>> all time highs for one dow stock? particular >> don't stop. >> he says cigarette stocks are about to catch on fire and he has a way to get long for less

>> and don't worry, mike has a way to buy at&t for 5 krcents. the action begins right now. let's get right to it. take a look at stocks that have been on a stealth rally. they say the charger setting up far bigger breakout for the group and winding down in particular break it down for us >> yes down as much as 10 or 11%. it has come to life. t the i think rates are not going higher let's start with that. and i think the key take away

here is after a bounce off trend we have undercut, which you can quite clearly see. we have thrown back right to trend and we started just, again, undercut. it is not the greatest circumstance so with that there's maybe the backdrop let's first talk about home builder. this is a five year chart. you have this big run up and then this. this give back is quite proportionate. if i do that on the next chart you can see that it bounced almost precisely off that line it is what it is all about so let's focus in on this here and now. that's the five year chart

here is the here and now >>. >> put this line in. the principal, nak bet that it will continue. once you must've above trend it will continue. so again, ton downside the usually the beginning of more trouble. home depot, no judgments no an knnotations. these are the last three give backs. that you are all about 5 to 7 weeks. 14%, 18%, 10%. all 10% plus but look where they stop each one almost precisely -- not almost, exactly off a trend

line so i think this is going to ultimately make the new high >> i really do like home depot this is a name that's growing, probably about 7%. so the stock is not expensive. it means we can keep our trade fairly simple here it is $3.25. so that's a little over 1.5% of the current stock price. i think with option prices this low and the fact that the stock is also i think very reasonably priced at these levels it's easy to take a fairy simple bet i think. >> what do you think of the trade? >> if you're in the fundamental and technical camp i think the way he is choosing to play it

less than 2% of the underlying stock price it makes perfect sense. the most compelling charge i saw was that in the which literall had its first. the options are pretty -- >> that's right. it has a lot of things in it what i was thinking sheer while those are also coming to light this is the big super cap name that big assets can play most are mid-cap and a lot of larger ones cannot engage in small names like that at the biggest level. >> how does that itb look? >> virtually identical they overlay at about 95 plkt. >> any caveats about the trade you're putting on? >> i mean the one thing i would

point out is it doesn't happen to capture their earnings which would be the big and obvious they are low priced. it is about as low as it ever gets in home depot >> all right staples, the sector has gotten stopped. take a look. campbe campbell soup down almost 30%. they say one of these names is about to light up. >> i started thinking about over there upgraded the consumer staple group which is not a table pounding sort of upgrade

>> that massive gap after they reported dispinting shipments and disappointing demand it was after those results there is an issue of rising rates over the last year or so you may start to think about it where it was so poor it went down and maybe you see that reversal again, to me i think you look out to the catalyst which will be the earnings which expectations are not high. the stock is down in the dumps they report on july 19th that's a day before july

expiration i think when stock was trading it is 87.5 it is to the upside. again, it is really bad. the break even is just about 3% higher i have one more chart i think the really important look at thchlt i'll let carter speak to it. to my eye i think the slightest bit of good news, you get the stock back up to $90 it could make up to 6 if the stock is up 10%. >> so there is -- from time to time there is something to call something so bad it's good we know it's the worst performing sector on the year.

we know it has ban bit of relative strength. the draw down of 17.5% in a three month period going back. the stocks every suingle other time, this isn't so bad it's good to put it in the money context we know it came back we know bombed out retailers are left for dead. >> what did you put the trade on, mike >> it is an interesting case we were just talk about how low the options premiums are they aren't low. they are well above average. that's probably the reason dan is looking far sprint here when you have fundamentals that are as grim as a name like phillip morris in this case you definitely want

to use it because you're trying to mitigate the fact that premiums are well above their norms. >> if we see the ten year yield go higher than that what has been the relationship between yields and dividend paying stocks >> so the relationship is sort of any given we know the relationship is agre agreed upon. >> we don't want you to buy cigarettes and we don't want you to smoke but the trade is up because of the inputs. targeting that earnings event it doesn't even have to be that company beats and guys hider >> check out our web site. great articles what could be better here is what's coming up next.

if the number dialled the busy you'll hear the familiar busy signal. when you hear this signal, hang up >> don't hang up on shares of at&t mike has a way to get long for just a nickel. he'll break it down. plus calling all options action fans. tweet us your question if it's nice we'll answer it on air. when options actions returns >> logical well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing.

