it is friday and that means it is time for "options action." here is what is coming up. >> tonight, disney stock, down around 30% year to date, next earnings results could be pivotal for the company. carter worth place jack sparrow and chart the course. and tony keeps clear of all volatility and those bottom fishing instead. after a drop, he likes chips, find out which sector he is favoring now.

and a follow-on to our previous gold miners trade, mike focuses it on gold. it is time to risk less and make more. must get right to it, disney has had a rough start, down 30% this year and the earnings report next week could be pivotal for the stock. could a turnaround be more than a figment of your imagination? carter worth is here to chart the ride. >> reporter: is an unmitigated disaster. it is a mess, and sometimes there is opportunity when it goes bad. here is the numbers. you will see, these are the worst performing stocks. i have mislabeled that, that is in a 12 month trailing, not your today.

disney is bringing up the rear, down 40%. each of these stocks has their own issues. let's look at a chart or two and try to figure out what we have. here is a comparative chart, two lines, very straightforward, s&p versus disney, five-year basis disney has lost. the question for disney, look at the drawings on this next chart. call it whatever you want, it has the elements of a bearish to bullish market. the sequencing would suggest that something is afoot. look at the next way to draw the line, same chart and same timeframe, the downturn is in question and we have moved above it. put them together and what we have is a stock that has moved above a downtrend line and has the elements of reversing. finally, there is this, look at

this relative performance chart, this is simply disney relative to sector. final chart. every time we have come down, relative to this downward sloping trendline, we have bounced. the bed is this is an instance of so bad it is good, play for a bounce. >> i am following the logic, what is the trade? >> disney, for frame of reference, the peak earnings in 2018, trading about 15 times the number, eps fell because so many of their businesses were impacted by the pandemic. we are starting to see some signs of life in the parks area. the important thing to remember, a lot of people have been focusing on things like streaming, they are trying to

have their own on-demand service. the critical asset that disney has is espn. much like news you are watching right now, must-see television in real time which is an asset because it generates about $4 billion, one third of their ebidta. this is a company that may not get back to its 2018 numbers but it does not need to to be reasonably valued, if we get back to six dollars in 2024, this looks like a compelling situation. when we go into earnings, we will see options premiums slightly being elevated, that is the case, the nearest regular spread, august, selling that spread, just slightly out of the money, could collect $1.60. even if the stock trades sideways for fell a small amount, you probably are okay. you get to collect all of the

premium if the stock does rise and your maximum risk will be $3.40 per share. that is if it fell all the way below the $100 price, i think that is less likely. >> your thoughts on the trade, tony? >> looking at disney, there is optimism, especially on the back of what we heard from netflix this quarter and hilton and marriott which reported earlier this week. travel seems to be coming back at a strong pace and that is good for the theme parks in the streaming direct to consumer business. i think the 110 level it failed to get above in early june could -- earnings could be the catalyst that we see the break up on that level. mike is using the credit spread, something i use often going into earnings because two out of the three possible scenarios, if disney goes higher or they go sideways, this is a strategy that will be

profitable. the trade-off is the fact that you have negative wrist to reward ratio. i think that disney could move meaningfully higher on earnings and my preference would be to look at purchasing a debit spread and taking advantage of the upside. my preference is more so based on perhaps a different outlook than mike, not because i do not like his trade. >> i will give you the final word, mike. >> the real issue is whether or not you think that the market may be reaching some area of potential resistance. i do feel that way. we have some uncertainty, we have to figure out what the fed will do and we have inflation numbers to worry about. i think we are at a difficult level for the market and that is why i selected that. >> good! clinician let's switch years, tony likes to consume chips, taken away on intel. >> the reason is similar to what carter is looking at in

looking at disney, this stock has a dismal chart but we need to pay attention to the 35 double level we have now reached down to. this was the level the stock stock, it was below 35 for 16 years after the.com bubble. it only broke out in 2017, peaking at $60.50 before coming back to the 35 double level and the market has memory and this could be an opportunity with long exposure. if you look at the sentiment, this is what i think is most interesting, only a quarter of analysts that cover intel have a buy rating and they do not expect meaningful revenue and growth until 2024. right now, the sentiment on the street is fairly overly bearish and that sentiment leads me to be more of a contrarian, specially that we have reached the level two go for long

