, the nation housing recovery, i may add, is about to begin. that is fabulous news. it implies that finally the small businesses involved in housing are coming back. ben bernanke, did you hear that? did you read this call? please do it tonight. i know you watch the show. all right, well, maybe watch the show. i don't anyway. this means hiring is getting stronger and employment, better times to come. it gets even better. as blake says, and i quote, the

u.s. macro data on housing continue to improve. private fixed residential investment, as a percentage of gdp picked up for the sixth consecutive quarter, 2.7%. why? because, and i quote again, increasing house information, more people having kids, more people moving out of their moms and dads. price appreciation and hiring housing turnover. sound good? well, get this. it's going to get better. blake says the credit availability is still tight. still tight to get credit. approval ratings for credit cards are declining. customers coming in from the sidelines, didn't have the tako scores. you don't need a 710 to get that credit card. and that means as things get better there's still plenty of demand, pent-up demand out there. and the brilliant chief financial officer pointed out the customers are still cautious with credit. again, that's going to get better over time, because as tomet told us, those with negative equity in their homes, under water in their mortsz, they spend -- i thought this was

amazing, spend $1,000 a year on their residence, but those who have 100% positive equity, not under water, do you know they spend three times that? can you imagine how much spending awaits us as our housing prices rebound? now we have our macro, which means more than the gibberish, jibber jab and federal reserve governors. maybe they ought to take a permanent vacation. boy, is it starting to get better. to me sounds like the early innings of the recovery. and those who think it's a bubble, already run, go read the call! it isn't just the macro that i care about, because we're trying to make a little moola on "mad money." home depot's conference call is a treasure trove of investment ideas. first, over and over in this call, management stressed the biggest ticket items, appliances, are selling extraordinarily well, and that means whr, whirlpool, for sure. the stock has had a run, but, well, you just buy this thing on a pullback or, hey, general

electric, i know it doesn't necessarily move the needle, but stay tuned. and then we got a monster call out for moen and delta faucets. why don't we go out and buy some fortune brands at masco? i though they have run. masco got a double shoutout, came up especially strong in this quarter. home depot also specifically called out l.e.d. light bulbs for showing, i quote, strong results. that's cree. cree sells direct to home depot while the rest is done through middle men under pressure to stop selling cree's products because of phillips. kitchen, plumbing, decor, electrical, all outperforming the average compable store game. so were tools. do you mind if we buy some stanley black & decker, as swk is the dominant player. if you stick around, i'll tell you why it's a positive, and

i've got to tell you, my charitable trust, 8, come on that would be sitting there. you know what else did well? how about plywood and gypsum board. know what that says to me? i know they had a big run. don't sell them. do not ring the register. also, throughout the call we got multiple nods to the strength in lumber and mill work. now, i hate, hate, hate to stray from the friendly confines of home depot. i do feel better about telling you, though, about cramer fave lumber liquidators ll, buy it if it goes on its periodic swoons. what a horse that's been. now that we know what's in store, how about the store itself? what can i say? if we're just scratching the surface of the professional builder and contractor, and in quarter one of outperformance by the small business builders after six years of a down turn, i think all these projections of 1 million homes being built are going to be a prelude to a housing boom, not inflatable, but real based on people saving up for a down payment and then

building place that is retain their value. as home prices stabilize from a return to the historic 2 to 3% abdomin abdominal annual increase in pricing, we will have triple what they're spending in home, maybe more as take fico score testing eases. you still have to own hd. what else? how about the fact that home depot bought $2.1 billion or approximately 27.2 million shares of its stocks this quarter. you know what that suggests to me? it's reason to be a buyer of home depot yourself, especially based on things people are worried about. in the end, here's what i say. you know what, they -- these guys are not making nearly as much money now as i think they ultimately can. so here's the bottom line. in hope depot's fax, figures and analysis, we trust. and those point to the beginning of a housing boom and a business that punches way above its weight in the u.s. economy.

