Cramer: How to Play the Volatility in UnitedHealth and Others

 | Jan 30, 2018 | 11:15 AM EST
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Stock quotes in this article:

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wday

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hrs

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hca

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aet

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hum

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antm

We've just had a nice bounce and my preference would be to do some trimming not some buying, unless you are willing to accept that your first buy may not be your last buy.

Why do I say this? Okay take the stock of UnitedHealth (UNH) one of my absolute favorites.

I have been watching this stock for days and days waiting for it to come in to be positive about it.

Sure enough it was down 16 at one point this morning. If you come in right here right now you are:
1. Taking out that prescient buyer and
2. Leaving open the possibility that we revisit the down 16 level.

But let's say you simply can't resist. You have to buy UNH for whatever reason: my counse isl please, not all at once. You can get the best of both worlds if you do it this way. If you buy a third of your position and it flies up you have a real high quality problem: a nice trade. If you buy a third and it goes down? You have plenty of room to buy more.

It's the right way to do it.

Patience is your friend on a day like today.

My favorite thing to do right now is to look at what is up and if we get a swoon down again find one that you like and buy that one.

You have natural buyers underneath and that's perfect; think Workday (WDAY) which is people say is a natural acquisition on the heels of the buy that SAP made of a similar company, Callidus; think Harris Corp. (HRS) off of still one more great defense stock; think HCA Healthcare  (HCA) which seems bulletproof, but no stock is bulletproof.

I prefer not buying into the blast zone which is CVS (CVS) , Express Scripts (ESRX) , Aetna (AET) , Humana (HUM) , Anthem (ANTM) and United Health. They are all compelling but they are all way too laden with sellers on any lift.

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