michael lock. so far, they have found nothing, but everyone fears that, one day, remnants of lock's terror will surface again. much more coming up ahead. tonight, showed signs of a turnaround in the last month. already up about 20%. can he keep that momentum during its earnings next week? it's been a poster child for the rise and fall of big chef. tony zane says now is the time

to write over to a delivery of real returns. he will show you how. the industrial giants have to report results next week. year to date, unsuccessfully tried to dig itself out of a home. mike cohen thinks that's about to change. it's time to risk less and make more. options action starts now. this past month. substantial turn. mike, your thoughts on this. >> this is a really positive week. it is a positive week, because we ask low expectations several weeks going into. what we usually google is a good example of this. responding favorably there. all of the other big names this week. amazon, it's interesting.

i don't think an operating standpoint is upsetting, but the price action is very positive when we take a look at it. of course, it looks like there is some progress going on in washington. whether or not you happen to like what is going on with the schumer mansion deal or not, there is some move in. it does create some bit of a tailwind for equity. generally, it is a positive. what we have seen might be a little too much too quickly. >> that certainly is having aramark, as well. >> that's exactly right. it's a pretty pivotal level. it's top information we are currently seeing. we could get it down to 2.3, which would be a huge turnaround for equity. when we get to where we are

right now, as we headed towards that 4200 or 4250 level, this is where we look. if you look at the chart, we are still in that downturn. i think the strength is an opportunity to look for some shortage. the reason for that is that because on the award side, it favors the short side. if we do break out up to that 4300 are further, then we could simply say we were wrong and looking at opportunities then. we will take down a fairly strict small lofts. >> your thoughts? >> it was conviction. what we know is that the big earners come out. we spent a lot on big moves from depressed levels. if things went on the way down, they are leading on the way back up. 30% difficult levels. earnings is 5%.

it is not impressive and i think we've come a long way. let's look at a couple of charts and get around. what do we know? we know that if you look at a stock of the quarter, who has done what? it is a case of the market. i think we might have some when we look at this. if you look at its relative performance, we have this huge ricochet. look at the next chart. it leaves us up again to a difficult level. you can see very clearly. let's see that in the next chart. you pick a stock and bet against it? i think you do. this is as precise as you get. it is back down from five times to the penny.

it fails again. it is up 42% versus stocks up 24. we see expended energy and it's not likely to use such a good bet for earnings. >> mike, what's the trade? >> this is an interesting one. i indicated when we kicked off that i didn't think it was all that bad. when we take a look versus intel, these two companies really divert over the course of the last couple of years. back to the end of 2017, this is a big company. fast-forward to the present day, one of them is down about 25%. the other one is up 15 fold. massively outperforming intel over that period. it is really execution. the reason i point this out is because from a fundamental standpoint, there would be reasons you like amd and you

might not like intel. we see that in the place action today that said, i agree with carl from technical standpoint. 20 times forward earnings is not particularly expensive, but it's not cheaper to the market either. what i'm interested in is doing is putting on a truth that will give you some exposure in the event that these doctors appoints, but doesn't take any risk and demonstrate that when they report next week. what i was looking to do was buy the august 85 one by two. you can buy one of the august, which is a little over three bucks. you might actually collect a small amount of premium. if anb is a big nothing , then

no harm no foul. if it declines through that, you will see profits at about 85 level, because you are short instead of one, your profits will trail off. they will have massively disappointing earnings and do on the stock i just below 80. that is more than a 15% decline from where the stock is now. those expire on august 19. assuming a book this next week, that would be a pretty steep decline. you will be owning the stock something in the middle of 18 times or less. i think this is a way that you could be a bit tactful going into earnings. if they are like the ones you experience in intel, you have the opportunity to profit. this is the one that is executing.

>> they indicated as such. they are taking intel's share. something tells me that intel is paying better, which is what we saw in today's market. >> that is exactly right. the charts and the fundamentals are opposed to each other. the chart shows the strength and i currently have a couple of short positions here. i certainly agree with the strength that we have seen. we have to put it into context. it is in the clear downtrend. it works favor here to the downside. anb is its main competitor to intel. it gives us a little bit of a peek into what anb might look like. these are all potential tailwinds for anb. that is what i like about mike street. it is extremely creative. if it does not decline

materially or substantially, he doesn't see a lot on this trade. with these types of ratios, it is really tricky to put up the strike price is:, because if the figure out what sells. i like the 85 strike that he sold on this foot spread, because the 85 happens to be just inside of one standard deviation to the downside. that is the expected move in that timeframe. these are the practices we like to look when you are trying to put a needle. >> from chips to trips. the ride-sharing is down 44%. what are you saying? >> i'm taking a look at uber, which is really a story of market share. they are taking more risk and growing faster. if we look at a chart or go uber, what we have

seen as a primary downfall since every 2021. we have seen a downturn of 18 months. what we started to see in the past couple of months is what we typically see more in market bottom. this is about $28 to the upside, which is a pretty we could see on turning the catalyst. the difference between uber and their primary rival. the fact that it grows at what half of what we see with uber, which is about 70% year-over year revenue. this type of growth numbers justify the richer evaluation we are currently seeing in uber. what is more interesting is the rich implied voluntarily going into earnings. the market is implying a 12% move. this is the historical average of only 5.3%.

i want to harbor this elevated and take a risk by buying overstock and selling a put option. i am selling the 22 1/2 foot. the are slightly out of the money and we are at the money put, which elevates the extrinsic value of the option i am setting. i'm going to quote a dollar -- $1.46. this may be the option of buying the stock if uber is 22 1/2 by the august expiration and $21.15. that is the all-time low. this gives you the opportunity to participate in the upside while collecting some premium, which arkwright rich going into earnings. >> mike? >> i do like this trade. one of the reasons for that is that not just the fact that the

stock has reached the price levels, this could be the first year that the company actually is positive earnings in. this is a pretty critical earnings if we will get visibility on whether or not that is a possibility. if we do get the streets expect in terms of how that higher revenue growth is translated to the bottom line and cash flow, i think this could be an attractive entry point. one of the things that i like about that thing here is that we are bouncing along the bottom and we do have those elevated premiums. that is one of the reasons why you could look at some. i happen to buy the stock. if i've been thinking about it a little bit more, --.

