we are we are live at the nasdaq, stocks hit record highs. the guys getting ready to give you their best moves. first, here's what's on top ♪ ♪ ain't saying i'm a gold digger ♪ >> that could be set to rally. how that cash in, now, plus -- >> cheese and sausage? >> here it is. >> maybe the investors shouldn't go for seconds. why one fast-food giant could be about to cool off. and what do you get when you mix trading with romantic hits from the '70s? you're about to find out. "options action" starts now. ♪ do that to me one more time what will matter most to the market next week? you. the consumer, retail names, home

depot, jcpennejcpenney, set to . what's up on the sector? >> think about what we've had the last couple months. talk about lowered gas at the pump meant to the u.s. consumer. we know 70% of us gd is from. there is a part of consumer retail that doesn't have the effect from the strong dollar because all are from the u.s. dollar. two quick examples. a couple charts. kohl's a couple weeks ago in that category, a massive breakout, kept going and nordstrom's guided down. the stock reversed today and closed at a new all-time high. breaking out from -- macy's is next week. a name to look at. these guys may have a different

opinion. >> not just that the consumer is strong, has nothing to do with gas prices? >> well, to the extent gas prices have something to do with it, that's going to lag for sure. takes time for people to accumulate and realize they have more money in their pocket. nordstrom's doesn't pop into mind. probably it's the stretch to the limit that an extra $30 in a given week is going get them filling up their bags. a different matter. macy's, somewhere in the middle. interesting, trade at a low valuation. >> and stocks and record high, the wealth effect is here with the dow and record today. >> the xrt is steam. the issue, this particular subset. three stocks in the s&p 500 so-called department store index, and knithis has bln a laggard. macy's down from the january high. can catches up did what kohl's

did and catches up with the group. >> a lot of news in the last couple months. seen their ceo. reiterated 2014 guidance, said q 4 comps were good. comes down to guidance. nordstrom is telling you, stock could advance with a down grade and expected earnings growth of 11%, nordstrom's trades about 20 times less expected gross. to me, this sets up as a good trade next week. >> what is the trade? >> today the stock 63.25, looked to march, bought 65, 67.5 pay spread. bought one of the march 65 calms for 90 cents. sold a march 67.5 calls at 30 cents against it. the trade, break even up at 65.60 and selling that 67.5 call down about 1 point, 10% from there. sets up a a really good earnings trade and risk reward and only

risking 1.5%. >> other side of earnings. >> a decent play. options are cheaper than they usually are. the stock is also cheap. if it rallies it's possible to break through that high that we previously saw. so from my perspective, i don't mind buying that call. 90 cents. the amount of money you're saving by selling the other one, granted a third of the price but that's inexpensive. >> the stock underperformed, market underperformed its peer group, a catch-up trade and makes sense. >> precious metals got less precious. gold dipping below $1,200 today taking miners down with it. could it praent goesent a golde opportunity? carter? >> it is an opportunity. go to the charts and figures this out together. the pick here, of course, is looking at the -- look at the

chart. philadelphia gold and silver index, been around a long time. a 30-year chart. if were you to look at this period here when gold stocks were cheap, this is the height of the market's 2000 bubble when gold stock, expensive. at nader, when s&p is plunging and we're at the general bottom on a relative basis compared to equities generally. look at other charts. same long-term charlotte of the group. this is again about 35, 40 stocks and we are just now right at the relative strength low versus the s&p and we've started to bounce off that line. if you look at that on a very detailed chart. an important tell. a couple other things i think that are relevant. this is, again -- this important aggregate against the s&p. this is exactly where qe number three started. qe three and this dump in gold and the s&p takes often over the last two years, and so newmont.

one stock in the s&p that's a gold stock, this is. second best performing after another that got bought out and netflix. third performing. this is all the hallmarks of a bear s bullish to bears. relative to new mont and other miners that this spread that miners will go the way of the biggest miner, at least the only one in the s&p. so the bet being, this is the gdx, aggregate of many, many stocks held these lows, held these lows, a nice head fake which gets people beared up and thrown back above and we're on the line. we think we ricochet here and miners go the way of the biggest miner newmont, we're a buyer of gdx. >> say want to play along? what do you do? >> i've often said i wasn't a gold bug and didn't like the miners. newmont's earnings news was interesting because they talked a lot about cost, came in much lower than expected.

that's the area i expect them to say, guess what? sorry. turns out a little harder, more expensive. actually impressed by that. the other thing, s&p is trading more expensive than its historical average, miners not. goldcorp is, newmont isn't. look at the whole sector. look at sectors trading at a slight discount, if you're looking to play catch-up and fundamental news would be a reez didn reason it might. >> crude oil, stabilizing here is not giving a heck of a lot to bulls who think there's going to be a sharp snap back, banging around 50. i think it goes lower. what happens to gold in that scenario? can't think of it as a bullish scenario. >> if crude goes lower? one of the best things for gold miners. they take a lot of inputs from crude -- >> i understand that, but the next leg down. isn't that a function of global economic activity and what does that mean for miners?

