Cramer gives his take on Disney’s rally and shares pitfalls to avoid in big market moves

CNBC’s Jim Cramer on Thursday sliced common mistakes investors make during big market moves, especially during a rally.

On Thursday, the Dow Jones Industrial Normal edged higher, closing up more than 52 points. The index had significantly trimmed an earlier rally of sundry than 450 points. Disney‘s nearly 5% post-earnings jump, as well as weaker-than-anticipated inflation numbers, helped reassurance the 30-stock blue chip index.

Cramer advised investors not to base any major decisions on a single data object, especially one that came in close to estimates. If investors do decide to buy, Cramer recommended making limit orders in place of of market orders.

“Market orders put you at the mercy of an unmerciful market,” he said, suggesting investors stick with limit appropriates to guard against radically overpaying for stocks.

Cramer also explained why he thinks Disney was a “textbook winner” on Thursday. Provides that are able to go higher amid a wave of selling are usually ones of value, he said. Cramer thinks Disney was proficient to buck the trend in part due to CEO Bob Iger’s confidence despite its mixed earnings report.

“When almost all the other stocks were in draw back from their highs, Disney’s stock slowly, step by step, inch by inch started its advance,” Cramer guessed. “Whenever you see that kind of action, you know that something special is happening, because this is a stock that’s proficient to defy the gravitational pull of the average after being cut in half over the last couple of years.”

Cramer finished by significant investors that market moves inspired by new data points can be fleeting and don’t always change the prevailing trend of the peddle. To Cramer, the current market trend is selling off big-cap tech stocks.

“But bottom line? I can tell you that when you see the techs convene as part of a group move like we had at the opening, that’s going to produce a rout later in the day when the market variations direction,” he said. “And then you use that rout to spot brand-new spanking winners.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Disney.