right now, a monster week on tap for earnings for the four horsemen of tech a few staples. we'll go inside the numbers, get you ready for the action mcd's, chipotle and -- all out with results later we'll take a look back at a terrible week for tesla. also look at the trade we put in ahead of this week's results i'm melissa lee. on the desk tonight, mike khouw,

carter worth, and brian stutland we start with a deep dive of the monster earning on deck. more than a third of the s&p with results everything from big tech to industrials to energy, pharma, and much more. we'll start off with the big tech names alphabet, amazon, microsoft, and meta all up next week. more than $5 trillion worth of market cap between them. this could set the tone for where the market goes next the chart master is here to take a look at the group's next moves. what do you think? >> so much hangs in the balance. the reason you keep seeing the market this week, another unsure week every day just a little bit up, a little bit down. because the news will inform the direction. this is elemental. for every person planning for a bug move or continuation of strength in am, microsoft, all the big ones, there's someone else's position you fade this thing. individually, the charts are a little bit different we can go through them but microsoft in many ways has a

well defined bottom, but it's ahead of itself. in my case i think you fade it here at least sell calls, do something. but each one is different. if you were to look at -- and this is important, actually. look at this chart this is -- this is the relative performance of the qs to the s&p. so it took covid -- because everything else was so bad -- to make the qs finally recoup all their losses since the dot com peak now we're sitting here churning and stuck. my hunch is it's not what lead us to the next cycle. >> four biggies. we'll start off with microsoft reporting tuesday. shares up nearly 20% this tuesday. you heard the technical take from carter, mike. what do you think about this report >> yeah, so it's interesting amazon and microsoft both have some similar dynamics going on because they both have significant exposure to the cloud, and amazon was talking

about those aws layoffs. presumably some of the same impact is going to hit azure right now the options market is not implying a big move for this one, about 3.5% the day after they report earnings relatively light really directional we did see some may 260 put purchases, but we also saw a big june 209/330 call spread trade probably to hedge gains or make hedged bets to the upside. i think a lot of people feel pressure to own this space, but they're being cautious when they're doing it. >> volatility has remained tame to put it nicely, basically depressed. that allows you to do these kind of trades. what did you think about this action >> it's interesting, i agree price of options have gotten cheaper to the point where maybe it's time to look to own those

volatility with the vix under 20, to so those volatility index is showing that premium makes it reasonable to own trades and protect yourself by being long options tom microsoft's point, to carter's point, microsoft highly core rated with the nasdaq 100, almost a one to one rotation if microsoft isn't the leader i probably want to own a call or protect my stock by owning a put in case there's a lead they are comes from some other sector although microsoft, big balance sheet, low interest rate environment with the ten-year getting closer to 3.5% if it sits there, that's favorable for microsoft usually in a macro environment we'll see how it shakes out at earnings next week going to make a big impact. >> there's a little bit of everything, mike, with amazon results. going look at businessen

enterprise spending when it comes to cloud. >> that contributes i think to the fact that the options market is expecting a bigger move for amazon, about 6.5% after they report, so double what they're expecting from microsoft, even though they do have some businesses in parallel i think amazon is struggling on the grocery side i think that's something that -- i don't think that's that big of a portion of their business they didn't really make as much profits on the retail side when it was gangbusters for everybody, and now retail, i think, is under increasing pressure as consumers come under pressure that creates some head winds, yet still we did see some bullish flow overall for the week i think this is one of those situations where, you know, these companies we're talking about, i think it's important to remember, it's about 13.5% of s&p earnings we think the s&p is going to earn 217, 220 bucks for the year these four companies we're talking about represent about 13.5% of that. so i'm actually fascinated by

the s&p volatility has been low. we saw single digit in spx options, too. >> carter your quick take. >> a laggard that's catching up. has not kept one apple, microsoft. play this one lung. >> meta out with results wednesday. more than 75% this year. brian, what do you think of this one? >> yeah, i think when you look at meta, really going to play almost an anti--tiktok play. telecom, if you look at the whole sector in general -- meta is a value stock in the s&p 500 value communication services that's played strongly to the upside it's had a big run it's probably about time to maybe look to take some profit it's gotten a little too far, a little too fast and you mentioned other big huge names -- the maga stocks, microsoft, am, google, amazon, i'd rather be in those than meta. >> charts support this take your profits? >> i think so. you're talk about something more

than doubling. why not, take some off. >> let's round this out with alpha wet. mike, you've got a strategy on this one. >> options are reasonably priced so is the stock. 18 times earnings. cheaper than the market. this is a place you want to be long did see good sized call buying it was just going out to may, and i think that makes a lot of sense here given the premiums. those options were not that expensive. i think you want to buy calls outright the may 1 ps 15s, they were paying about $1.12 for those, and i'm inclined to go along with that. this is one of the names i do like better i heard karen mentioning it in the last half hour this is a cheap way to play for additional upside and give yourself time to expiration, not just playing the earnings week. >> brian >> yeah, google's been one of those names it's lagged behind apple and amazon and microsoft, so it might have some catchup to do like i mentioned earlier, buying