>> head and shoulders bottom. the stock's relevant performance is very poor. by selling premium and not just getting stock. >> check out our website and our new setter coming up next. is looking to build a trend into the company's earnings next week. calling all fans, reach into your pocket, grab a phone and tweet us your question at options action. if it's nice, we will answer it on air. options action is sponsored by baker swim.

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since march since june 2020. industrial sites. congratulations. it is about to teach you how to scratch even bigger profits. mike, take it away. >> we are going to talk about covered calls going into earnings. it has been a phenomenal one up the 16%. more earnings coming up.

the question we need to ask ourselves is how much further can this go? if it has had much of the run that is to have, is there way we can achieve a little bit more? i am looking at selling covered calls against and essentially collect some premiums. the idea here is that when you do this trade, you want to make sure you preserve at least some of your upside potential. generally speaking, you don't want to sell at or in the money. one other point is that further out in time, you want to choose your strike. you want to try to look for potential levels of resistance. i want to look at the expiration of the 210 strike all and i could crack about it $1.85 or so. i am looking to collect something along the lines of 12% annualized in premium. just

to make sure i am making it worth my while. if it gets up to go to to 10, it will have 26% off of its week. i think that will be an ambitious move. as good as it is for caterpillar, you are looking at 9% year-over-year revenue growth. i think we will probably start running into a little bit of resistance as we start approaching these higher levels coming out of earnings. this is when you want to stick take a look at the opportunity to enhance your return on positions you already hold. >> what you make of mike's level? >> he is exactly right. the same phases to some extent to be cautious. let's look at a couple of charts. the first to the wine and tell a big story. this is snp versus caterpillar since 1980. will at its biggest competitor, john deere.

john deere has doubled the performance. that says a lot. caterpillar self, the selloff of the past year and a half took us white down to the peak of 2017. we don't stop that line. the balance is a little bit too far too fast. as soon as the next chart, we see absolute low from 19%. what is this? this is around to the midpoint. this is where interested sellers are lying awake we are to find to find as such. >> what is your take? >> i like it a bit. we have the exact same chart set up as we did in early june, which is a sign of exhaustion of into this $20 level. the fact that you recently booked 180 and climbed back up is leading me to believe that we will retest the recent lows

rather than bounce back up about 220 level. it is really interesting about, because he is causing a fair amount. just to put into context, this is about 2.4%. he is generating more than half of that in 21 days. it is quite high, but the one thing i will say that if you are a caterpillar investor and you are concerned about a downturn, you could potentially use the premium here on these cover to buyout of the money options and buy yourself some production. depending on how your views are, i think we could see some -- it might make sense to put some protection. next, we are taking a look back. send us questions at options action on twitter. we are back in two.

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year. that happens to be the same breakout level we saw in september 2020. what this indicates is that the decline we have seen in the industry has perhaps come to an end and that opportunity to gain some exposure. i am going out to the august 12 expiration and looking at 70 1/2. this allows me to collect about 39% of vertical lift in about 2 1/2 bucks. >> has surged 20% since the claimant funding plan. what do we do now? >> the earnings was really the catalyst that drove this higher. i think it confirms the rotation we have seen here. we have seen credits like this, which is about one half looks at $.13. we have a 95% of potential profit, so it's time to take the prophets and move on to the next. amazon has gone up too much

too fast. selling the august 135 call a good head. mike? >> the move that we have seen around a little bit. calls is what you are suggesting here. i think that is an excellent investment strategy. it is not so much ahead. in this case, you are collecting a little bit over 3% of the stock is to do that. if you want to head it, you could do what tony was suggested on the caterpillar trait, which is to use those proceeds. >> our next fan asks, for apple in august and september? if so, is there another trade for these prices? >> as we said, my view is still the same. we got a little further than i expected on apple, but the answer to your question is yes. call credit spread. those type of strategies at the

moment. the traders have their final calls. the tech trade is coming up next. we will see kathy's word about what is next for the tech space and innovation stocks. we are back in two. options action is sponsored by baker swim . you might have heard of carvana and that we sell cars online. we believe buying a car should be something that gets you hyped up. and that your new car ought to come with newfound happiness and zero surprises. and all of us will stop at nothing to drive you happy. we'll drive you happy at carvana.

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>> that is all for here at options action. we will see you on friday for more. don't go anywhere. tech trade starts right now. >> this is a paid advertisement for csn. >> you know, the one thing you can count on in numismatics, which is the hobby of collecting coins, is that the pace of change, or change, is glacial. [ chuckling ] okay? we would hope from the -- oftentimes, as numismatists in a hobby and in a profession, we hope for a snail's pace from the united states mint. nothing is done quickly. nothing is done without forethought.