it was a busy week for the markets. the guys back there will make sense of it all while they're getting ready. >> out of gas. >> that's what the charts are saying about one hot sector. we'll tell what you it is and how you can cash in. plus -- >> do you know what's cool? >> buying facebook for just $3. we'll show you how to do it using options. and a groom of stocks can be in danger of selling out.

and here's a hit. we'll tell you how to profit. the action begins right now. >> let's get right to it. the nasdaq just closed at a record high. it is the fang sfoks have been a real standout. all near record highs. with facebook and amazon reporting next week, could fang give you the most bang for your buck? >> well, i think unfortunately, a name like facebook is 15% gains in the last few weeks is probably going to get in front of whatever good news they have. that's just one view i have. i think you can put amazon in the same group. they're back forward those all time highs. and i think there's something really important to go on. there was a bit of a rotation. in the last few months of the year. the fact that they have come back means they're less thick that they've rotated into. so i'm not expecting this. especially after you look at

google's reaction to the results. the results weren't fantastic. it wasn't as bad as someone expected. i think you'll get a lot of meh as you would expect. >> they actually didn't respond that well to google's earnings. then look at netflix. it is a different beautiful wax. >> it's binary. you either fail there or exceed that. and often it is a news event. it causes netflix to break out or exactly what maybe you're implying. they've gotten back to that high. >> the other thing that's important. people are continuing to welcome for growth. if you're uneasy about the next

two months. top line growth is one thing that everybody can bank on. irrespective of evaluation. >> you think facebook could make a new high? >> that's one of the big ones. let's focus on that. in the context of the general conversation. we know that some had a little trouble recently. that would be google on its news. netflix, quite good. so it is binary. we can all agree i think that it is up turn. to sort of test that theory, that's exactly what it is. i didn't make the lines fit. they fit. top of the channel. top of the channel. we're at the top third. and i'm thinking here that this channel, not only is it getting back, but close the or the high of the channel. so we're going to look at this

part. in detail. here we go. so what do we know? well, it looks like triple bottom of sorts. so throws those lines. here's the prior high. exactly 133.50. yesterday's close. 133. now make your bets. either going to earnings break out netflix or earnings disappoint. could you say it is 50/50? you could. we'll bet facebook will exceed the high on its news. >> all right. what's your trade? >> i think this sets up very well for two reasons. one, we have an identifiable. this is a stock that has moved well over 7% on average going into earnings and options are quite inexpensive. a move of only 5.4%. you can spend $2.85, just a small percentage of the current

stock price to guy market at 135, 45 call spread. the maximum risk is $2.85. spending premium is something that is a fool's errand. in this case because options prices are low and we have two reasons why the stock might break sharply. >> i like the trade if you agree the potential breakout. if do you, that's the level. you're targeting 135, you're paying a few bucks this premium to do that. you have a couple months. i'm going back to the technicals. take his word for it over mine. i see double tops in amazon and facebook. if they do what they both did in october and they talk about higher expenses in 2017. that is kind of my view. facebook in particular. i think they have a fake news problem. i think they have 1.8 billion users that i don't think they're going on see any reacceleration in growth. i think they had some measurement problems, how they

sold ads last year. >> this in the last eight quarters in a row and it has gone up the last 7. the most recent one, it didn't go up. it went down. >> if you believe that it backs away here, that's the other thing. >> i think the last one is a reflection that people understand these problems. we're still talking about 50% top line growth. which is hard to find anywhere. and certainly in a company this size that also happens to be diverse identifying revenue streams. so previously, a couple years ago, are they going to make mobile work? have they ever made mobile work? and now they're looking at other things. people might take an amazon approach. >> i need to say something. the. >> that was 16. it is supposed to decelerate massively if 2017 to 34%. >> that's a good point. a little alternative facts there. >> you look at the forward

