we're live at the nasdaq market side on a hot summer friday breaking the market. relax. there's one dow stock that's setting up for the perfect catch up trade wooechl give you the name plus, nike's set to report earnings do you know which way the stock is going to go there are some interesting options trades that might shed some light break it town. and talk about hot in the last two week, carter

predicteded the surgeat oracle and amgen and now, he's got an even bolder call to make the action begins right now. >> everything that is old suddenly new again two of the four horse men of the '90s are surging this year oracle and microsoft up double digit. it's well below its tech bubble levels nearly 10% lower meantime, intel is down on the year, but could any of these names actually play catch up to the rest let's get in the money right now. >> microsoft and oracle really outperforming. it's up this year. last week on that one, it got to new all time highs, but it's up 33% on the year. a name i want to talk a look at is cisco they're going to have an analyst meeting next week. that could be a catalyst followed by their q4 earnings

that are going the fall on august 16th. cisco had a really bad day missed the guidance of this current quarter, but when you think about that, you have a big gap. the company knows they have this analyst meeting in a few weeks here they don't generally like to leave you know, like something or nothing to talk about when you get there. so we have a couple of charts here i think there's going to be a little bit of good news. that that's the one year chart. we also have a ten-year chart especially as we're talking about om of these other tech leader es. look at that one it failed. then back to the 20 hf ye-year s we're talking about all time highs, if we can get above these levels, there's a lot of room to run. this is a stock that trades 13 times earnings they had 43% of their cash 2how% net of debt

3.6% dividend, cheap >> i think on the upside here, certainly, if you take a look back, we're talking about microsoft perscription form performance this year, but really the story of that being a stale stock stuck in the mud goes back quite a ways then what happen, same thing with oracle, turns out both of these companies have a place in the new economy, new technology. cisco hasn't provided any answers to that yet. but to its credit, it also and to your point, trades at a big discount to the market it's generating a lot of free cash flow. that's likely to rise and if you're going to make a bullish bet, wouldn't you rather do it on a company that's trading 13 times? >> from my seat, what dan's talk ing about. looked at the long-term chart. that is the biggest thing you can possibly do. run up and collapse and then you're going to get out and get one stock, and that is quite a concern. but the daily chart and dan

references, a defect in the sense there was a heavy volume drop and the vast quarter of results. when you drop in gap, you often get a second gap in the same direction as stock like oracle gaps come in two or threes typically. there's a lot of data on that and the most recent was a down gap, so, you've got a great long-term set up,but the day-to-day is maybe -- >> i just want to mention two points then get to the trade one of the things that got investors excite d about oracle was their move to the cloud and the transition it's a high market business, but really only 10%. i think cisco is going to talk the recuring revenue i think that could be a catalyst and fill in that gap i could do a target and august expiration which is also going to catch their earnings announcements. so today when the stock was trading 32.10, option premiums were low so you could look out, buy calls here the august calls were offered at 45 cents

about 1.5% of the stock price and breaks even at 33.45 up 4%. i think you get a gap over the next few weeks and b then the earnings announcement is the catalyst to make it break out from those long-term levels. >> i think this sets up nicely for a risk reward perspective because the premiums are so low. because you have identifiable catalysts. when you consider whether it moved 4% in either direction, if you're going to make a bullish bet, you're gouing the commit less capital, if there is weakness and you have a gap lower, 1.5% is all you're risk >> it sounds that you think any bullish bet is too early >> no one knows the future the most cent quarter was lousy and the stock has been a massive underperformer that's a burden. >> all right, dan. >> i'm just going to say listen. we're halfway in this bull market here where stocks can only go up we have a lot of multihundred billion dollar tech stocks that

are up 33% of the year i think value is kind of attractive p, especially if you can tell a story associated with some of the strength in the names. so many me, i think you have a combination of cheap valuation, cheap option prices, catalysts and this is where you want to make bets at this point. >> well, it's flash back friday. not just with old tech stock, but another as well. a handful of classic stock, boeing and mcdonald's up almost 30%, m 3m surge, johnson a& johnson up, but our chart master says one of these names has come too far too fast cart er is going to tell us whih is going to be a downer. >> well, i mean, more than a couple we look at 3m. i want to start with sort of an overlay of industrials as the theme and maybe try and go over to 3m. so, what do? a two panel chart. this is the s&p 500.