>> a proxy on it. >> it is a -- >> also it's very simply an issue how much storage you have and how much oil you have in storage. that's not the same dynamic that gold will have frankly. >> what's the trade, mike? >> options and gdx, relatively expensive. looking out to june at the 21, 26 call spread. buy the june 21 calls spend about $1.85 for those. june 26th, sell for 45 cents. spend $1.40. a little a quarter over the distance, usually the level we're looking for and targeting the $26 price target carter's identified. >> what about the dollar, carter? >> that's a part, too. at this point the dollar surged, one of its biggest six-month moves on record, is the dollar headed higher long term? euro lower? sure. i think the path higher for the dollar passes through a lower price. it's overdone. yeah. >> doesn't the dollar just stay here and crude can stay here and not a great scenario for gold miners either. >> anything could happen.

when i first started in the business from writing research reports the one thing the director wouldn't let us put in. could. he said, anything could happen. so, sure. >> this is a trade until june? >> listen, what's nice about the trade, you said, a quarter of the distance to the width and you defined a range from etf had broken down six, seven months ago. seemed that would be the level it goes to. basically in my mind risking one to make one. look on the down side, it's somewhere in the high teens. >> if i read between the lines in your assessment of mike and carter's trade, dan you think they're nuts? >> well, no. i think -- i never know why gold goes up or down and would much rather be in the gdx. if it goes back to 110 probably breaks the big support. you tell me where gdx will be at that point? >> the biggest reason gold has gone up and down the dollar. if the dollar maintains its current situation especially with a little strong fundamental news from one of the miners at lower cost that actually gives

an opportunity to propel slightly to the up side. got a question, send a tweet at "options action." for everything pkz che"options check out the website. the hottest gossip. while there sign up for the newsletter. news is coming up next. one call does it all. >> and our traders call for a dominoes disappointment by may be wise to avoid fast food. plus, mike coe like you've never seen him before. that's when "options action" returns.

how about some fried noodles? shares plunging on an earnings miss on guidance and not the only ones. panera, chipotle dropping sharply since reporting earnings. seeing a trend? >> last night the ceo of red robin. made interesting points i took away. wasn't ready to say lower gas at the pump is something they're seeing yet. he's starting to see data. kind of squishy. so to me, you know i think -- that stock is right near a 52-week high. plenty of success stories. the ones listed there, when sales growth accelerates on high multiple stock us see those names. that's why domino's pizza hit myway radar. a massive, massive run. taco bell having problems with pizza hut. sales grew 1%.

margins down here. when i look at domino's reporting next week, the stock is kind of priced to perfection here. the chart getting a little toppy. that's your range here, but to me it wouldn't take a heck of a lot by the other three names to get it down. >> those names, while they all performed poorly after earnings, exactly what we they the prior quarter. missed the prior quarter and this quarter. buffalo wild wings, sonic, jack-in-the-box, more have gone up and that those three that gapped down. the issue, is domino's itself idiosyncratic, expensive? yeah. the angle is steep. the last quarter, october 14th, talking about a stock that surged op massive volume. often you get a second beat. be careful about shorting this. >> it's expensive, not overwhelmingly so given use had low double-digit top-line growth. we remember about domino's, a company with a lot of turmoil, lost its way, examined problems,

honest about it and changed the quality of their food. did a lot of things to turn that story around. some of the names mentioned. panera, can't say it. noodle and company hasn't done anything to major to pivot think strategy. doman open has, justifies a better -- >> coming up against difficult xparsens. they got the benefit of that over the last year and a half. this is a company that's a delivery pizza company trade trading on sales growth of 5%, 6%. price point. one other point, panera gapped down 6, 7% after earnings from new all-time highs. it can happen and you don't like to see those gaps. >> weakness foreshadows weakness. in the case of panera and noodles, sick. the burden of proof is on the bear. >> right. it they do execute, then you can't say it's necessarily priced for perfection right now? >> i mean i don't think they'll

demonstrate the growth justify a 30 multiple? at some point all this comes to an end. >> same with the earnings report prior -- >> much lower. stock's up 45% in seven months. what is it discounting? this san options show. i like to look to defined risk setups and merely look to a wide and play no more of a quarter of the spread. coming up, a man and his options. sentimental side of mike coe when "options action" returns.

michael coe. michael coe.