numbers. it is reflecting it. it is the lowest multiple it's been. >> let's move on to a group of hot stocks. now up more than 4% on the year. breaking down move is a man who is always on high. we'll see if he sees dom. >> i really appreciate that. first of all, thank you. always moving, always going. when i look at the dow, i think about chaneling that inner chris berman, the night ranger. the index of 20 stocks was lower today but we did hit a record high. and today's down day was only the second one in the last eight. one of the biggest drags came by the airline stocks overall. that's after american airlines reported earnings that were in line with expectations but there were concerns about rising labor costs that helped drive stocks lower. the i-shares transportation etf, iyt, tracks this dow trans ports

index and shares over the last few days have traded more actively than average. like other parts of the market, it is now trading at a level well above the 200-day nch after price. so the bears may be looking for a pause or a pullback here. the bulls will take comfort that the dow industrials are making simultaneous record highs in concert with each other. the trans ports continue to be a focus of traders as they battle around these record high levels. >> all right. thank you. have a great weekend. and dan, you think the trans ports may be a little choppy here. >> i do. i think it is an untradeable vehicle as far as options are concerned. i want to look at the points in december, fedex reported, we had a lot of news about the holiday season. investors got a little rattled there about the costs in 2017

for logistics and all that stuff. that's the chart of ups right there. before fedex's disappointing results. what's going on here is a combination of valuation. this stock trades 20 times, expected 2017 earnings are supposed to grow. fedex traded 16 times and it has 11% expected growth. do you the comparative valuation and it doesn't make a lot of sense considering they're likely to face the same problems. when you think about the rhetoric of the trade war heating up. i don't think it will be dialed up a whole heck of a lot. what that says to me is that the ability to guide, the visibility they have with this year, will probably be less than some sectors. they rehigh on a lot of international trade. ups sets up, into the earnings, it is only about 2%. it doesn't move a whole heck of a hot. it has only moved about 1%. to me option prices are relatively cheap.

i want to give it a little time. i would look at february expiration. trading 117.75. you can buy the 118, paying $2, paying $2.25. selling one of the them at a quarter. you break even at 116. the max between 116 and 110. here's the deal i'm not expecting the to go to go to 110 in the next few week but that stock. the breakout level was 110. i think that would be a reasonable pull back level. this gives may good risk reward and some room to the down side. the options, you have an identifiable catalyst. if it sits right here you are won't lose all your premiums any

way. we know about the trans ports endured a very severe market. they've had an incredible recovery. we've heard from everyone. the airlines have been great. they've come out well. the trans ports themselves are back to that level. >> i'm with him. >> that's what i'm expecting here. >> got a question out here. check out our website. options actionate cnbc.com. tonight it has the winning powerball numbers.

oil was on fire last year. but there is something in the charts that suggests the run might be done. we'll tell what you that is. plus -- ♪ >> apple shares doing something unusual ahead of earnings. and it could signal more gains ahead. we'll tell what you that is. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

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what?pony neighing] hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. energy stocks sinking today. jackie has more on this. >> good evening to you. energy stocks and earnings certainly in full swing here.

we've heard from slumber. lower oil prices last year continue to be a challenge in the fourth quarter. but still, companies seem to be slowly increasing cap budgets as prices have risen and stayed over $50 a barrel. this is showing a little optimism for the future. the equity market reaction, a little cautious here. chevron's miss doing some damage to the group. s&p 500 sector profits are now on track to save 20% from year ago levels. as of the first of the year, it was only a 5%. we have valero tuesday morning ask then conco on thursday. it could move in either treks. crude oil prices logging roughly 1% decline today. we seem to be stuck in a range. frustrating for some. the market is split on which way we go from here.

back to you. >> energy was one of the top performers last year but has lagged so far in 2017. the chart master says more pain could be ahead. what do you see? >> just as jackie said, the future predictions are also stuck. we do know that it has the chance to be the best sector in the year. let's look at crude first. just, i have a little tom sawyer going. on i sent in the wrong stat. current crude, 53.17. now it's important. look at the futures contract. christmas crude is 55. and christmas '18 is 55. the market itself has expectations of no progress. a great stand-off. and i don't think energy stocks are going anywhere.

