hey there. we're live at the nasdaq markets. i have the guys getting ready to kick off the fourth of july weekend. here's what we've got on the show >> put that coffee down. >> that's what investors have been doing with shares of starbucks and dunkin'. but there's something in the chart that suggests now is the time to buy. we'll break it down. plus, a number of left for dead stocks are staging a stealth rally. we'll tell you the names and how to cash in and later, did you lose money in any of the fang stocks? >> god darn. >> well, relax. >> because we have a way to get

your money back for less than three bucks. we'll explain. the action begins right now. ♪ ♪ let's get right to it because as the dow and the s&p close ever so slightly higher on the week, there was somewhat of a stealth rally. check out the xrp up more than 3% this week alone it was a number of the department stores that actually outperformed kohl's and dillard's t.j. max and macy's and jcpenne were up 3% let's go straight to the man who called the xrp the worst chart in the world. >> it has been it's been making a series of higher lows and higher highs -- excuse me, lower lows. you've got the point here's the deal. we are over stores department stores have been going down for two years now the fact that we're starting to see some of these names bounce a little bit after we've had a

series of strategic deals. amazon purchasing whole foods for $14 billion. the announcement that i think helped nike a whole heck of a lot that they are going to be opening a store front on amazon. these are strategic deals. they speak to some of the deals in retail and i think when you look at the department stores we know this very well, that there is just way too many of them they need to consolidate they need to close some of the under performing stores. the real estate market there's some good real estate to monetize there they're cheap. we all know thesentiment is poor there's probably stuff to do >> quick one i'd make comparing the basically boxed retailers and things like that to whether you're talking about nike or you're talking about whole foods, there's a difference between brand as retail versus these stores i don't know that it's all that comparable the other thing is everybody talks about the fact that they have these great real estate assets

if that's all of the assets that they have and they're looking to monetize it, that's a buyer's market when i think about it, i'm not necessarily sure we have big bouncing crude that doesn't necessarily mean that it's over. >> we know that when things are extreme you get moves the other way. sort of collapse that. i think the thing is that you've been quite accurately bearish on this i'm not sure anything has changed. yes, they've bounced the real story is there's something wrong more generally >> right what i'll say, there's something wrong in the high end supermarket store until whole foods got blocked. let me just tell you, on that day there was an interesting story. we'll talk about macy's, an article in the wall street journal. talking about amazon's approach and alibaba's approach alibaba is approaching it differently. they're making investments in big box stores they want to apply their set of

circumstances, logistics that's why they want to invest in retailers i think we are going to see that approach amazon started it. we're going to see it in the department stores. may see some consolidation two years ago they were valuing the real estate at $20 billion three of those stores, new york, chicago, san francisco at 7 billion. we have a company now that has a $7 billion market cap, $6.5 billion in debt. dividend yield of 6.5% trades at eight times earnings you'd have a massive short squeeze if we had some sort of etailor invest in them macy's right now is interesting. down 35% on the year, down 70% on the highs sentiments are horrible, activists are gone look at that chart right there i want to tell you look at that down trend

i think the intersection of the down trend and breakdown, that's 30 bucks you want to look at january expiration when the stock is trading at 23 bucks. you see buy the january 23, 32.5% call spread. that call spread costs you $2. on the up side you can make $7.50. i like the risk/reward that is a meaty call spread, it's $2. like the risk/reward here. and i think there's going to be some strategic things that happen. >> the companies that have debt have equity. paying a little bit of premium makes sense for options. if you think about it and you're saying to yourself, is there potentially 10% worth of down side risk, i think i was sort of trying to make the case, yes, there is, maybe more than that, if you are inclined to make a bullish bet, this is the way you'd want to play it. >> i've certainly sat here and

said sometimes things are so bad it's good. i think this is so bad it's bad. the whole premise is it has to have someone take it out. >> not take it out >> that's the same thing. >> carter, what percentage of nike's 11% move today had to do with the fundamentals of the quarter, sentiment or strategic initiative. >> i get it. it's more of a gambling pray than it is an investment. >> not really. everything we do here is big gambling. >> we're "fast money." >> the thing is if you have invested directionally long in nike thinking that amazon was going to make a deal with it, that was sort of an out of the blue special circumstance. >> in fairness to -- but in fairness to dan, actually, he was opposed to my bearish call on nike going into earnings talking about that >> it doesn't make sense this is pretty simple here whole foods, you know, is a premium brand in what they do. there was going to be some value there. nike has the same sort of situation.

starbucks has been in the crapper a couple of times in the past couple of years and they've done strategic things. so to me you look at a brand like macy's, 700 stores in the u.s. if i were alibaba and i was looking to make a footprint here as far as retail in the united states, that would be something, that or target or something would be very interesting to invest in. what do you think what would happen to macy's if they -- >> >> we don't know. also this, why macy's? why not another one? >> i think it's the most likely candidate among the department stores. >> moving on your daily cup of coffee may perc you up in the morning but we can't say you the same thing for your portfolio it's cooling off coffee futures have fallen 4%. our chart master says one of these trades is about to warm back up. break it down for us, carter. >> make a play on starbucks.

