Cramer: Pin action: Bowling for dollars stock market style – CNBC.com

To support his thesis Cramer pointed to recent declines in Vitamin Shoppe after competitor GNC reported earnings.

“This is a textbook example,” Cramer said.

“Back on February 13th, GNC, the huge vitamin, supplement and diet product chain, reported a quarter that was widely viewed as being disappointing. It was just a subpar quarter. In response, GNC’s stock got slammed, falling more than 14%.”

However, it was the decline in GNC rival Vitamin Shoppe that presented opportunity.

In sympathy, “Vitamin Shoppe declined about 6% in the wake of GNC earnings,” Cramer noted, with the Street fearing that woes vexing one would also be problematic for the other.”

In fact, “after GNC reported, the analysts went out of their way to downgrade Vitamin Shoppe and slash estimates,” Cramer added.

“However, when Vitamin Shoppe actually reported earnings less than two weeks after GNC, the company delivered a slight beat,” Cramer explained. “Vitamin Shoppe stock shot up 8%, regaining every point it lost in response to the GNC miss and then some,” Cramer noted.

Therefore, had you bought Vitamin Shoppe on GNC’s decline, you’d have turned some fast profits.

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Read more from Mad Money with Jim Cramer
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Now if you’re a long-term individual investor, make no mistake, this is a lesson from Cramer’s days as a top hedge fund manager. “It’s a trade strategy,” he said. Nothing more.

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Cramer: Pin action: Bowling for dollars stock market style – CNBC.com

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