industrials. utx. ge, caterpillar and of course, honey mr hon honeywell and 3m we know that since december, it is up. but it's relative performance, which is everything to the market is down and that's a defect. let's go to a long er term char. this is industrials again. we know we have broken out to all time highs but the relative performance got right back to its prior high and has been stuck there three times. i think it's going to remain stuck. so industrials are late. g is a big part of this. but hold that as a concept and let's to what is either a chicken sickly kl or dow component. you've got this stock 3m, which has taken off. what we know b obviously year to date, big outperformer a few more time frames here is five years and it speaks

for itself youfr got performance on the part of 3m here is ten years. circles draw themselves. the numbers speak for themselves here is basically back to the early is the 90s right? so, again, what i'm thinking at this point is that 3m has gone too far. so let's look at 3m. five-year chart. i think you could draw the lines this way and what we know is that if you busted out, there's a lot of tension, but the angle is so steep now. often when you do that, you will fall back to the point from which you broke out. a slight pivot that would be about an 8% correction down to the 195 level. now, keep that 195 level in mind and here is just a one-year chart. so were we to just simply check back as we've done several times already, that would be exactly 195. that's what we're looking for if you're long 3m, i would take

profits, do something. p if you're a short seller >> mike, what's your trade >> from a fundamental perspective, this is interesting. it has grown consistently for a lengthy period one of those rock star stocks you could have had in portfolio. it is trading rich at this juncturjunk when you consider a strong rally here m i'm looking up past earnings, which are going to be report iing in july and i think the play you can make here is to buy the august 210, 200 puts spend 275 for the 210s that's a net debit of 245. less than 25% between the strikes. it is because ongs premiums will be sliktly elevated. even so, they are extremely cheap and i don't really see this costco falling sharply and as quickly as it did, although i don't know if that's a possibility. i was targeting the 200 level.

it is -- a little bit of a chicken signal it's gcharacteristics that aren' so volatile. i think it's time to take profits and turn them short. >> also this is not a place where a lot of fast money plays. if you look at the biggest holders, it's about the slowest big money you can have >> yeah, i think that breakout level back to 200. i like the trade i like risk 245, but i think what's important is that the top line the really pechted to grow 202-% this year. maybe double digit growth. seems kind of rich, especially when you have a straight up move of 17% since it broke out in february

i do believe there's going to be one of these thar going to whiff over the next few weeks and it may wake people up to the fact they're crowded into these stories because a decent dividend yield, so to me, i think this makes sense >> for everything omss action, while you're there, check out our super cool newsletter. coming up next ♪ >> that may be the case. but mike has some ideas that you can make money on nike when it reports earnings next week he'll break it down. >> plus, calling all options action fans, reach into your pocket grab b your phone and tweet us your question at options action. if it's nice, we'll answer it on air. when options action returns. tr

hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if there was a single site where you could find the right hotel for you at the best price?

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steve, other than making me move stuff, i'm here at the td ameritrade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade. . finish line surging today. taking sneaker stocks higher along with it and the group b will be if focus next week when the biggest sport rescue taylor reports. that would with nike dom is at the new york stock exchange with a look at what we can expect h hi, dom. >> shadows are getting long and that means we're near the tail end of earnings season so that tail of the end of

earnings season includes the biggest athletic apparel maker of course we're talking about nike so what should investors expect out of nike when it reports earnings next thur after the closing bell nike is expected to report earnings of 50 cents a share of course there's going to be a lot of attention being paid to the commentary about future sales orders now the options market pricing in a move of around 5.5% on the heels of the report. over the longer term, the move is up or down around 5%. now, over the last eight report, nike has finisheded lower, so melissa, options traders think possibly more volatility is when history says -- we'll find out on thursday after regular session trading.

back over to you >> all right, thank you, have a good weekend so, if you're worried nike could run into some hurdles, don't because mike has a way to pay the stock no matter what happened take it away >> we're going to take a look, you're going to get aceps a sentiment we've had on this. when you are neutral to bearish, one nice thing about selling call spreads, you're raise iingh probability of profit of your trade. and unlike selling calls naked which is we don't advocate, you can do this whether or not you happen to own the stock. so, specifically, the trade i'm looking at as i'm looking outs to july, i wanted to target this level, fallen out of bed basically and you can sell the 53.5 foot spread and collect 5 cents for that i think we want to look at what cart has to say. you're collecting 35% of the total maximum value.