calls or puts with volatility suppressed makes a lot of sense and i like the trade mike laid out. >> how does the chart look >> like amazon, it's a laggard it's bottoming like it better than microsoft and amazon. >> coca-cola out with results monday shares are virtually flat. mike, you have a trade on this one, too. >> much like the other names we're talking about, this is one where the options premiums are exceptionally low. this is not a cheap stock, really, when you think about it. i think it's trading around 27 times earning. not really a grower. if you consider the environment we're in, these stapstaple-y ty stocks, this is what people like to be in did see some short dated 66 calls trading. i don't think that's the best place to put it. i was looking at the june 65 calls. could spend just over a buck to buy those. oftentimes in dividend paying stocks people say, i would

rather own the stock but we are finally at a point where you can see some interest on your deposit, so it isn't necessary. if you just were putting money into cash and weren't getting anything on it, then it would make some more sense to take bullish bets by owning and trying to collect the dividend but that's less important now. buying calls and keeping cash in reserves is more important than the treasury portfolio. >> that's interesting. hadn't thought about that, not having to own the stock because you don't neat the dividend, 3% or 4%. you can get 4.5% on a cd or whatever bank account you have. >> that's another reason volatility suppressed. allocate money to other places in short dated kind of stuff and get a decent amount of return and play this with basically just risking that buck in something like this. we heard on "fast money" the "barbell" approach to things it's been about big balance

sheet, free cash flow. names like coca-cola, consumer staples. that's why big tech has big runs this year. will it continue i think the overall theme, we head into a recession the second half of the year, or fed continues to raise rates and we feel a crunch. i think balance sheet and free cash flow win and coca-cola is one of the names that falls in that category, continue to play to the upside. >> what do you think, carter >> coke's relative performance to its sector, so to pepsi, clorox, colgate, proctor and gamble, it peaked in 2011. it's never quite been the one to be in. and then you see here on the screen, this is a fairly well defined series of lower hagues i think it's full. i just don't see the keys for being long i would take profits if i were long. >> boeing's got results out wednesday. shares more than 7% this year, and with the boeing story, mike, it feels like two steps forward, one step back, and this time

it's with this fuselage part from spirit that had some issues. >> yeah, you know, and actually sort of on pace with that this week, for the first several days this week we saw a lot of bullish flow, and then basically investors turned it went bearish today. a lot of activity we were seeing in boeing today was actually the may 190. that's excluding thany of the option that expired today. we saw big buyers paying a little over 2 bucks a contract for that this is again one of those situations where i think it's kind of difficult to be long this one or at least to do so without some kind of an edge they've obviously had quite a recovery since they had the early lows on all that bad news. but as more bad news emerges you might want to think about taking some profits on this one >> yeah. brian, what do you think of boeing >> i think investors are still feeling the pain from when all

the dream liner issues came out. when we get news boeing has a construction build or whatever technical engineering issue, it usually lags on the stock, and then look at the chart the stocks almost doubled in just a few months. makes sense to take profits, buy puts this might even be a position in a portfolio where that's my short position versus long in other places >> carter? >> it's messy. so, the first thing is yes, it's doubled, but what we know, think about the epic plunge. on the covid low, this stock dropped from 450 to 80 dropping 80% is series business. now we're midway back. i think it's a pair of 2s. >> meaning it's not good. >> not a good hand to bet big on. >> much more "options action" right after this

welcome back to "options action." investors loving mcdonald's stock lately shares continuing to hit all-time highs day after day, and with the fast food giant gearing up to report on tuesday, brian's laying out a way to bite into the name with options brian? >> mcdonald's is an interesting

name that free cash flow, big balance sheet are names i want to own if the market is going to continue higher here, and mcdonald's obviously had a big run. it's now getting a little bit stretched. i am getting concerned that stock like this can continue to run up through 300 we have earnings coming up i'm using options to play a call spread to play to the outside to continue that. looking at the 292.5/300 call spread, i can spend just a little bit under $3 for that max profit, about 5 bucks. so plague to the outside -- i'm not playing a call will see a 2.5% move after earnings this limits some of my risk to just basically the cost of the call spread, and i'm not so certain the stock moves through 300 by earnings given how well it's run to the outside. but i still want to play they hiked prices about 0% in 2022 that's been good

so analysts estimating a big boost in operating margin. that should be good for the stock. i expect the earnings to be bright, somewhat to the upside those mcflurries i go ahead for my kids, starting to feel it here it's about 5 bucks for one in the chicagoland area still expensive. but i think the stock can move higher >> i would venture this is not in the holly index, but what are your thoughts on the trade? >> it most certainly is not. i was mentioning to carter, if i go to mcdonald's, i need to hide it from her. that's not the kind of thing she appreciates in my diet one bit compare this company to microsoft. you got two companies reporting next week. both are going to earn 10.5, 11 bucks for next year, trading at a similar multiple the difference is one has grown four times over the last ten years, one has grown two times