it has been weak and i think maybe has some bounce potential. start with the long term chart and work backwards to the here and now. what we have on the screen is ten year chart you can kind of of see the lines i've drawn often if you do break out as you see here from a well-defined formation, whether you want to call it a triangle, a wedge, you represent the debate or resolved up, often you will fall back to the point from which you broke out before ultimately going again. yes, now that's the premise here so let's look at a few other ways to draw the lines here is a five-year chart. you have this great run up, almost a double, and then this consolidation. now one way to draw the line is this, again that wedge and here we have the phenomenon where you rank out and then you revisit the apex before presumptively going again.

another way you can draw the lines is a cup and handle, pretty appropriate for starbucks. yes, here's your coffee cup. the rest of the handle will be like that. okay next chart so i want to zero in on the very immediate. this is only about one year. here's the point we're almost to the point where you've hit the line where you can get your -- so a breakout, a retask and then a go so then with this, a really short-term chart what this is, i want you to focus on this moment right here. this moment right here and now where we are now and then put it in context, what we have here is what you can see, a 20% move up and a 10% give back. my guess is that we found support and that we're going to get a good bounce. i want to make the bet that starbucks after selling off 10% is going to come to life >> mike, what's your trade >> september 60.65 call spread you can spend $1 for that.

company's going to report earnings on the 27th and unlike macy's and unlike some of the other retail things, coffee doesn't fall out of favor. i've got the app a lot of you do, too chances are you're going to get coffee tomorrow just like you did today and every day prior. >> that's fantastic, mike. let me tell you something. i had the technician respectfully disagree with me on macy's i'm going to respectfully disagree with you. please put up a five year chart. >> it didn't fail. >> it did. it made an all time fail. >> it came in 10% hard >> that's what oracle did. it broke out, came back and then explodes >> you know what though, i'll tell you this. we were talking about premium brands the fact that it came in so hard, so quickly there's more down side. >> how do you feel about taking a $1.20 risk in a $60 stock.

>> it's not 10% of the stock price gamble. >> so let me tell you this we talk about this all the time. i use technicals as an input very important input into the thes thesis i think this is as much putting your finger in the air and saying this. to me, what is the fundamental case that this should go back and make a new high and trade at 27 times earnings again without a meaningful fundamental sort of catalyst that's going to cause us to rerate the stock i don't see it. >> if you are at six year lows. >> that's a big input cost, right? what are we looking at consistent underpinning -- >> what's milk doing. >> oh, come on, all of these costs are minor compared to labor. >> especially -- >> non -- >> my point is i actually think that's a horrible breakout to me, i looked at it. it made the high it did not do what we expected it to do >> that's the opportunity and risk you don't want to buy things going up. >> moves 3.5% on earnings we're

risk beiing that. >> would you be short this with fresh new money? >> no, because i would wait for it to make a few percent back. i'd lay it out you're not playing for that. you're playing for a new breakout. >> got a question out there, send us a tweet to "options action." "options action".cnbc dcio com i'll be reading about this holiday weekend. here's what's coming up next. >> cleanup in produce. >> and that's exactly whatdan did with a contrarian call on kroger, and now he has a way to make even more cash. plus, fang has been a disaster, but if you've lost money, we'll show you how you can get some of that money back for next to nothing. the strategy when "options action" returns. 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. ♪ ♪ welcome to holiday inn! ♪ ♪ thank you! ♪ ♪ wait, i have something for you! ♪ ♪ making every stay a special stay. holiday inn, smiles ahead. whether for big meetings or little getaways, member always save more at holidayinn.com

that's why at comcast we're continuing to make4/7. our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most.

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 welcome back to "options action." call it the fang drain it's all getting hit as a tech heavy nasdaq 100 posted the worst move over the year. >> if we talk about the market cap drain here, it's been pretty substantial for those faang stocks if you want to call them that take a look in total take a look at the total percentage drops for some of these names.

talking about a massive news here, likes of alphabet down 6%, netflix down by 8, apple down by 6%, amazon by 2, facebook, the leader of this faang drain, only down, only down by 1%. if you take them all in total as of earlier today it was around $94 billion in terms of market cap loss at the close today we've recalculated the numbers and it turns out it's about $104 billion in market cap loss for just these faang stocks. a very rough month for these guys to put it into perspective, $104 billion is like shedding all of kraft heinz in a month or all of honeywell. pretty big deal when these types of tech stocks fall the way they have the momentum is the issue. back over to you. >> great points, dom dom chu back at headquarters well if the faang drain has you

panicking about your portfolio, fear not mike's got a way for you to get your money back in one of those names. he's over at the call to action. take it away, professor ko. >> we're going to talk about stock recovery strategies. these are the types of strategies you want to do when you're trying to create near money leverage you're trying to get more money back than you lost on the decline. secondly, because there's obviously been some weakness, you don't want to commit more capital. if there was a great technical set up you could stay long i'm looking at alphabet, aka google this chart does show potential trouble as far as i'm concerned. we're going to refer back to the experts over here, but to me that looks like a potential top. we'll take a look at july, buy the 9.50, 9.75 you by one of them for 12.75 sell the two for 12.90