people ask me if the market is going to stay hot. i say, listen to home depot. i know frank blake didn't say it. but it is, indeed, true that the business of home depot is america's business. if that's the case, i want to invest in america. through the aisles of the company, we on "mad money" lovingly call home despot, because it is indeed the czar of fortune. chris. chris! >> caller: jim cramer, thank you. thank you. listen, thank you for all that you do. we appreciate it so very much. i wanted to ask you -- listen, your information about the market is spot-on. >> thank you. >> caller: you're welcome. i wanted to ask you, i've heard some talk about fast food companies possible weakness there. but i'm looking at a six-month chart of wendy's company. and to me, it looks that -- that chart looks good. is there a way that wendy's can go higher. >> there is, but if wendy's go

higher, mcdonald's to 110, panera, 200, chipolte, 400. all those things occur if wendy's is good, because that's a rising tide. that's a virtual norwegian cruise line of food stocks. all right, anyway, home depot's numbers are hammering the point home. i've got a sam cook version of this hammer. i'm not just -- peter, paul and mary. the numbers point to an american housing boom. and if that's the case, invest in america, invest in home depot. "mad money" will be right back. coming up, dashing debut? from the cloud to the foundations of the housing recovery, two new stocks are expected to hit the street this week. cramer's giving you a heads-up on whether they could be worth a look before they hit the ticker in know your ipo. and later, the whole package? danny grocer, whole foods has

had quite a month. can its commitment to quality carry the stock higher? or is the story no longer fresh? find out in cramer's exclusive. plus, auction block. online retailer ebay is trading near its all-time highs. but should you still buy it now? or will this merchandise fail to catch a bid? don't miss cramer's breakdown when he goes "off the charts." all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question, tweet cramer, #madtweets. send an e-mail to cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪ bonjour

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the busiest month for ipos in the united states since 2007. and we still have eight more trading days to go before the month ends. the best thing about these details, not that they're doing so many of them. it's that wall street is practically giving money away with these ipos in order to entice people. the renaissance ipo index up 18% for the year. you might think people would need any enticing to come whack to stocks, given that the average seem to make a record high almost every day. but the investment banks who manage these deals recognize that stocks as an asset class are indeed tarnished. and because they want commissions, they try to generate interest in stocks by underpricing these ipos. technically giving the people who get in on these deals what i call free money. take tabloo software. this deal was priced at 31 bucks, what you paid if you put in for the stock with your ipo with a broker and got it. but when started trading, opened at $47, giving anyone an instant

51% gain. and that wasn't the end, as tablo ran up to $53 and change. salesforce.com got more of it. this one is a comer. and while tablo's initial spike was bigger than most, because the manager is goldman sachs and morgan stanley made this one tight as a drum, tint distribute a lot of stocks, none to hedge fund that i know of, this kind of massive move for new and public stocks has become standard in environment. that's why tonight i'm going to highlight two upcoming ipos i need you to keep on your radar screen, especially since their slated for tomorrow night, thursday morning. which means if you like what i have to say about these companies and you like what you see when you do your homework, there is still some time left to pick up the phone, call a broker tomorrow morning and ask to get in on 100 shares of these details. yeah, i'm talking about channel advise e which is a cloud-based enterprise software play. talk about cloud, wow. and then ply gem, housing play,

makes exteriors for residential construction. what does it have to do with home building? simple. two areas where we've had smoking hot ipos lately. the average enterprise software including last friday's software deal, as well as marketo, rally software and model n, among other deals, is up more than 43% for the year. holy cow. almost all these gains coming from the ipo's first day pop. the housing-related ipos like william lyon homes haven't been quite as hot. they have only spiked an average of 9.9%, but tend to keep percolating upward. these stocks have -- look, they've got follow-through. on average, the housing plays up 18%. so we've got both software doing well and housing doing well. so why don't we take a closer look at these two deals coming up later this week. first this channel adviser trade under the symbol e-com, the company is a service play,

salesforce.com. that's a buzz word. and their software enables client's to sell merchandise across multiple online channels. more buzz words. including amazon and ebay as well as search engines where people comparison shop like google, microsoft's bing. and working with facebook once they develop their own e-commerce offering. gives customers a single integrated user interface. let's them manage their product listings inventory, pricing, search terms and data analytics across all different online sales. is this hot or what. in short, channel adviser gives you a one-stop-shop technology platform, allows you to manage sales across all the websites that matter. it's 360 come true. company sells their software to 27% of the 500 largest internet retailers in the u.s. and have nearly 2,000 total customers. e-commerce is a rapidly growing area but the market for this kind of software is highly fragmented which gives channel adviser a lot of room to expand. company makes its money from the fees it charges customers who subscribe as a service platform.