exxon, the the relative performance to the standard & pours of which it is a part. the energy stocks have continued higher almost for the past 12 months. and even as they're making new highs, the relative performance peaked in april. so that despite being the best segment on the year. all of those results were generated january, february, april. you didn't outperform the market having picked energy as a bet. some people would say it is a head and shoulders bottom. you might call that a neck line. what we do know is this. those are very precise lines. what we're thinking here is that at a minimum it will check back to the apex back here.

we're going to bet this is going nowhere. if you're long, don't expect much. >> you have a trade. >> that's right. one of the things you want to do when you are faced with a stock that's really not moving anywhere. sell some premium. you could sell calls or you could sell both. when you do, that's called a strangle and that's what we're looking at here. specifically the march 70. collecting 55 cents for those. net 85 cents. you annualize those returns, that works to an extra 8.5% per year. now this is due to go x-dividend in march. that might be one of the reasons, if you don't it. you can collect a little additional premium by doing this. a quick point. if it does rally through that upper strike, you're going to have your stock fall away from you. if it rallies through the put strike, you could be forced to

buy more of it. so those are two risks. if do you believe it will remain range boumd. you can look to strategies like this. >> do you like the structure in. >> do i. we were talking about it before the show. we wanted to talk about xle. i don't think it is a good strategy to do etf like this where option prices are so low. to look at one of the underlyings where option prices have moved up. there is i haddio since democratic risk. you will get paid to call against the stock that you own and maybe enhance the yield. we know exxon is a 3.5%. if you were to sell a one month out, 3% out of the money, you can maybe take in a half percent. >> 50% is made up of the top five or six stocks and two have already reported. whether you'll get a big surprise out of one of the constituents. one other quick points.

this is not moving. the volatility of xle is as low as it's been in about two years. that's the reason why people are not putting more of a bid. >> still ahead, netflix shares are up 7%. that came as no surprise to our chart master. who predicted the move to new highs. how did he know? he will explain. options action returns. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. dan offered a trade on apple. >> i think you want to replace stock. you walk in january 3. you have the 10% gain on the year. 30% gains from early in the year. if you're worried that the guidance, look at the february

expiration. >> i don't know if you caught that but he was wearing one of those -- >> i can't hear you. >> the theme of the show here. it doesn't seem that aggressive one way or the other. it has rallied a lot here. the gap to be filled. back to that prior high from 2015. if they say anything decent, it is going right back up there. i like the idea of having to find risk. >> not $4. it seems like a big move. >> to netflix, two weeks ago, they thought it soared to new highs. >> here's the set-up. here's the gap. nice. a gap again. we're going on bet long. we like netflix here for a new

all time high. >> i think the best way to play it. look at the march 135, 155 call spread. that will cost you $5.75 right here. >> they were right. so carter, what do you see in the charts? does the chart have any similarity to facebook? >> i think it might have said the same thing before. it's binary. you are gambling when you go in front of earnings. it could have gone in either direction. a little luck or a little insight. i think you stay with it. it is particularly robust right now. >> the nice thing about options, you can stick with the bullish these he is but take some of the money off the table of you can roll the 135s, the 140s, you're just playing with house money or roll to the 145 calls in which case you take your money out. some profits and still some of potential upside. that's the way it is you play. >> up next. your tweets and the final call.

[pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

let's take a tweet from cam who asks, how are you playing gold in this market? >> i like gold. gold is the best they know you could have done last year. the presumption is gold will get back on the horse. >> we have a trade-in gold. if you're using gld, it is relatively low. i think it sets up very well. >> gold is not -- >> i think it is in a massive down trend. i think you will retouch those lows. >> that's what makes the market. >> he has a diversity of opinion. for the final call. carter? >> facebook earnings. >> nathan. >> facebook, to be a little nuances. >> it has to be big. >> there you go.

>> it looks like our time has expired. thank you for watching. for more options action, check out the website. and of course our daily segment inside fast. don't go anywhere. "mad money" with jim cramer starts now. "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain but to educate and teach. so call me at 1-800-743-cnbc or tweet me @jimcramer. it's been a tumultuous week with the new president making waves every day. trump's doing everything he said he would, and it's roiling the markets with the latest issue