live live from the nasdaq market. it's been a record week as the marks come it a close. carter, are you excited? our guys are getting set up behind me. here's what's coming up. forget the apple watch. forget the iphone. we have the real reason why apple is about to break out. it's a thing of beauty. >> unless you like hot spots. >> i am so hungry, i could eat a sandwich from a gas station. >> that explains why dining stops have been on fire, except for one, which is about to break out. we'll give you the trade. >> talk about shocking. well, maybe want that shocking, but we'll tell you about the sector that could surprise investors with next week's earnings. the action begins right now.

♪ i'm every woman ♪ it's all in me this part you know. amazon, google, microsoft all rising sharply on earnings and pushing the nasdaq to a record closing high. here's what you may not know, which tech stock will be the next to soar on earnings. let's get into the money and find out with dan. this is a surprising prediction for you. >> it's been a stock i've watched for a long time. it hasn't been because of their forward growth in monthly active users or anything. they have been growing revenues pretty well. they did have some hiccups out of the gate. i think investors were having a hard time figuring out how they're ever going to get to the critical mass that facebook did in a very short order, so to me i think you have a setup that's kind of interesting in next week's earnings, and you mention amazon. forget the other two because they're just so beg. google and microsoft. netflix last week went up 18% after its report. amazon was up 15% today. there's something very interesting about those two companies. they both are tremendously high

valuation. they also are very controversial stocks in the investment community, and so when you think about them, they both moved back towards the 52-week highs. they did better than expected, and they just exploded. there was no overhead resistance, and they kept on going as long as the market was open for all intents and purposes. i think twitter has the potential to have a similar move next week. >> this is a situation where, of course, if are you just taking a look at where the stock is trading on a multiple earnings basis, it might seem like nose bleed territory. consider the fact the valuation of twitter is below what we often are hearing from names like uber. it's taken no revenues, and in three years it's going to do probably $2.4 billion, maybe $3.6 billion next year. more importantly, many of us use this thing, and for a lot of us figuring that eventually they'll figure out how to monotize that. i think there is serious potential. >> there is also the setup, meaning both amazon and netflix had a gap and they each gapped

up again. well, twitter has a gap back in february. back last quarter. so the presum honest is we'll get that again here. >> if the back drop is a nasdaq that bodes well for twitter or -- >> it has -- they are growing sales. 65% if they can really get those users at the engagement ticking here, then it's going to be -- i mean, it's going to be a $40 billion market cap very, very quickly. that's a big if. they're not growing that fast. facebook showed us this week their monthly active users 16% or something like that on a $1.3 billion and twitter is having a hard time getting to high single digits on a $250 million basis. sflo dan has got a twitter trade. before we get to that, because it was a record day for stocks, what did you -- how does the nasdaq chart look? >> it's better than the s&p chart. the s&p is still kind of stuck at those highs from exactly two months ago.

speaking of the s&p, if you look at the market cap on twitter at $33 billion, there are only lestocks in our planet that are that big that aren't in the s&p 500. dish being one. that's going to happen at some point too. >> so you know what's interesting? i have been long the stock. the options market has been pricing 11% move in either direction. the five quarters that the public has moved 16%. those are massive, massive potential moved here. i've been long since the high 30s, and what i may look to do, this is early next week and reports tuesday after the close, it looks to make a defined risk play in the event because of the potential movement. here was the trade that i am considering that maybe money or tuesday prior to the results, sell out of my stock and buy this call spread. i'm literally going to look today and look at the 52-60 call spread. with the stock $51, you could have made that. the maximum potential gabe is up $6 from $54 and $60. s $60 is interesting. that welcome back a 15% move.