dom said the options market is implying a larger than average move but lately, it hasn't been moving that much that's one of the reasons why a short trade may be the way to play this one. >> we go to carter because he said let's check in with carter on that. >> i heard that. technically, not very good this is a marquis stock. a stock markets and marquis stocks are make iing all time highs. if this is down 20% and acting poorly it has two heavy props an gaps over the last several months and often associateded with news an its earnings something's not right. so, two gap, not one they usually come in twos or threes >> i think that's a really, the most important point here right now. i think expectations are very low. despite it trading at a premium market it's down 20% from its all time highs. down 10% from its 2017 highs that just tells me excuse me,

sentiment is not particularly rosy in the name, so you have a set up here where it held that $50 level which was a big level a few years back where to me, you can probably buy the stock we understand there are some head winds in the pizza. we kn business lulu is down 20% this stock is still up on the year believe it or not, but to me, if you can get through and investors aren't spooked by guidance >> to mel's point, so they just announced this big thipg, this is something you've been -- this is what we think is is going to happen that creates a backstop. so, the degree that people think that's a forward looking thing that investors are going to be thinking about thand mute the move out then the earnings is good, bad, somewhat indifference which is one of the reasons why you might be including to sell premium going into the catalyst because it is implying a larger move and there are plenty of reasons why

it might not be so great >> what is this is not what i do trz why is nike acting -- what is the problem >> i think there's a lot of things going on here we talk about retail, i think they're one of the best out there. when you think of thafr actual bricks and mortar experience they control, it's phenomenal. they have a problem of some of the lower end, but say with a foot locker and that sort of thipg. look at the performance there. i think if they do a deal with amazon, i think it makes front and center, it puts you know, gives them the proper ownership that they need on the web. they do a great job on their own site they have a great bricks and mortar, a mobile strategy. >> their operating business is nothing to suggest there's an upside it's catalyst driven >> at this point, it's a premium brand that has traded at a premium multiple in the near term or last year, it's been adidas >> you think though that premium

brands and especially those trading at premium multiples are probably the area most at risk >> what about starbucks? we were talking about it and why nike like a couple of months ago an they made a 52-week high. it's since come back >> pretty similar at one point >> something going it has the stock going down first. going down, starbucks -- i think it's helped. >> you don't have to come out with a new version of coffee people are going to go back for it every day >> still ahead, carter has a hot hand blowing out of the water with his smoking calls on oracle and amgen. we'll tell you where he sees both stocks heading next lg, ll og deeper into your potspuut your phone, think nice thoughts because we are taking your tweets later on in this show 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?

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oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. zblnchs time to take look back

at our open trades carter said oracle could break out on earnings. >> that was a big beat i think you'll get another one here and stock will gap up. you want to play for that. all line tech that could come for that >> i'm looking at the august 41, 45, 48 call spread risk reversal you would pay 1.45 and then sell one of the 48 calls an one of the 41 puts against it 35 cents each. >> the stock was up 14% this week what a call carter, what's next. >> nice when they cooperate. we know what happens when they don't. any way, it is sort of in line with the presumption that it was a news related gap we have two. all time highs >> only a little over 30 cents in profit potentially remaining. went well through the 48 call we were short invested 65 cent this is this thing.

it was quite a victory could have been a better one if we believed it was going to gap as sharply as you did. >> so, this is, i think you move on but if you're bullish of the story, here's a nair joe where you look at the gap. you could sell puts at those levels i know people yum wills come in a little bit, but that's where you want to buy the stock back no reason to think this would fill in the gap. which to my eye, is about 47 bucks. >> didn't you say not to sell puts in this one >> last week >> breakout's all time high on volume now, on to another winning call here almost a month ago, carter built on a big amgen surge >> i think this two year consolidation is likely to set up for a next powerful advance >>i'm looking out to september looking specifically at the september 160, 175 call spread

when i was looking at this earlier. you could buy this for about $5.85. net debit of $4.65 >> it's up 10% since that call >> we spent a lot of time in terms of the -- >> stick with it >> we do we adjustment we roll up eex yr right, up nt,ou weweet tweets and the final call. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.

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tripadvisor. the latest reviews. the lowest prices. 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 time to take your tweets our first, why in some cases do traders sell calls instead of buying put >> if you think the move is going to be sharp, you should buy puts >> time for the final call carter >> 3measuring. i'm a seller >> call spread seller in

earnings >> yes, sales meet next week i think upside calls make sense. >> all right, looks like our time is expire id. i'm melissa lee. check on the website have a great weekend we'll see you back here monday on fast. stwrou rou other people want to make friends, i'm just trying to make money. call me at 1-800-743-cnbc. or tweet me @jimcramer this market can't seem to make up its