that cost you just over 2 bucks. the only way that this is basically giving any kind of a tradeoff is above 1,000 bucks. this expires on the 21st they report on the 24th. i think the chances that this breaks out to new highs between now and earnings is virtually nil. >> all right so, dan, what do you think >> i think if you're long google, it's had that pull back that dom's just told us about. there are interesting technical levels i'll let carter speak to t. the trade makes sense. the idea that mike chose an expiration so you don't have any gap risk and that would be annoying if you had the stock going through 1,000. so to me i like this trade especially if you're look to go do an overlay and trying to get a bit back in the next couple of weeks. >> i think the first thing is the selling obviously probably not specific to google what we know is exactly three fridays ago on the 23450i7bth

everyone of these leading stocks cracked. not a one has been able to get back above the high. they've all drifted low. might have a chart here, this is a chart of the top five stocks by market cap in the s&p, the names that you know, it's apple, amazon, google, microsoft, facebook you'll notice that we've blown out through the top of that channel, a five-year channel the presumption is we're going to revisit the upper line. in terms of knowing how much money is here, even if it went into energy or financials, the value of this top five basket is 3 trillion that's the same as the bottom 250 stocks there's more down side, i think, in the google pattern specifically all of it. >> of these stocks, that's one of the weakest ones clearly. that's one of the reasons why reaching out, buying a $930 stock, you know, taking on additional risk, if you are really hoping that you get some of what it recently gave back, this is a trade you can put on if it doesn't, you've risked nothing basically to try to get

the additional leverage. >> who i would you manage the trade if the stock rallied back? >> i would let it ride to expirati expiration the catalyst is the july 24th earnings this expires before that the worst thing that happens, it goes up to 1,000 bucks >> it's an interesting setup when i look at apple and google they make up 20% of the 100. to me the further they go lower into earnings is the more difficult trade setup it is into earnings because, again, if the sentiment is poor and the stock acts poorly and they put up the numbers we expect them to do, then the stock should bounce this concentration and these five names makes me nervous. we can see this start to snowball throw starbucks in the mix that's momentum. had a high and then came back in. >> home depot. going to sell, you're going to sell also has that gap. >> what i'm saying, the longer

they can't bounce back, the longer it has the potential to carry over into other sectors. up next, nike shares soaring more than 20%. that's not such great news for mike he's bet against the stock last week we'll tell you how he's fixing his trade plus, hey, you, out there, yeah, i'm talking to you. dig deep into your pockets and send us a tweet. if it's nice, we may respond to it more "options action" after this 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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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. welcome back too "options action." time to look back at our open trades dan talked about kroger. >> the next identifiable cow will be the fiscal q 2 earnings on september 8th when the stock was trading at 21.70. you could buy october 21.22 call spread pay 1.50 by one for 1.70 selling one of the october 29 calls at 20 cents. it costs you 1.50. >> shares of kroger are now up 5% dan? >> this one was like a double whammy they announced earnings, got it

down then they had a strategic amazon/whole foods things. it's too far, too fast you paid 1.50. the call spread is worth 2 you have it where you want it. you want to be patient and wait this out anything incrementally positive i think you have this stock above 25. >> unfortunately we can't all be winners here last week ko told you to sell nike ahead of earnings. >> specificsly the trade i'm looking out to july. i wanted to basically target this level where it had fallen out of bed basically you can sell the 53.50, 54.50 put spread and collect 35 cents. you're collecting 35% of the total maximum value. >> the stock surged more than 10%. is now trading back to its march high what do you do now, mike >> this isn't an open trade. this is a closed trade right here you basically have to, you know, take your losses on this i will tell you though you have to use a limit order if you are going to put this thing to bed because it's a $1 call spread.

you should never pay more than $1 to close it bid 90 cents, 95 cents, that's the only thing you can do from here. >> there's nothing wrong with being wrong. something wrong with staying wrong. if you're wrong, you get out. >> the chart on nike now. >> the problem is after a restart like that, something must have been said and positive. up next, your tweets in the final call from the options pits 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

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. time to take your tweets ritz says it you're looking to be tactically short tech and trend check back, would you rather go short? >> i think you get a check back to 1.30. >> time now for the final call carter >> four week pull back from 65 to 58, i want to tristar bucks. >> mike ko. >> sep 60.

>> if you want to be contrarian like kroger, look at macy's, define your risk and look out to january call spreads. >> our time is expired monday is a shortened holiday trading. i'm melissa lee. check out "options action".cnbc.com stay tuned "mad money" is up next >> announcer: the following is a paid advertisement for the worx hydroshot, featuring longtime worx expert and seasoned do-it-yourselfer paul ganus. ththe worx hydroshot, the worlds first portable power cleaner that lets you clean any time, anywhere. fueled by a a 20-volt max lithium battery, it's self-contained and pressurizes any fresh water source. just grab and go to clean anywhere and everywhere, leaving dirt and grime where it belongs. you can even use your normal hose and boost its pressure up to 10 times. don't let messes build up. quickly and easily maintain your outside spaces and gear all year