that would be a move that is averaged, and it's also the average move between amazon and netflix. when you think about the magnitude of a potential move. you risk getting $2 to the down side. 3%, 4% over the next few weeks. i want to make one point. on the down side 45 looks like a level. it goes through 45. it's probably going to go much lower over the near term. it has a reason to do so. i like the idea of risk aing few percent to maybe make 10%. we have this event. we can target it. >> let's be leer. this is sort of like a stock for play strategy because they own the stock for a long time. >> i want the potential for the exposure to the up side. let me tell you, the move was very expensive. you do not want to go and make out of the money long people wrum bets into events like this frequently. >> we have seen a few names really make moves. net flex was certainly one of them. amazon i think is another name. we're taking a look at sometimes it's worth paying up for premium, and think how much

you're spending here. you're looking at spending $2 on something that costs $50. you are risking 4% of the current stock price. the we you need to ask yourself, could the stock move that much or more. the answer is very clearly, yeah, it could very easily, and that's all you're risking. the move is against you, then that's the reason to do a trade like this. >> there's a good bet. these are dynamic names, and there's every chance -- >> let's move on here because it wasn't just tech stocks before this week. casual dining stocks have also been on fire. names like domino's, duncan, and cheesecake factory up sharply on earnings. that could spell good news for one restaurant stock reporting next week. carter has been teaing a look at one. >> i have some charts. we'll take a look here at the screen. we want to look at buffalo wild wings. this is an interesting setup. first, let's look at the group s&p 500 restaurant stocks as an industry or subsector versus the s&p. we know a winner relative to the market. sort of on the short-term basis.

let me just show you really what's gone on. since the 2009 low, obviously this is a lot of consumer discretion relative to the market, but restaurants in particular really dominated equities in general. here is the setup. a chart with no lines, chart with lines. take it away. what i want to focus on is the gap. this gap of a month or so ago is an earnings beat. this gap is an earnings beat. we've sold off back to the point in which this thing repriced and the presumption is we're going to bounce here, and we're going to make a new high. closed at 180, and the presumption is 200. >> he likes it. do you? >> this has been a great growth story. i will say that when you take a look at the valuation trading about 30 times next 12 month earnings, it looks like it's barely fully priced. we've seen a lot of fully priced growth stories, and actually rallying even on disappointment because people are still hunting

for growth. here's a question you want to ask yourself, where do i buy growth? you want to buy buffalo wild wings or shake shack, for example, which has less than $200 million in revenue? >> that's where jan is, by the way. >> this is one of those situations where we're looking for opportunities to make bull esh bets where obviously the market has indicated they have a taste for it. this is a situation where i think using options makes a bullish bet, makes a lot of sense. all we're looking at is the june 180. you can spend $6.15 with that, which represents just over 3% of the stock price. it gives you until june expiration to make that bet, and if the market decides they don't like earnings, they're not risking a great deal. >> i would be worried about aif wran flu? are you worried about avian flu being a wrinkle? minnesota declared a state of emergency. chicken costs have been a huge impact for a name like buffalo

wild wings. >> i'm not terribly concerned about that. you know, one of the things with young having the same kind of concerns. that was a different situation. percentage and sales basis. it's not a scare that i think is affecting a lot of casual diners. it might raise costs just a little bit, but they're going to overcome that because they're going to talk it down. all they have to say is this is a one-time extraordinary event. >> so he said shake shack. that's exactly the name -- >> i know. i actually bought shake shack a couple of months ago when it was in the low 40s, and now all of a sudden it's in the mid 60s. we're in a pashgt where people are looking for that sort of thing. now the stock is up 50%. we look at a buffalo wild wings, you made a great point, they have ten times the amount of sales as a shake shack. they're growing sales and earnings at 30 times. that seems reasonable.

shake shack, that's a good old-fashioned short -- >> are you taking profits on it? are you buying -- >> it's up 9% on no news. you keep raising your stock. that's how carter does, and you try to live by it. the setup in a buffalo, i think the way he's stocks have strayed traded, if you think about young this week, and cheesecake and all these restaurant stocks. it's going to make -- >> if you wanted to start selling shake shack, you have to see supply of stock in the market. nobody wants to sell had thing because there is no other -- >> options and actions, they don't have options listed. this went in january too. that's part of it too, right? there's a supply-demand. >> it's got very high -- >> had he will be price where i when they are listed. send a tweet to us at options action if it's civil. we'll answer here on the show. if everything options action, there's only one place to go.