but there is also a volume-based component. the more merchandise channel adviser's platform hopes to sell the more money they rake in. i like that model. channel adviser has been breaking even with ybut the coms investing heavily so they could operate at a loss for some time after coming public. but in this case the lack of earnings doesn't bother me. i like it when companies invest in growth. the important thing here is that channel adviser strategy is working. the company has, oh, boy, the holy grail. it's got accelerated revenue growth. arg! something that wall street loves and will indeed pay up for, because arg is rare and means the business is expanding at a faster price than it used to. we don't want dividends, we want arg. how about should it be worth? some people call it a sliver, 5.8 million shares. at the midpoint gives this company a market cap of 288 mill, way too small. channel adviser can grow at 22%

a clip, something they should be able to do easily. and at the midpoint this stock would trade at 4.4 times sales. when you look at other companies in the same space, demand, target response, sps commerce, they trade roughly 5.7 times sales. i know nosebleed, but listen up. if we assume that channel adviser deserves to trade merely in line with its peers, this stock could be worth 16.70, 20% higher than the high end of the price range but channel adviser is accelerating revenue growth so probably deserves to trade at a pre yum to its pareers. if you can't get shares, because i know it's goldman sachs. i'm sure they'll keep things tight, i would be willing to pay up to 16, maybe even 17 for this one in the after market. but it's a tiny stock so market orders -- no market orders. if it runs up too much, pass! how about this ply gem, makes exterio exteriors, everything from vinyl siding to trim, designer accents.

and the stock is trading under the symbol p-gem. we know the housing market is on fire. the expectations will build a million now new homes for 2013, much higher in 2014. 2015, 1.5 million. the leader in vinyl lieding, plans to sell at a price range of 18 to $20. i think you might be able to get stock on this far more easily on on channel adviser or tablo. trading at a premium, fortune brands, masco, mohawk industries, and home depot said all parts of the housing market are strong. even as it is levered more to housing starts and roan no vacation. because it is a play, it will grow at a faster pace than its peers, at least the next two or three years. and that means i can justify a premium price. however, again, if you can't get it on the ipo and can't get the stock for $22 less than the after market, all right, we missed it. we'll find another. here's the bottom line. ipos have been on fire this

year, especially the cloud-based software names and housing-related names. that's why i think it's worth it to try to get in on the upcoming channel adviser and ply gems. if you want in, you better do your homework fast. call your broker tomorrow morning. if you can't get ply gem for 22, take a pass. rick in illinois. rick! >> caller: hi, jim, how is it going? >> real good. how about you, partner? >> caller: pretty good. listen, i'm an avid watcher of the show, and at your suggestion, i went on the hunt for high yield and found some new castle. and i've owned it since last july. sold half of it when it traded at 11.5. now it's done a skin-off into health care and residential. and i want to know what you think, if i should hold both or just one of them. >> hold both. doing work on this. man, our viewers are so darn smart! it is starting to get to me! i am not -- you are ahead of me. i heard this situation, i said, i must feature in the show, you have my blessing to to both. i think it's a pretty interesting situation. we are in a head redd-hot,

sizzling market. i don't want you to get burned but i do want you to get some channel adviser and ply gem. homework, call the broke e limit orders. i think it works. after the break, try to make you more money. coming up, the whole package. organic grocer whole foods has had quite a month, rising close to 20% in may alone. can its commitment to quality carry the stock higher, or is the story no longer fresh? find out in cramer's exclusive. all stations come over to mission a for a final go.

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one of the reasons this market has been so on fire lately is because when companies make mistakes or disappoint wall street, they have shown a remarkable ability to change course. case in point, whole foods, 349 locations, 40 states, 3 countries. you know we're big believers in the organic theme on "mad money." people in this country, have become conscious of what they're heating, they want healthy, natural food that's good for you and good-taste's. that's what whole foods provides. $97 going into the quarter. and some on wall street were disappointed with the results which sent whole foods tumbling. fast forward to two weeks ago, may 7th, most recent quarter. this time they blew away the expectations, delivering a 3 cent earnings beat, on revenues

year other year. more important, whole foods showed same-store sales acceleration. the manager says they're going to get more aggressive about opening new stores, plus, geez, since the quarter things have gotten better. in response, whole foods jumped more than $9 from $92.80 to $102 and it's been roaring ever since, stock hitting a brand-new new high at 105 today. stock now up 15% since we last spoke in december. it's given us a whopping 64% return with reinvested dividends since we spoke in december of 2011. can whole foods keep it up. let's check in with walter rob, co ceo of whole foods, find out more about what his company is doing and where it is headed. mr. robb, welcome back to "mad money." >> how are you doing, jim? >> real good, walter. i've got to tell you, so many things went right with this quarter, i'm struck can with trying to figure out, i shouldn't just figure out the mechanics. you did things supply chain, little things that added up to major changes in gross margin. weren't these things whole foods was doing right all of the time?