>>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

(indistthat was awful.tering) why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills.

boom! mad skills. education to take your trading to the next level. only with td ameritrade. julia. >> district court judge promised a ruling tuesday at 4:00 p.m on the department of justice's suit to black the time warner it follows a six week trial analyst is saying wall street consensus is that at&t has an 80% chance of winning. he believes it is still more of a conflict if at&t wins with no conditions it's a huge relief to at&t and time warner and their deadline to complete the deal

a push for content in distribution companies it was to prevent the merger from going forward. it could cripple the deal. it would not only kill the 85 pistol dollars deal. it wous cast over other media deals. there would be questions about whether they would considering how it would delay the merger process. >> all right thank you.

mike has a trade on at&t for us >> yeah. sure so in situations like this where you have an upcoming catalyst we talk about the fact that options premiums get elevated we'll look to maybe slightly more complicated spreads what i'm looking at here is a call spread risk reversal. we'll capture this potential but avoid downside potential i'm looking to july 27th it is 32, 34.5 rehearsal i will collect 55 cents. pay 80 and then sell those for 30 cents that structure will cost me just a nickel once that comes down the options re premiums will drop there is a chance this trade could be profitable. we'll chauapture but we'll avoid

$2.5 worth of downside down to the 32 level you'll notice over the last five years 32 is pretty much as low as at&t has traded that's the reason i'm willing to sell that right here >> at risk reversal. >> it is a great trade structure if you agree that the stock has bot bo bottomed out the other thing that's interest sg a it ing is a lot of things has happened if the stock was down and you had a couple of weeks which is really the trade that you would love to do that. maybe at&t decide to buy back a lot of stock you just don't know. i think it sets up pretty well >> they don't get the deal through -- there's a question for what assets they could possibly buy

>> it would be a horizontal one. >> there is a lot of silliness >> we were at 31, 32 it is pretty well defined. there is a gap above my hunch is higher things like this, frankly, as bad as it is, these things are bad. they are in the same category. >> they are so bad there >> they are terrible they are so terrible it is worth it >> so if you had to take a shot would you choose another media stock and not put this on? >> it is deal specific this is just an oversold condition. >> if the deal goes through it could provide fuel to the upside so bad it's good charts, right >> yeah c it's not just going to be this

name some of the older sort of telecom companies dealing with this, they are all dealing with the same issue are they going to be able to do this things to adapt the changing landscape my suspicion is they will be able to do that. we'll find out next week of course the reason we are structuring this is there are some near term downside >> yeah. i would add this about the landscape it is an absolute free for all. you sprint and t-mobile merging. it should have a lot more scrutiny but they are ultimately going to need content.

it will be a very busy deal period it would not be a free and clear sort of deal they need to make the case it is not going to be a free for all >> a lot of investors look for guidance into situations where a lot of things are at play. are you seeing unusual activity, mainly is comcast and disneys that have sort of deals pending based on the result of this verdict? >> yeah. i mean what's interesting, all of these names typically are seeing slightly elevated and implied volatility i think disney is number wuchon. disney has been trading far while now. people are concerned it was basically strading off of the espn profit blt for a long time the summer of august 2015 it basically washed out it has been, you know, a little bit of a rough road for them ever since

i think they will pull out of this as well >> all right speaking of at&t let's get a check ton cramer cam he will have his game plan for a t week ahead twitter share, the newest member posting double digit gains just this week we'll explain why. if you're on twitter send us a tweet. we'll read it later in the show. much more right after this see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy.

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five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪ welcome back just last week mike said twitter was about to fly high. >> one of the things we can see is it has had a pretty strong move we are getting right back basically to the prior highs right here i was simply buying the 36, 41 call spread. by selling that stralgt call i have improved my odds there's a chance that stock is getting -- you my $37 break

even >> it did. twitter soaring more than 18%. how are you trading twitter now? >> the most was $5 it could still only be worth $5 but worth about $3.40 right now. it isn't quite what it was when we zboot it. we more than doubled the amount we spent on the trade. you should take this trade off and if you're inclined you can roll the strikes up and maybe up and out. it is probably a $5 call spread is the way you want to call that this is one of the situations. that's what we want to have happen it may have done it a little bit more quickly than i anticipated. >> at this point a lot of potential has been exploited in that sense i would be reducing -- >> yeah.

so, you know, he designated a certain amount of people premium. from here on out i think it has been a lot more difficult. i think investors will start to think about this far company that's not growing usersreater than double digits it is not expected to be too much greater up next the tweets and final call well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. does it look like i'm done?yet? shouldn't you be at work? [ mockingly ] "shouldn't you be at work?" todd. hold on.

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(indistthat was awful.tering) why are you so good at this? had a coach in high school.

really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. welcome back our first tweet asks when stock moves up when you do you roll up and when dough you sell turning it into a vertical spread? >> that's a great kwechlt these are kind of related. a lot of it has do with timing if you had a really quick move where the premium doubles very quickly it may be a great way to turn it into a vertical spread

you'll be taking premium off the table. >> time for the final call >> home depot in particular. >> don't smoke but, yeah our time has expired jim cramer right now ram paid fow do you find yourself sleeping too hot or too cold, not getting the support you need to help relieve painful pressure points or struggling just to get comfortable? then get ready for a revolutionary, new sleep experience. introducing the my pillow mattress topper, the next generation in sleep innovation from the company that brought you the world's most comfortable pillow. [applause]