right now, the tech earnings parade set to roll on with two of the top titans reporting next week, apple and amazon where do option traders think the shares will go from here we'll debate that. plus, bud's big blunder. floundering in the wake of the big bud light controversy. can things get worse from here plus, a look back at alphabet's red letter week. uber's summer surge ahead of earnings and mining the industrial action in m 3m. i'm melissa lee. thcht is "options action."

we begin with another monster week of earnings caterpillar and uber and airbnb to pharma and merck and pfizer we get the two tech titans and amazon surging higher this year. 50% and they gained more than 57%. carter, what is going on with you? what are they saying about this company? >> this is based on operating results. but there are a few key moments in the chart look first at a relative charred. apple, this is the tech sector and what we know is that apple's performance peaked in the third quarter last year. so ten months later, here we are. and we're down that is verse all the other choices in the sector that we're

on this trend line which bounced five, six times. it almost needs to bounce here an undercut of this would be quite fatal. you can't outperform your group for the last ten months, what's going to cause it from here? look at the chart of apple itself the first of several does it break trend? put in the 150-day moving average. how far above that moving average are we take a look at the final chart it is also with the 100-day moving average you sue here going back over the past five years this is one of the steepest readings reported i myself want to save this be careful with it take measures if you're wrong. f. not done well, remarkably,

despite that stair way compared to other choices in the tech sector >> all right so, bryan, you got a trade here on apple >> i do. we have earnings next week there is a big event coming up i'm going to minimize some of my risk and denounce that so i'm looking at basically buying in october put options. 190 strike specifically. and it expired just after earnings, the 185 put. i think the 185 area is a level that, hey, if i get hit on that and i'm back in the stock or i have to add more down there, i'm okay with it far enough to the down side. apple, basically, options are reporting a 4% to 5% move after earnings am i'm really counting on this put that i'm going to use sort of to hedge against my stock position and here's -- obviously, you see the chart. you see the potential underperformance relative to the

pressures that apriple is undergoing it allows to do that if it doesn't, there is down side risk. when you look at p aapple, it's 7.5% weighting i benefited from owning apple. now i own more apple in my portfolio, more than that 7 1/2% the. this is a way to reduce exposure to apple i don't have to get called away from the stock i reduce my exposure like we did in option trading and get to participate if the stock moves higher i reduce and protect my down side here. that's what i'm trying to do just control risk in apple look for cheap options i think they are in october. and sort of a hedge in that portfolio. >> what would you do with apple, mike >> yeah. i think i like the trade upper end of the historical valuation over the last 15 to 20 years at 32 times. they do have exposure to china which is a risk that think in

all this goldilocks talk hasn't been discussed very much the top line is not growing. i don't expect it to i think consumers are a little under pressure here. and i think they talk about that coming out expensive as well i think hedging makes a lot of sense. >> let's move to big ka cahoona number two, amazon take it away >> yeah. this is an interesting case here first of all, it is not back to those recent high that's we saw. i think that if we are kind of envisioning as i said a couple weeks ago that it sort of felt like the market is being drawn to these all-time highs, amazon is a little away from that now, it's difficult to talk about valuation with amazon. people have always used propriety metrics. this company hasn't really made that much money all things considered

people talk about the growth merchandise values and they often talk about the valuation. that is actually a 20-year low in terms of valuation. if that happens to be a preferred metric, i don't know that is the metric to think about as a trade i think it calls for that. the option market is trying to move a little over 6%. you could buy a call spread going up to september for 6% of the current stock price. buying the 130 calls and selling at 147 1/2 being i'm comfortable selling those because, you know, with some of the skepticism that i previously expressed once we -- if we retest the highs, i have a feeling we're going to have a real bit of difficulty trying to achieve them >> the circumstance is it's a

real lagered first is a comparative chart and just looking at amazon versus the qqq. it starts in summer of 2019. re we ran up, of course. amazon is much more than the qqq. now it is having caught up a bit, does it have more of that let's look at the next effort. amazon with no lines, no drawing. the key here is amazon bottoms much later than the market market is in october amazon in december or january. that's the same chart. we have converging trend lines you can see they bounce to the penny quite nicely off the line from the low the question is now do we as implied by that up arrow, do we break above this down trend line in effect since the market's

