Kramer explains how to spot “subtle moments,” like a Friday session

CNBC Jim Kramer analyzed Friday’s market action, calling the session an “exquisite moment” as stocks opened weak but averaged higher to close. While he said that particular moment has come and gone, he listed ways investors can recognize it in the future, saying those conditions could yield big gains.

“We used to call days like today ‘exquisite moments.’ These are the moments when bears get ahead of themselves because they don’t know when to quit,” he said. “We had one this morning.”

After a tough week on Wall Street – Dow Jones industrial index dropped 1,100 points in one session and posted the longest losing streak in nearly 50 years – Index jumped back on Friday. The 30-share Dow gained 1.18% to close the week, while S&P 500 rose by 1.09% and Nasdaq Composite added 1.03%.

According to Cramer, these “exquisite moments” occur when the market is oversold. To determine market conditions, he said he uses the S&P MarketEdge oscillator, which shows when there is overbought or oversold. Cramer added that these “subtle moments” come when bearish investors show “overconfidence,” saying Friday that key stocks such as Palantir, an apple and Nvidia refusal to start the lesson without a clear reason.

Investors should also watch for positive economic data if the market is oversold, Cramer continued. He suggested that some of the upward action on Friday was due to the colder numbers from the price index for personal consumption expendituresa key indicator for the Federal Reserve. Finally, he said, it’s worth watching for news that counters the catalysts of the downturn. Investors balked after the Fed said it would cut rates less than expected next year. But on Friday, one Fed official said he was encouraged by the PCE report and said rates could still fall even if the central bank remains cautious.

“It was a really great moment this morning,” Kramer said. “They don’t come together very often. But when they do, you have no choice but to pounce.”

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Disclaimer The CNBC Investing Club Charitable Foundation owns shares of Nvidia and Apple.