>> i think we're just continuing on acontinuing to work on the leverage, the occupancy leverage and cost of goods through our shrink control and days on hand with inventory. a lot of basic retail fundamentals. and that together with the accelerating sales helped to produce a nice result. >> well, walter, something happened. three weeks ago i went over to brooklyn, went to the canal, went to look at the site. i think that your brooklyn store looks like it's got the greatest location. then i look at your map. nothing in brooklyn. nothing in queens. you say 1,000 stores. i say you could put 1,200 in. you don't have many -- you have ten states that don't even have whole foods. is 1,000 possibly conservative? >> i have to say, i feel right now as i sit here with you today, i think the opportunity is really truly open-ended. we've got 12 stores alone in the q4. that's one store every week in the back half of the year. and we've got almost three years worth of growth signed up in the pipeline right now. so i feel pretty good about the opportunity being pretty open-ended for whole foods right now. >> i went up to the brook line

store recently and i was struck -- johnnie's food master, you too. 21 stores in a very tight area in massachusetts and in the conference call you indicated there is no cannibalization. is there something that people want to go to whole foods as their supermarket and the other places just don't count as supermarkets anymore? >> well, i think you do see a big shift in the food marketplace. but i think for whole foods, the opportunity around the fresh, healthy foods and healthy lifestyle continues to grow. it's open-ended as people continue to make that a priority in their life and i think we're the leader in that space and will continue to take steps necessary to earn the trust and authentici authenticity. >> i'm seeing blueberries on sale, organic chicken. i see three wishes wine for 3 bucks, a $20 bottle of wine. is there a consciousness that says, you know what, we can be better but also much less expensive than the other guy? >> that's right. i mean, we talked a lot about

the value and differentiation. value and differentiation over the last year. value in three ways. one, continue to bring a range of choices in every category for our cher. number two, continue to dial up the promotions across the store and number three, continue to move our competitive pricing forward which we have continued to do. we have always been great in the center store, i think, but we have continued to improve on the perishabl perishables, where the quality difference is the greatest. so i think we just continue value and differentiation. we have the leading quality standards in the supermarket industry. and you combine that with more aggressive efforts around value and choices for our customers. that's a great formula. >> let's go back to value. i've got -- i know you can't see it, but i've got one of your 365 -- the big -- big bag of charcoal. i'm a kingsford guy. but i imagine that your charcoal is keeper for you to make and better than kingsford for a lot of people. what is the difference between your private label and some of the expensive labels that we're used to? >> well, again, the difference is the quality standards. every product we sell under our label meets the same exacting high-quality standards for every

product in whole foods market. and by the way, your timing on that charcoal is great, because memorial day coming up this weekend, right? >> you bet that's what made me think about it. and i grow grill every memorial d day. something occurs to me. i look at the callout of the south bebld store. i am thinking about the store next door to my daughter in tulane. and i am wondering whether you don't have a situation developing where you can put a value store next to every major college in this country where natural foods is the order of the day, and they don't want regular supermarkets. >> i think, again, we look at -- we opened our 350th store last friday in dan bury, connecticut. blew the doors off. might not have thought we could do a whole foods three or four years ago. that's why i say as i sit here right now, i just feel like the opportunity for our company is open-ended. and the -- you know, a great team, having a lot of fun, a lost success right now. look at the quality, results in the q up and down on the strength of the balance sheet. i think we're very well positioned to take advantage of

the opportunity that's there for us right now. >> now, a lot of people claim things were organic. i know you're at the forefront. gmo. how do you deal with what i call the faux organic issue out there? >> you know, you always take note of all developments in the marketplace. but again, you know, a lost these discussions about organic or natural, not really new. so continue to focus on building long-term value for shareholders and continue to take decisions, make decisions that reinforce people's confidence and trust in whole foods market. one example is the gmo thing you referenced. we made a decision about a month ago to declare for full transparency on gmo by 2018. that is an industry-leading decision. in support of our customers' right to know the information when they're shopping. and i think taking that sort of a tough decision lends -- sends a message to our customer, they can trust us. and we're going to continue to be leaders in this space. >> that is the good housekeeping which is why my kids love to go to your place. now, you did something i tell people, if you like where you go, and you research it, buy the