exposure. the structure i want to use is taking into account the fact that i'm looking for long-term opportunities for intel and going out to the september 9th weekly, january 2023, 35, 38 el diablo spread, at the money call option and collecting $.44 by collecting the september 9th weekly option with a strike price of around $30. pain under 10% of the stock value to gain upside exposure through january of 2023 and, by selling a diagonal spread, i have the opportunity to potentially sell further calls against my long call to reduce the cost of purchasing the long calls. >> what are your thoughts on the strategy for intel? >> i would point people to earnings we just saw in uber. that tells us, when the street

is so pessimistic about something, what can happen when you get any kind of decent numbers coming out. you have a real upside, and here is a place i may use a straight vertical on the bed because the problem for intel and the reason we have been seeing these steep declines is because management was focusing more on marketing than engineering. that takes some time to correct the problem. >> carter, do you see anything in the chart for intel? >> just as tony articulated and similar to disney, this is a prototypical so bad it is good. if you look at the relative performance of intel to the philadelphia semiconductor index, which is first print, december 1st, 1993, intel is making all-time record relative loads. that is the definition of so bad it is good.

>> tony, i will give you the final word. >> i appreciate carter, that is very similar trade ups to disney. about using the vertical we just had earnings and i feel the lack of catalyst for me is better to take a longer dated call diagonal. >> there is more options action after this. take a look. still to come, if the fed goes to recession than inflation, the professor is going along gold. which name has him shouting, mine. and reach into your pocket and grab your phone, tweet us a question at @optionsaction it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app

so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪

welcome back. at the very beginning of july, carter and mike looked at the junior gold miners. >> these are the junior miners, the most destroyed and they have been a pinball machine, they have been working within this channel almost perfectly. what i am thinking is that we will move to the upside, whether m&a or because this is a better time to be in gold. >> i was looking out to september at the 34, 39 call spread risk reversal. >> after a little bit of volatility, that etf is where it started in july.

carter, you have been updating your thoughts on gold, give us a summary. >> small miners are outperforming the larger brethren but we will look at the bigger ones. gdx, the first chart is that versus the gdxj. ic the beginning of a reversal. it is nascent, only seven to 15 sessions in the making. another way to draw the line is put in a trendline, all we through the trendline? the question is, is this enough to make a call? the gdx has already done that so we think it is. look at barrick gold, it is not through the trendline, the

thinking is that this is up and out. look at two long-term charts, this is an all data monthly chart that essentially, barrick is unchanged from where it was in 1990 which is pretty shocking. independent of that, put some lines on. we have dropped to a trendline that has been in effect since 2012. we think you get a bounce as you have seen the previous two times. >> mike, give us some thoughts on the junior miners. >> obviously, i have that junior miner position -- we pushed on that because we really needed it to rally sharply higher than when we initiated the trade and ended up with a small profit on that one. as it happens, we have to hold

barrick gold on the equity fund. i am alongside carter because we are long gold. this is not a junior miner , a $28 billion company. i was looking at this today, there was a favorable risk reward relationship to be had by simply purchasing the september 15, 18 call spread. i was looking at that because, at the time that i was, this was about $.50, enclosed $.60 in the money by the end of the day which was only going to cost me about 85 to $.90 per share. that is a very favorable risk- reward relationship on the long side because it pays about two to one if you get a rally to the 18 level and are resting less than one dollar per share on the downside between now and

september expiration. we were having a conversation earlier about rates and the fed, inflation, one of the headline inflationary numbers that a lot of people look at, most people see it every day as their driving past gas stations, the cost of energy. we do have some bad inflation numbers and i think the numbers we get next week will look bad. if energy costs, they have been coming down, if other inflation numbers are going up, and if the price of gold goes up but energy prices are going down, that is good news to the miners because energy is one of their input costs. if the costs are going down but the product going up, a good place to be. >> tony, it has been the mike and carter show on gold, what are you thinking? >> we have a theme, we need to discuss this all looking for stocks significantly down on the year and looking for opportunities. barrick is in that group.