options action.cnbc.com. you want to check it out. here's what's coming up next. >> it's the most beautiful thing i've ever seen. >> that's what people are saying about the apple watch, but there's something even prettier and we'll tell you why it could mean money in your pocket. plus, oil stocks are on fire. and they could get even hotter next week. we'll tell you why when "options action" returns. here at td ameritrade, they work hard. wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

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welcome back to welcome back to "options objection." i'm josh lipton. apple fans were out in force today trying on the new watch. in fact, none other than patriots qb tom brady was at the apple store in nyc test driving them. if he buys it, he will have 3,000 apps to choose from, and it's those apps that will play a big role in determining whether this watch is a hit or not. which app will prove the most popular with consumers with a new device? of course, that is impossible to predict. app that is are already address immediate consumer immediate like uber or yelp. that's what hotel tonight is banking on. this app allows you to book a hotel room in the very last minute flying into san francisco. you'll have a reservation. month worries. ceo sam shank tells us the hope is to make the booking process

even faster. >> it definitely is responding to what our users want, which is new ways to book a hoegts tonight, base a reduced friction and we talk about getting out of the app and on with your night, and in this case you don't even have to pull your phone out in terms of getting a booking for a hotel room. it's going to bring people that are just looking for ultimate convenience. >> of course, when apple does report earnings on monday after the bell, the focus won't being on the watch, but on the engine that still drives this tech giant. iphones, the street thinks apple shifts 65 million i phones in q2. analysts want to see eps of 215 on sales of 55.9 billion dollars. that would represent growth of some 23% on the top line. guys, back to you. >> thank you, josh lipton. apple shares are sitting near all-time highs ahead of monday's report after the bell. carter, you say the charts look better than the watch.

why? >> okay. so here's the chart. it's -- what not to like? north by northeast. draw the trepd line. take it away. all pretty good stuff, and it seems to bounce oft trend line. that's the point of trepd lines. no trend line, trend line all good. i want to talk about these three bounces. take the trend line away. check this out. 27% move for 33 days right there. 26% move in 28 days right there. 27% move in 25 days. that's awfully symmetrical. well, put the line back in. these kickoff from earnings. these kickoff from earnings. these kickoff from earnings. this time we haven't come down to the line in many ways. that's even more constructive because there wasn't any weakness. the presumption is we'll kick off with earnings and head to new highs. big stock. bigger than utilities. we like it a lot. >> it's pretty darn convincing. >> you know, what's really

interesting is how fully valued apple shares are here when you consider that the stock is trading at less than 16 times next 12-month earnings. if you strip the cash out, it's really 12 times. it is adding a lot of cash to its balance sheet each and every quarter. it is not as if this company is expensive relative to the market, and even though the growth is looking to be a little bit more modest year on year, we're still looking at 9% growth. from my perspective, it's really hard to figure out why you would be looking to sell shares at this point. >> the world fwraes it's going to $1 trillion in market cap. >> the consensus? you don't like that. >> i think the sentiment as we've seen on many occasions in the last few years is -- let's tack about the earnings event on monday after the close. the options market -- you know, in twitter, the opings market is probably a $5 move. when you think about the complace ensy in this apple move, it's $7. the stock moved $6 this week

alone, and you have this earnings. to me i think opings look very cheap if are you looking to consider it's not the situation where i think you want to be selling to get your underlying stock position, but maybe ask lemplg for -- >> a 5% to 7% move. we're talking about $40 billion one way or the other. i mean, this is kind of pretty wide gap. >> $40 billion in either direction, they're expected to have $225 million in shares this year alone. >> market cap is -- it's a relation to the s&p. it's 4% of the s&p. we've had several times in this country, u.s. steel did it. more than 5% general motors did it. stocks can get up to a little bit more percent of the whole. why can't this aheave that record that other stocks have achieved? >> you don't need to sit there and figure out so we're going to buy an opings trade instead and look at the june 1, 3125 call spread. you can spend $4.30 for that, and obviously that's going to give you good exposure to the up side for that 5% to 7% move.