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underlying stock? do i think the value sags attractive? choosing an expiration, near dated options decay more rapidly. typically look 30 to 90 days, the sweet spot and looking for an annualized rate of return consistent with what i would expect for being long equities. kniss case, looking for 12% annualized rate of return or bet perp look at a trade here i think meets all of these criteria and specifically i'm taking a look at celgene. trading close to all-time highs. fundamentally one of the better stocks around. 20% annual year on year top line revenue growth. just getting approval for expanded use both in the u.s. and europe and that's their biggest revenue source. so you can look out to april and sell the 115 strike puts for $2.60. that'salities less than 60 days away. notice that you'll be collecting a little over 1% a month to do that. if you are forced to buy the

stock, if the stock declines down to that 115 strike price you will be obligated to buy the stock there but, of course, net of the $2.60 in premium you collect, effective purchase price is actually going to be $1.12 and 40 cents. about a 10% discount to the current share price. a situation where if the stock stays here we get paid. goes up, still collect that $2.60. declines, buy it to a significant discount to where it's currently trading. >> carter, ever hit the levels so mike can actually be an owner. >> thinking about that sound track. does this product come with that sound track, that's quite -- it's a good story technically and lagged bbb by a touch here. we think it has the prospects of hitting the levels that he's talking about. >> of course it does. trading there friday at 114. so here's the thing. about selling puts. one way to think about it as -- i think about it differently. if you own celgene, a core

holding, think of selling puts as a handsome strategy if you're prepared to buy more late perp along a stock like this literally from the lower left to the upper right the last year and you're going to keep on riding it, maybe you sell one month out puts at a level you would buy a little more, because if not full up on stock position a great way to add yield. >> if you own the stock already another way to play it, given where premiums are, sell covered calls against it, you could even, this is in the subsequent edition, sell both puts and calls against your long position and buy more at lower levels, called out of your stock at higher levels and meantime collect probably 4% maybe 5%. >> what kind of music would go with that one? ". >> "dance the night away." >> the deejay. coming up next, taking your tweets. stay tuned. ♪

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we love getting tweets. let's answer a few. from pete here asks, how about selling puts on oil through uso? >> so the etf that's supposed to track i think wti here, one where an interesting setup as far as options prices. it can only go to zero. not going to zero, calls more expensive than puts. at moment not ideal but better than the iso. i look to sell puts and use the proceeds to buy call spreads and look for a ban you would get much loet lower and have exposure to the upside. >> mike? >> options premiums are relative youly elevated. oil extremely volatile. i wouldn't reach out and just buy it, you can get long exposure, paid for taking it. if you end up having uso put to you it will be at significant lower levels than where

currently traded. >> and consensus, we're definitely going to 40. exactly -- 430. why it stopped and pushed back towards 52. if you can put enough time on the trade, leave it to you all, it makes a lot of sense. >> ww granny asks, please follow-up with carter regarding his numerous calls of retest of 820 on the s&p? >> that drop, think about that time frame, september 19th, october 15th, plunged 10%. a foreshadowing of what the next one will look like, which is worse by all accounts. the further this goes without that draw down the worst the inevitable draw down will be. visit 1820, go below it. 12% decline from here. that used happen all the time in normal markets. once is fed is done, once the student can't go to extra help anymore we'll see how bad a student he really is. >> sticking with the bear call. the final call, from the

"options action" picks, carter? >> at this point, we think be contrarian bgold miners, coal. do it. >> celgene. >> macy's defined risk into earnings. our time is expired. i'm melissa lee. "mad money" starts right now. >> announcer: the following is a paid advertisement for the revolutionary 21 day fix, brought to you by beachbody. >> thank you! [ laughs ] hello there. i'm tom bergeron, and this show is about transforming how you look and feel, starting right now. >> announcer: are you struggling right now to lose weight? >> i've struggled with my weight my entire life. >> i really want to... lose this. >> i didn't want to walk down the aisle weighing 220 pounds. i need to do something, and it needs to happen right now. >> announcer: now there's a breakthrough new way to lose those pounds and inches, and it happens in just 21ay