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welcome back. everyone is worried about the magnificent seven. mike, you still see some uncertainty into it. what are you seeing? >> this is another holding of ours. interesting situation. you've got two stories going on, if you are just took a look at the stock's performance you would say, it's been pretty positive. up more than 35% off that enter year lows. but probably 30% up over the all-time highs. they are trading about 34 times earnings. whether that is expensive or cheap depends on how they manage to deliver over the the

course of the next 12 to 18 months. why is that? this is a company that has doubled their eps over the last two years. if you can keep up that growth rate, then it definitely justifies a turn of 34 times. most of the trade is expecting them to reach margins of 20%. they have not managed to achieve that over the last 10 years. there is good growth on the top line and even better growth on the eps. what is interesting to me is that the options market is not implying a very big move on earnings. given the preceding week and i multiple name, i think that sets up an opportunity for us with about 4% to four and half percent move. i was looking out to october. quick thing to think about with intuit, i was looking at the

500- 550 call spread. relate that to the nearly $500 share price and you ecognize that is about 3% of the current stock price. that is really the idea here. i'm risking less than that in the event that this thing can really catch some momentum and they deliver on this expectation and deliver the eps growth and margins a lot of people are expecting. >> when we look at the chart of intuit, it looks like the trend is heading in the right direction. what do you think? >> i'm here, sorry. i hit my mute button. here we go. identical charts, weekly bar charts. first, no lines, no drawings or judgment. what do we have?

in the second iteration we have a well-defined line over the last year and we are in the middle of the hannel. another way, conversion trend lines. i like it going into the earnings. >> all right, brian, salesforce is also having a nice run. you are looking to keep your head in this cloud heard how are you going to do this? >> salesforce, think of it as more of the tech kind of name. but actually it is in the top 50 weightings in large-cap value. it has a value placed to the tech side of things. and that play has worked out really well. especially in the mega cap type value names. i want to continue to play this to the upside. we got news that the ceo is selling 3 million shares or so of stock. that's a little concerning that he is doing that with earnings

coming up. i'm a little nervous but i think it is pulled back enough to a level, so one way to do it is maybe use a call spread on this pullback in the stock to get some additional exposure. i'm trying not to risk a whole lot here heard it is a weekly option in september. after labor day it will play threw the earnings play, find the 200 strike call, selling 220 strike call. basically a 10% wide call spread. what i'm only outing 8 1/4. i only needed to get to that 208 level two breakeven. that i have upside all the ay up to 220. so i'm willing to get called away and physically risk a little, add a little to my position. i think valuations and stock are backup significantly. it might be the time to add.

>> mike, what is your take? >> valuation, kind of interesting thing. if you take a look at the full year ending in january of 2025, that is nine dollars a share. that will be 22 times earnings. that tricky bit with salesforce, is that a lot of the upside ends up being deluded by employee stock compensation. that has certainly been the case with salesforce. if you start getting the bottom- line delivered to cheryl hurd those shareholders, that will have an interesting value. but i might be selling shares going into the trend. that might be a reason to use an options trade. >> carter, what you see in the charts? >> let's do it again. three identical charts. the first, you will see there

are no lines or conclusions and my hunch is you will see a resolution. the upside, let's put some in. we know we've been well defined. the selloff leads us to a penny at the lower end. and the third and final chart, the moving average. this is a weakness to take advantage of. a selloff that is an opportunity. next, how should you manage your position? we will bring you a trade update, that is next. options action is back in two.

welcome back to options action. last week mike laid out a way to play gears before earnings. so, mike, how are you handling the drop? >> we own the stock unlike the trade we highlighted. it's unfortunate because the options trade essentially lost all of its value. so for those

that are in the options trade i don't think there is a whole lot to do here. the stock obviously has fallen quite sharply. there was some measure of support, i thought, around those late june, early july level lows. but i think it looks like we might be violating that. my thinking on the long-term equity, i will admit we are considering pairing at this point. >> obviously we see that the dow moved today. >> this heavy line turn in the gap was supposed to be a thrust and a breakout. whether it is fundamental or technical, it is to have a conclusion. and it's the exact opposite, walk away. this is a very bad action of the 500 stock s&p. this was

number 499 today. that is not good. >> that is rough if you are holding it long. >> it is in a weird spot. i don't consider it value. and it is not quite growth rate it is sort of in between. you miss the numbers and see how hard the stock has been hit. walk away and see if it falls a little further before we can pick up decent value. >> fair enough. coming up next, questions and the final call. options action is brought to you by think or swim and ameritrade.

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℠. welcome back to options action. our first fan asks, how best to play it considering the high options premiums? >> they really are the top three nasdaq names that fall into our

top 20. i still like it even though it's obviously pretty iffy. but one option is to buy a down slide quick spread. i pay little premium, pay some downside protection. and i will be turned away. >> wild move. no next fan has a question about a t trade. are you still in the $100 december 15 call? >> i have the parks calls myself. we talked about the december expiration. one of the things i've done when they took the small bump up, i sold the ones that expired today. to help sort of offset the relatively minimal decay. i will rapidly role that call

strike down and get into another on the calendar spread. >> our last question. what is up with pfizer? >> it's been the big heavy and now it is the dog. 200 billion versus nearly over 500. it's become a value play aura value trap. my hunch is to own it. but so far, that is not working. the stock, interestingly, right now is the same price it was in 1980. >> that is pretty surprising. final call. carter, you get to start. >> the cell on dips to 5% is nothing. it's roughly on the downside. don't ask why. >> there might be selling in the general market but dick's

is the place to be. >> mike, close us out. >> call spread on reversal and kohl's earns the earning. >> that is it for options action. (announcer) the following is a paid presentation furnished by rare collectibles tv, llc. (announcer) after an unexpected hiatus in 2022, morgan and peace silver dollars are finally back in 2023 and you are first in line for rare collectible tv's special presale offer. the silver dollar is the ultimate american collectors coin and the two most popular silver dollar designs are the morgan silver dollar designed by