peak overall equity peak in december 2021? i think we do. much. >> all right i think the charts are lining up when you look at the earnings next week, analysts are basically expecting aws to be a little softer. i think that's why the stock is lagging the qqqs, for example. i think the consumer discretionary, the amazon site itself, that is going to show an uptick that is what is going to take the stock to the upside. for me, $140 not out of the cards. >> all right well, can investors read anything from a third tech giant that reported already this week? that is alphabet they beat on the top and bottom line thanks to strong youtube numbers. the stock up 10% mike, bullish going into the report, what do you makeof the numbers? what are you doing from here >> yeah. so we talked about this last

week if you own the stock, you stick it with it here. the earnings nobody beat by 8 1/2% everything i think we believe is true last week remains true this week you know, it was cheap then and actually net of the increase in earnings at this point the valuation essentially is unchanged even though the stock is higher. i would stick with it. for those that don't own it, you know, you now have the benefit of having a solid earnings quarter behind you so i don't think that you should feel like you're chasing if you buy here >> carter, do you conquer? >> yes such a good word, isn't it yes and no here's my thinking we actually had a note on google and update for monday's report and it made the case to sell the august 140 calls what we know, take a look at this chart here's google. look at the next iteration

it is far above the 150 day, 25%, as it was below in october/september. can y you can only go so far in principle before you have reversion. of i would trim a little bit i would sell 40 calls. i would take some measures >> bryan, where do you stand are you with mike or would you trim like carter says? >> i would continue to own the stock. i idea of selling that 140 call to carter's point. it maybe reached the upside. so maybe an august call. perfect. short term expiration. collect a little premium continue to own the stock. you look it he stock the valuation is compelling to the up side. we have names like microsoft, amazon, meta, they're all actually in large cap value s&p 500 index. google is not. alphabet is not. that's one stock i would add to a value play relative to the

other names. so that is a stock we like owning sort of replacement for all communication services and then the advertising kicker we love google >> all right still to come, shares of bud have been a dud since the spring when sales of the once top ranked bud light started to tank over the last month, the stock started to make a comeback will earnings help them tap in new investors? and for everything options action, check out our website and newsletter more oa right after this

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it is late july. when it's as hot as it is in new york, you may find yourself reaching for a cold one. lately, the controversy surrounding bud light is taking a toll on sales and the stock. it's down 10%. but then the tide is starting to turn bud gets set to report on wednesday. mike is cracking this one open for his call to action mike >> you know, it's interesting. i was taking a look at the last year of ownership in our long only strategy. one of the longest hold ings we've had is constellation brands constellation brands is the net beneficiary of the controversy that they have been facing since the beginning of the second quarter. but that spread, that performance spread between these

two stocks is really remarkable. we're talking about 32% outperformance for constellation relative to bud. and actually, if you go back ten years, you're looking at, you know, a company that is essentially trading at the same valuation, about overall about $200 billion i think that we might be getting some, you know, potential upside here you know, at some point this is going to break and bud light is not their only product. i'm not going to say that they're completely out of the woods here i think that we're about to find out, essentially, how much damage has been done we haven't really seen or heard the impact we haven't had an earnings quarter where enough of that has been available for us to find out. but i'm inclined to make a bet here because i can use options what is interesting is that options premiums are not re reflecting a great deal of volatility they're trading at two year lows i'm looking at a short dated call spread. this is the one i'm taking a look at.

you can spend about $1.40 or so for that if the news turns out to be better than expected, you know, i think that's a way to play this to the upside there's a lot of bad news into it we've seen that over the last three, four months. >> what did the tech news say? >> look, you know that, thing you started with, bud is a dud that sort of -- question is, is it so bad it's good? is it such a dud that it's worth playing? i think that is the circumstance look at two identical charts the first is to put into perspective. this stock peaked in 2016 in the autumn you know, you're talking about half a decade or more ago. but it's been trying ever since to get back on the horse let's look at the same chart you put trend lines in what do we know? we know it is flirting with moving above that down trend line i think you do it. i'm a buyer. >> all right where do you stand, brian?