the valuation of mcdonald's is toward the upper end of the range, although they are doing good things with their app and their franchising efforts. they really have been executing, but it does seem rich valuation wise. >> yeah. what does the chart look like? >> we talked earlier about hiding wrappers from sausage mcmuffin and eggs and things like this. but any way, to mcdonald's itself, the chart, the temptation i think -- and to some extent we heard why, maybe it's a little overdone but it's one thing when an individual stock is overdone, but the group is so strong yum is making new 52-week highs, darden, chipotle this is an important circumstance on the screen here, switching subjects, mcdonald's has lagged something like domino's. domino's is up triple what mcdonald's is. mcdonald's, since its ipo, this is one of the steadiest

performers in the busy only real drawdown was in the financial crisis my hunch is to actually stay long mcdonald's. >> do you have a drawer where you put these wrappers or take the stuff in your briefcase out of the house and dump it around the corner? >> this conversation was like, if you just happened to did a drive in and then your wife just happened to get into the car, there might be a wrapper, in which case you'd be like, i don't know how that got in here. >> must have been one of the kids >> yeah, must have been one of the kids. >> let's switch before anybody gets in trouble. on the other side of the spectrum, you're looking at pizza instead of burgers you're looking at domino's. >> domino's -- pizza has been under pressure, papa john's, domino's this it's reciprocal this is a restaurant stock to be short. >> oh to be short. it's hard to hide a pizza box, brian. what do you think, though, of the trade?

>> yeah, i think, you know, for two reasons. obviously domino's looks like it has some, you know, decline, topping out process in the charts that carter laid out, and so this is why i think if you're playing sort of -- we talked about a long short trade here. i think long on mcdonald's call spread, right, against sort of a domino's, maybe you want to put on a put spread against that, would be sort of an interesting trade. net-net, you have a neutral position on it, but i'm sort of playing two areas where maybe one is overextended, the other is not, and i'm only risking the value of those spreads, so that's a great way to play options when i'm looking. >> quick, mike >> pizza is topping? is that what i'm talking about i'll say one quick thing about domino's they have grown their earnings four times over the last ten years, so double the growth rate of mcdonald's, and it's trading at 24 times.

but that chart does look trouble. >> up next, the name that's dominated this week's conversation -- tesla. the big drop in shares and what is next for the oc flistksalng margins and falling profits. "options action" back in two

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wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. welcome back to "options action." share of tesla drop hard after the ev maker reported results wednesday. last week, mike laid out a trade anticipating just that, just maybe not that quickly with all the news about tesla, what are you doing now, mike >> this is a situation where i think you could take some profits women shorted a call spread for 40% of the distance between the strikes. there's not a lot of premium luck in that thing the distance relationship nothing to get excited about i think tesla continues to operate well despite the pressures the whole industry is

facing it's a superstorm especially with the increase in rates, and they are continuing to grow, but they still trade -- even at this level, at a high multiple, and i think that's really the thing that's going to be the biggest head wind for them. >> yeah, for those of you out there who didn't see fast, carter, you did go through the charts, and the next level you see is still lower from here. >> right so, we know that you get big movement typically in response to the news. fda approval, not the case here. tesla gapped up on the 25th, 26th of january in response to a good earnings report and gapped down now in response to a good one. i expect the gap from late january is filled and it's coming to play around 146. >> yeah. brian, roll you put on a trade to that effect, on a bet of it going to the 140s? >> i think first in mike's trade covering some of that short position made sense. i think it's got to move big here it's going to refill and go back up and break back above 170 or it's got more downside to go

we own this for client bus i'm getting nervous. if i'm going to put on a trade like you asked, i'm buying a put to protect some of my long positions. tesla, it's a big holding in the nasdaq 100, so if i'm going to protect that stock, i'm going look at a 160, 155 put maybe throughout the summer time to stay protected the auto industry in general is starting to get volatile and shaky. >> yep up next, final call. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. the first time your sales reached 100k with godaddy

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good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. welcome back to "options action." tile now for the final call. carter braxton worth. >> amazon a laggard but showing interesting day-to-day relative strength i'm a buyer. >> brian stutland? >> hide those wrappers but buy the call spread in mcdonald's. >> now the cat's out of the bag. assuming the spouses wind chill the show mike >> hopefully she's taking sam to lacrosse practice right now, so

he's not paying any attention to this i do hide the wrappers but i will tell you, implied volatility for s&p options is exceptionally cheap going into next week. you can hedge some of the earnings >> your hips don't lie, though that does it for uons starts right knew. my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm trying to make you friends my job is not just to entertain but to educate and teach you call me or tweet me ge gently @jimcramer. if you want to know why the market is so darn confusing and overwhelming, next week is a

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