stock. and one of the things i've always liked about whole foods, this is a name that resonates, people go, love it, buy the stock. you it something i know it's -- art physician, but something i want to applaud. you it a two for one split. and the only reason i say this -- i say this to mark benny off, a lot of people get turned off by a $100 price tag, is that a good thing or are we doing something fictional to entice people? >> well, i heard you talk about breaking the pencil when you it your broadcast. it creates a lot of excitement, because it does bring the price point down for the retail investors and feels like they can access the company and the stock. and it's, you know, generating a lot of enthusiasm amongst our team members. they feel the momentum and the excitement. so in that standpoint, even though we know it doesn't necessarily change the fundamentals, it creates a lot of enthusiasm and excitement. >> all right. i think that the healthy food trend is still in its infancy. you're really in it for a long, long time. is this -- how far along are we? i go to walmart, and i see

organic there. i go to target. i mean, it's not like you're the only game in town anymore. how far along are we? >> we're just starting. in fact, i use the analogy the other day, we used to be in the minor league baseball park. i think we've moved into the major league baseball park. i think the game has just begun. and actually, most of the other opportunities are out there, i think most of the other retailers tend to be more skin-deep. whole foods has got the widest, deepest selection of these products in 32 years of history backing it up. so i think we're into -- i think we're in the first inning of a whole new chapter about fresh, healthy foods in the world. when you look at the basic situation with health care in this country, and the costs associated with that, and the opportunity for people to take charge of health in their lives, i think you come back around to the role for fresh, healthy foods and whole foods market is the leader and will continue to do so. >> walter robb, got to tell you, after the quarter people said is it over, up ten. and i said no, no, this is the reacceleration you've been looking for. get back in. walter robb, co ceo of whole foods market. thank you sir, for coming on the show.

>> thanks for having us, jim. appreciate it. happy holiday to you. >> same to you. all right, guys, the story, what can i say? you heard it. first inning. i mean, this is from someone who knows. and i've got to tell you, it is fun to shop. and it is fun to buy the stock. two for one split coming up. what's not to like? "mad money" is back. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives.

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what's your policy? wait a second. before we get to the lightning round, got a very special announcement to make. gather the kids around, listen up. our special show, "mad money," a family affair, is back by popular demand. just around the corner. so if you, like me, believe the familiar that invests together stays together, be sure you log on to madmoney.cnbc.com to get tickets for you and your family to be a part of our studio audience june 13th. we would love to have you here in person. and now it is time for the "lightning round"! on kraimer's "mad money." what is that about? rapid-fire calls, one after another. you say name of the stock, and my staff plays this sound, and then the "lightning round" is over. are you ready skedaddy?

it's time for the "lightning round" on cramer's "mad money." reed in tennessee. reed. >> caller: jim, boo-yah memphis grizzly style today. >> well, it could be a tough series, but boo-yah back. >> caller: yeah. i want to thank you for you what do you for the swhaul mall investor. i've got your book, "getting back to even" and gotten beyond even. >> that's what we want. >> caller: and you're doing a great job for small investors. and hope you continue to do it. >> thank you, reed. >> caller: i was calling about tractor supply. i bought it in january, had a nice gain. >> tsco, tractor supply, i think, goes higher. i have often kidded with my friend davis faber, tractor supply is the key to this market. but it is a great growth retailer. let's go to elizabeth in florida. elizabeth. >> caller: hey, cramer. listen, i'm calling today about an etf, eww. go mexico. anyway, today closed at 68.75.

so my question to you is this. do i hold my position, do i buy more, or do i say adios? >> it's been disappointing in part because the -- attacking a lot of companies in the eww. i think mexico is terrific but had to abandon it for actionalertsplus.com, my charitable trust, because he has taken on the whole index. i say stay away right now. joe in wisconsin. joe. >> caller: jim, hey, boo-yah from oshkosh. >> wow, man, i love the people in wisconsin. despite the negative publicity on @jimcramer twitter. what's up? >> caller: i'm wondering if i should get off the cheap stock tonight for toll brothers earnings tomorrow morning. >> 18, partner. i think toll is going to be fine. if it comes down, i want you to buy more. terrific. randy in sweet home, alabama. randy. >> caller: jim, hey! hey, how about aes? >> i like that electric utility. it's spent its time in the wilderness and now it's time to get some -- eas. and that, ladies and gentlemen, is the conclusion of the

"lightning round"! >> the "lightning round" is sponsored by td ameritrade. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.