>> yeah. i mean given the branding controversy around it, options are cheap. that's the way to play there is serious down side risk. it's like trying to catch a falling knife. you use a call spread to play the upside, very cheap as mike said with options. use a call spread to play the upside maybe get the bounce back turn around and then upside potential there. >> all right let's switch gears uber is set to report before the bell on tuesday. the ride sharing stock hitting a new 52-week high today it has been a hot summer for the stock, up nearly 60% since the start of may what do you do >> with earnings coming up, i'll i'm trying to play that earnings play i'm using near term at the money, selling it out of the money. i'm looking specifically at the 47.5% strike call. selling $54. i reason i pick that, that is a price target off of a head and shoulders bottom pat thaern is happ the -- pattern that's the price target i

expect this stock can move on earnings. we've seen it move 6%, 7% after earnings that puts me at the break even point here so we get one look at earnings next week. so this is a short-term bet that we're trying to make basic will i a 2 to 1 for my money. people are paying $2,000 for taylor swift concerts. they're okay spending extra on uber i think that's what we'll see in the earnings report and things will play the upside play the consumer discretionary turn around we've seen in the last couple months >> carter? what do you see? >> i'm with you on this. it's a great chart i think there is testament to momentum and relative to strength i would point out maybe s something that is more important. this stock ipo'd at $45 a share and dropped to $42 much the worst one day u.s.

dollar loss in history of any stock on the ipo an here we are at $48. we're just getting back into the green from the ipo i think you play this and you play it with confidence. >> mike? would you play it with confidence >> interestingly, when you have a call spread, you're able to play it even if you're not that confident. i think that's kind of the idea here the market definitely seems to have momentum. i don't think we're completely out of the woods despite all the relatively cheery news we got i think there may be other shoes to drop. the wind is at our back if it we take a look at it in terms of long equity. we have seen, research has shown, selling a lot of premium going into earnings is not necessarily a great idea, particularly in the stocks that move a lot like uber does. i think a call is the right way to play this >> brian >> yeah. i will will call it a lot. but i think educated to the

upside if i have this play around thing, i think it's an educated fwhaet has a likely payout of that 2-1 playout playing to the upside that is. >> all right up next, we will line into a trade that mike put on in a struggling dow component "oio, your tweets are still ahd. ptns action" will be right back you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] 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℠.

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essentially you're playing with house money. but, of course, the interesting thing is i would stick with options if you're inclined to continue to play upside in 3m here the reason for that is although the earnings result is very, good you know, we did get news about the chemical and we have things that are not inclined to go along with the settlement that provides a overhang for companies like 3m for quite some time >> your take on 3m now, carter >> i published a note as a follow up to the buy 3m note saying probably right to take it >> all right >> up next, your tweets and the final call 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?

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health care back time to take tweets. our first is the trade was crazy. i got lucky and sold the spread for a small profit what is the best way to manage a trade like that in the future?

brian, what is your take here? >> yeah. i think when you have a little bit of profit, you take it off when something gets volatile as that, they're going to stimulate private companies inside fsi what is it all private chinese companies. the stock popped i look to play indy in india i think the back half of the area, that is an emerging part of the market that will outperform >> does caterpillar look like a good call play spread for august mike what do you say? >> earnings on tuesday 4% implied move. it looks like this is a crk cria junk tour -- juncture. >> what do you think of cat's chart? >> i think you get the breakdown. >> all right let's get to one more tweet here this one asks, any thoughts on las vegas sands at current levels for a short term trade?

what does the chart look like, carter >> you know sh it is a pair of twos i say look at the s&p 500 casino and gaming subindustry group which has caesars and wynn and mgm. it is lagging compared to the peers. the i would bet against volatility here. >> mike, what do you think of lds? >> yeah. i mean, i like lvs like the gaming stocks generally. this one and wynn as well. so i like them on the long side. >> yeah. brian, you were talking about taylor swift tickets win on hay jackpot or poker table here >> i know. that all goes together i think there is upside here for lvs as a consumer discretionary shows resilience in the back half of the year >> all right let's get to it. the final trade on this friday last call from the options pit carter what do you say? >> the two big cahoonas, i'd be feeding apple and buying it.

>> brian >> yeah. a great show lots of earnings next week i'm going to play uber play the upside. >> mike? >> want to play the controversy in bud, use a call spread. that's the bud for you >> that does it for us back welcome to a special friday afternoon of text check. today the earnings deluge. tech companies doing mostly better than feared plus, a look at dealmaking and m&a activity and why partnership might be the key word in both media and tax. meta meta shares up 107% this year