one thing that is important, that we have to pay attention to, we have pulled back to a important level, the bottom was around 14.5, those of the 2018 highs. this is an important level to pull back to and an area of support to for the long opportunity. near the bottom, head and shoulders formation that carter was showing you, these were some classic signs of downside exhaustion with lower lows for barrick, but not momentum confirming the lows. those re some of the classic signs we see for picking a bottom, or confirmation of a bottom. i took a long position in gold a couple weeks ago and i agreed that there is a further upside, a further move to the upside for any of these gold miners, it is a leveraged play on gold and i like the trade setup of using an in the money debit spread for the exact reason he said, the fact that the

breakeven price on the spread is just about 2% higher than where the stock is trading today. he is only risking about 5% of the underlying stock value in order to place the bet with more than a two to one risk- reward ratio. a nice balance with gold. barrick would get 2.5 times that his pain for the debit spread. i love the trade in gold and the setup that he is using. >> carter, your golden touch, your final take on the gold trade. >> one thing that is starting, you look at the all data chart, the gold-mining business is tough. you are digging and hunting and pecking, very hard way to make a living. but there are moments when gold and gold miners are the single best thing one can do. having a year, whether the boy on or etf, we think that that

is something that eeds to be honed. >> next, we are answering your tweets. don't go away, your question could be next.

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a pre-set trade strategy in seconds. so we gave 'em thinkorswim® web. because platforms this innovative aren't just made for traders -they're made by them. thinkorswim® by td ameritrade welcome back. our first viewer rights, i have a decent size position in united health group and was wondering if i should add more at these levels? i have owned the shares for close to 10 years and love the stock. carter? >> let's start with the fact that that is pure genius. the last 10 years, united healthcare is up four fold in the s&p 500, it has been with microsoft on a tenure basis, beaten apple, the google. you have a good thing and the patient's to stick with it.

it is returning to his april height and the assumption is it will exceed those highs. you have a perfect north by northeast, steady as she goes, large, deliberate operating business that looks like it has more to go. >> tony, your technical take on united health? >> i completely concur with carter. not only did we return to the april highs but the relative performance of united health to the healthcare sector, it has broken out past the april highs which is a good site this could be an opportunity to add more before a breakout. we expect 40% eps growth over the next couple of years with revenue growth double digits, low double digits and trading at about 21 times next year's earnings is a reasonable valuation for a name like united health that has been consistent in generating a significant amount of free cash flow. i like the stock and a good time to consider adding for the

breakout. >> our next viewer asks, with the huntington ingalls industries moving higher over the past couple weeks, do you think it will be able to sustain his progress and what place do you recommend to take advantage of the movement? >> over the past couple of weeks, this has been up a lot over the year. not a lot of stocks weekend .2 up more than 20%. it did have a positive move out of the recent earnings. those things are all good. that said, it appears to me and this will be a question that should be directed at tony or carter who have more technical debt, it may be reaching a difficult level. here is the thing, if you benefited from the move, you have the opportunity to substitute the long equity position with options now that earnings have come out and meet options cheaper. >> tony, do you want to get in on that one? >> a similar trade setup to the

united health we were talking about with recent highs in april about 227 but the one thing you should pay attention to, not the price absolutely but the relative price, relatively to industrials it has broken out which is a good sign for the stock going forward. >> up next, the final call, and stay tuned for a cnbc special, "inside jobs." we dive into the employment report and what be stronger than expected number says about the state of the economy

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i think it is time to get some long exposure with the call back. mike. disney is cheaper than it was in 2019 but next year they will have higher revenues. >> the does it for your us here on options action. don't go anywhere, special inside jobs starts now. welcome to the cnbc special inside jobs. it is a whopper of a day. wall street just did not see this one coming. it has enormous implications for the economy, the way we work and maybe the way we all live. can you say four day work week? we will talk about that. jim cramer has the night off. but we will get his take on the jobs report. but look at this red hot