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♪ every tuesday here on "mad money," we go off the charts. we look at the technicals, that's those fwrafs of the stock's action, ask the stock is headed. i'm always telling you i myself am not a charts, i'm a fundamentalist. meaning i believe the best way to figure out where a stock is headed, how it's doing, the homework, conference calls, et cetera. but the truth is, if you really want to make good use of the chart, you can't look at these things separately. you have to look at the fundamentals and technicals. that's tonight we go off the

charts with the help of bob lang, brilliant. he's the founder and senior strategist at explosive options.net. as well as being my colleague at the street.com to look at where stocks -- where the technicals are really coming together. and the fundamentals also fabulous. that's right, a convergence. i'm talking about ebay, the giant online auction site, as well as owner of paypal, let's you buy pretty much everything on the internet without having to repeatedly put in your credit card number and now also being rolled out in the real world, too. remember, lang has got a real good record with us. he upped boeing and price line, i can cannot believe it, before those stocks took off. so when lang says he likes what he sees in ebay, hey, pay attention, especially because this stock owned by my charitable trust, follow along on action alerts plus talertspln acting like a total bow wow. first of all, check out ebay's daily chart. lang says there is a lot of noise in this picture.

when you step back you can see a head and shoulders formation of one of the deadliest patterns. but you also can see a reverse head and shoulders. that's one of the most positive ones. hey, so the two cancel each other out. you can see some big gaps, as well as erratic movements, caused by the analysts and upgrades and down grades. when you focus on the big, important metrics in the chart, lang notes with ebay at 55, stock is trading above its 50 day on on 200 moving day average, measures its long-term trajectory, the red, okay, as well as its 50-day moving average. that's the blue. and, well, let's just say that measures the short-term trajectory, and this is at 54. this is pretty basic. but it's also critical, because there are a ton of chart-driven treasures out there and when they see a stock above these two key-moving averages, they believe the stock is going higher. a lot of it works like self

fulfilling prophecy. once ebay is on a roll it will continue to be a roll. one more piece of the puzzle in the daily chart. that's the moving average convergence divergence line, also known as the mac d at the bottom. this is a momentum indicator, which detects changes in the direction of the stock headed, often before they happen, predictive. about two weeks ago the mac d had a bullish crossover where the black line goes above the red line and for lang that's a powerful sign that you should be buying the underlying stock. sure enough, after that happened, ebay began marching higher until the last couple he takes, that is. plus the mac d indicator is trending higher, ultimately, which tells lang this upward movement in ebay can be far from over. if it can break out at 57, 2 bucks above where it is, lang thinks ebay should have a straight shot to $60. ooh, that would be worth getting, wouldn't it? however, from lang's perspective, the really bullish action isn't in this daily chart.

it's what's happening in the weekly charts. take a look at this one. much cleaner picture of the action, also easier to read. you can see that ebay is trending upwards with a clear pattern of higher highs, okay, and higher lows. that matters too. and that's technical anywhere vana. after rallying like crazy in 2012, ebay spent most of 2013 consolidating. but here building a base at these higher levels while it trades sideways. that's a very good thing, according to lang. you may think it's stalled but why, action is exactly what -- exactly what ebay went through in the second half of 2011. before it exploded higher. sideways action. okay? rallying more than 20 points or a whopping 68% over the course of that year. right now lang believes that ebay is building a base for the next leg of its move. that this move is like what happened here. and lang has one more reason to believe this stock could be getting ready for a repeat. it's the moving average convergence divergence line again. look at this.

this is very -- you've got to look closely. the beginning of 2012, the mac d made one of those bullish crossovers where the black line crossed over the red line, screaming buy signal for chart-watchers. black line over red line. that mac d signal worked like a charm. right? letting you take advantage of ebay's monster rally. and at the moment it looks to lang that the mac d is preparing to make the same bullish crossover that we saw nearly 18 months ago. this is a case where lang thinks he makes more sense to buy the stock now, rather than rating for that crossover to happen. because once the next leg of the rally starts, who knows how fast this stock will roar. yeah, he thinks coiled spring. before the next leg can begin, lang says it needs to break out of the $57 weekly chart and then can really start moving higher. but it could take time to get there even though 57 is less than two points above where it's trading. this is where patience will be rewarded. my opinion.