if it does happen to fall off, you are missing less than 4% of the current stock price. >> 4%, that's not cheap. that's the way to play it here. look at this chart. a move back to that up trend, like you just said, that would be healthy. you would be on fire rsh you would be backing up the chart. >> that would be even better. >> i think opings are cheap enough to make directional bets in this event, and i think that is the way to do it. i think it's a hard one to shoot against right now. >> let's say for some reason apple doesn't deliver on every single metric on monday, presumably it will go back to the trend, right? >> the trend line is that they hold more often than not. even as it's a disappointment, that would be your reference point. coming up next, energy stocks have been one of the hottest trades this month. will next week's earnings ruin this rally? we'll discuss that when "options action" returns.

we're back. ask you and shall receive. earlier this week one of the options actions broke to us on twitter. john said, mike, do you and carter still have faith that bp can get to $36?

why the quick rise? >> last month they got bearish and said the stock has rallied 14%. ouch. carter, what do you do now? >>. >> close it out. >> we also got earnings next week. >> we do have that and obviously most of the value of this put has been eroded. i think there is some consolation, and this is the reason we wul go and trade options. this was not a stock where you wanted to sit there and try to press it short with the thing trading at 52-week lows. we risked $1.80. it's at $7.50. you are down about $1.55. i think it's unlikely whatever happens in earnings that is probably going to go through that level and it's risking very little. my inclination would be to take the money off and we'll look for another bet. >> oil in the related stocks, it

looks like a tech -- i would be really surprised if we don't see the stocks lower because the thing that we've seen from supply and just to me it doesn't really -- the fundamentals don't match up with the move. there was just an oversold bounce here and could set up for a good opportunity. >> last week dan here thought we would see a pullback center a discretionary stock, and that trade has not worked out as well. etf is up 3%. loo this is an interesting one. we were just talking about it. there's really some diverse action here in these names. why do you want to short disney? >> we all said that. >> i was looking at some other things like, you know, look at t tjmaxx and kohl's. i have to cut the losses on this one early next week. disney is the largest holding of this today. what are the larnlest single stocks today? disney. the stock was $109.58 at the

all-time highs. look at the may 1st weekly, this is for erpgz, and they bought 10,000 of the 111 calls within $1.70. that stock is going to go up next week above $112.70. >> that's the only sensible way to try to press the bullish side of disney. even though i do like the stock. speaking of trading and highs like it is, the good news as far as i think when people try to forecast what they can do with the star wars movies and so on, that is out right now. it's hard to figure out what they're going to say on that earnings call and what is going to get everybody fired up than they already are. i would rather buy calls than stocks. >> do you think 111 is -- >> this is an impervious kind of thing. >> coming up next is our favorite part of the show. we are taking your tweets, so stay tuned. here at td ameritrade, they work hard.

wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. hey mom, you want to live by the lyeah.right? there's here. ♪ did you just share a listing with me? look at this one. it's got a great view of the lake. it's really nice mom. ♪ your dad would've loved this place. you're not just looking for a house. you're looking for a place for your life to happen. zillow

tsplit second stats. it's so close to the options floor. you'll bust your brain-box. all on thinkorswim. from td ameritrade

let's let's take a tweet. ar mark asks what do you guys this about whole foods, unusual option activity today on heavy volume? dan. >> there was buying of the may 50 next week expire aing calls, and they don't report until may 6, i believe, so they don't capture -- maybe they're trying to play the short-term turnaround, and it's 15% to recent highs. i think you probably have to play it along side. i will be buying next week. >> yeah. i would go one week further out. you can spend an extra $1, and that's a better way to play if you troo toying look at short-term trade. >> time for the final call. the last word on the options -- >> final call. go to buffalo wild wings with your ipad and think about your apple watch. >> i think carter has never been to buffalo wild wings, by the way. >> i would not buy an apple watch right now, but i would buy that apple call spread in june. i think it's a cheap way to play

it. >> you p, twitter will move one way or another here, and i think if you think it has potential to move like amazon or netflix, you look at the may 52-60 call spread. >> i'm melissa lee. see you back here next friday. see you monday on fast. have grate weekend. "mad money" up next. >> 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 21 days.