this is one case where the technicals and the fundamentals agree. remember, ebay owns paypal which i believe is making a powerful bid to become the future of online and mobile payments. many stores are rolling out terminals where you can pay on your smartphone. so you can move from the web into the real world. although in home depot's conference call, ceo frank blake said he's open to using all forms of smartphone payment, which is why ebay got hit so hard today, got to listen to the conference calls. right now more than half of profits come from paypal growing pastor than the rest of the business. rather than view as a conference play, ebay has reached a point where it's more like a payment process affiliated with an e. commerce site. 15% long-term growth rate. if ebay spun off paypal, i think it would be worth more than $50 a share to right now you're getting the rest of the company for free. here is the bottom line. technical analysis can be useful but the charts are at their most helpful when you don't look at them in a vacuum. according to bob lang's

interpretation of the charts, ebay could be ready to make a major move higher and that could make sense in light of the strength of the fundamentals, especially in light of ebay's fabulous paypal business. yes, the stock has been stuck for the moment. but in lang's opinion, this is a good stuck, not a bad stuck. more like cape canaveral than the la braya tar pits. and that will be breaking out of the graphtational pull. and i agree with him. stay with cramer. ♪

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for anyone waiting patiently for the european economy to turn around, let me point out the stocks, they aren't waiting for europe to get better. that's why i say 3m and emerson electric are roaring here, big european exposure, even after the conference calls where many la meanted europe. next, alcoa will go higher after real negative european chatter. i've been calling the bottom of europe ever since we saw irish bonds do better and spain got out of the headlines. i'll admit, all we have so far is anecdotal evidence of a turn going back and forth with my friend kelly evans this morning on my "squawk on the street" show. strength in germany, comment from urban outfitters that europe is stabilizing. emerson did use the term bottoming out which got this leg of the rally going. i'm sure we'll hear decent things about europe from salesforce.com. i think that europe is bottoming

call is one of the reasons why jpmorgan and goldman sachs have been running, they have been overly linked for years, whether the ceos like it or not. what's the one to buy now? becau because it's done nothing. general electric. i mean, this stock, my charitable trust owns, and well, and knows, it's been a huge disappointment. that's surprising, given that ge is integral to the aerospace sector, energy sector, particularly drilling. terrific housing exposure, which we know is churning. >> one look at whirlpool would indicate that and home depot. we know health care has been horrendous, a bad division. but how long can it stay horrendous? by the way, horrendous is fairly relative. it's not like the division is bleeding not on fire. we know ge dividend at $6.5 back from the parent company can. time and again, ge's weakness has gone back to europe and europe. this is one of the stocks where if a big institutional investor wanted exposure, he would pick up the phone and buy 2 million

shares of ge, what's known as on the line without so much as moving the stock. this is the heaviest and most liquid stock out there with the buyback that hasn't reduced the flow unlike so many other industrials. and add 10.6 million shares. plenty for any large institution to get instant exposure to europe. at times like this the mutual funds and hedge funds thrive on liquidity. they want to come in and buy something without moving the stock higher. the slug, general electric, fits the bill perfectly. the most important thing, don't wait for ceo jeff imle to say it's great. listen, that's just the way it works. you cannot wait for the company to tell you things are getting better. because at that point the easy money has been made. ge is way behind the market, as my charitable trust knows too well. but maybe that's where the advantage lies. no one is thinking, tarn darn it, i missed this one. in fact, many think it will never move. but if europe is bottoming out ass asser emerson electric says, could be the time to rally. even with disappointers like 3m,

emerson, ibm, ge is the only one left. won't be like that for long. stick with cramer. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] [ telephone ringing ] bny mellon combines investment management & investment room giving us unique insights room.

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i don't know about you, but i really like what whole foods had to say.

i think that stock is going to have another leg up. just like home depot. like to say there is always a bull market somewhere, i promise to try to find it right here on "mad money." i'm jim claimramer and i will s you tomorrow! good evening, and welcome to "the kudlow report." i'm larry kudlow. tonight, the eyes, hearts and prayers of the nation are still focused on oklahoma. we have a live report coming right up. also this evening, new and dramatic developments to report on the irs scandal. we have news on what has been a triumphant day for apple ceo tim cook and jpmorgan chief jamie dimon. yet another tuesday rally on wall street and senator marco rubio will join us to talk about immigration and the irs. first up, this evening -- first up this evening, the nation is still very much focused on oklahoma right now.