right now on "o.a.", a big week for tech. nasdaq gains over 3%. titans roar higher, an old favorite, dell. up over 21% today. are options traders betting this rally has trades? we'll debate. plus, charting crudes climb. carter here to tell us if there's still time to profit in the energy patch. later, cleanup in aisle 8 with

clorox, processing hormel. live from the nasdaq market site on the desk tonight we have mike khouw, carter worth, and brian stutland. we start with that seemingly unstoppable tech run. despite a flat finish today it was a big week for the nasdaq as the group leads the market out of the summer doll drums and into what could be a summer to remember. apple breaking out. google hitting 52-week highs and nvidia up 230% for the year. can the technololg cal advances keep up the momentum? carter, over to you. >> before we get to the charts of course, it's so many ways if you will to look at tech, right? the xlk is the actual tech sock to have mirroring the standard and poor's sector. if one looks at the qs, microsoft and apple have a different weighting versus what

they have in the xlk. expands software tech etf where there is no apple. apple underperforms almost 11 months, the tech sector, which is an incredible thing. let's look at a few charts to try to figure it out together. here, a table to make the point. expanded tech software, over the past four months up 23%. qqq and xlk meaningfully behind. that's a function of the wa weightings. biggest weighting is adobe. underperforming because of apple and microsoft's dominance. now because apple be microsoft have been laggards, this is starting to turn. we actually like igv versus qqq

or xlk. let's look at two charts to make the point a different way. here's the xlk. we know we return to the former high, and we're sort of at that high. by counterdistinction, look at igv, whose biggest constituent is adobe, and we're nowhere near the highs. playing igv, for a catchup, absolute, i like it, but relative to qqqoxlk. >> very interesting there. mike, you've made cuts to nvidia exposure, taking profits? what a run that one's had. >> we held 130 different securities in our long only event driven port fofolio sincee beginning of the year, and nvidia in top 5% of earnings. we pared it off the pop and when it fell back below the prior day's close, we held off.

we did reduce our position this week. we've reduced the position in nvidia 80% from ten days ago. this is not a knock on nvidia. i wouldn't get short the stock. but it has a tremendous run. very high beta. and the question is, what is over the course of the next 06 days or so going to propel it higher? feels like you're taking excess essentially market risk before we get new news out of it. we have 300 plus percent year on year growth. spectacular. but i think some of these really high-flying names, you're probably taking more beta risk than you need to if you've already gotten good news out of them. adobe, we own that one. that's some of the better performers on the year. >> interesting. if charters charts play out. brian, what you are your thoughts on what we've seen from

tech, that run in that group? >> carter makes a great point out of the igv. it scalps out of that component of the qqqs that is really nonartificial intelligence related, and so many of the software names in there have that a.i. play. that's what's drechiven the mar. when nasdaq turned and tech turned it's been an a.i. sales psych that's dreiven it higher. we talked about buying a put spread in the qqqs to hedge that position. these types of trades are low cost. get to participate in the upside. don't get out of the market and miss the wild runs we've seen in this last week on a handful of names i know mike is trimming his position in nvidia. i'd do that with a put spread rather than outright sell. may not be in constraint for compliance, but if i had my own book to trade, that's one area i'd look to do.

i want to stay very a.i. related. i think there's still more to go. we're still in the early stages. if the market bottomed out and august sell-off is over and we're moving to the upside, i'm going by put spreads, put on a hedge, continue to participate in igv, maybe couple that with semiconductor names. i would do that to play to the upside of the market because i think that's where the momentum is. >> okay. brian, i understand you're laying out a trade on a name that had a huge surge today. what are you seeing? what's the play? >> speaking of a.i., you look at dell, and the one thing that came out of the earnings call there was the words a.i., and their server integration with artificial intelligence and demand for those types of servers, and that's where they saw their growth. this is a company that falls basically in a large cap tech play yet it's got this a.i. play to it. i think that's why you saw the stock take off just based on

underperformance related to the rest of technology and the rest of the a.i. play. look there, you look at 8% sequential growth. i think we're going to see analysts continue to upgrade stock similar to what analyst with salesforce. we'll talk about that maybe later on in the show. i think it's poised to move to the upside. it's on definitely its upper end channel when you look at some of the charts. that's why i would be looking to sell a put. if i get put to the stock a little lower by selling a put, i'm going to pick a level -- i think the stock hangs in there. i'm looking out to october here. the premiums are juicy, almost 2% of the value of the stock. gives me a break even of 63.85. if you analyze this out over a year, this premium is juicy given the earnings event is

over. i'm okay with earning it. it's going to stay above the $65 level. >> interesting trade on a name that really moved a lot today, up 21% in the session, at least for pure equity. let's move to another hot area, energy. crude oil pumping past the broader market. if you're trying to get in on this energy move the traders have a way to play the group. carter let's start with the technicals. >> let's start with the commodity and we'll move from there. generally speaking i think you want to be exposed. we have it overweight along with health care but let's look. wti, the first chart you'll see when it comes up on the screen is a well defined bottoming out formation, a bearish to bullish reversal buy. left for dead just two or three months ago at 65. consensus was concession, we're going lower, china won't help, and now of course something all together different. i think you're going to head to 09. you can draw the lines this way

or draw them as you'll see in the next it ration depicting a well defined downtrend line which we moved above. let's look at oih, the drillers. this is a very sort of important area within energy, and you'll see here coming up how the charts are sort of -- welsh this is xle. excuse me. i was thinking oih. xle, no lines, no drawings. look at the next it ration. look how precise these trend lines are, the word or phrase, "to the penny" comes to mind. you can see literally to the penny xle bounced over and over off the trend line and now converging trend lines breaking out. i think you want to be long xle and oih. >> interesting stuff. mike, what's the trade? >> xle is going to be heavily

related to crude. xle up i think a little over 17% over the time frame. this whole group, this etf is going to behave. the energy select sector index tends to behave like integrated oil. not surprising when you consider its two largest constituents are integrated. i'm talking exxon and chevron. when you take a look at all the constituents you're getting experson to the space. there's a 09% correlation with integrated names when you take a look at xle. it's interesting because also looking at this index it's relatively cheap. probably trading around eight times earnings. these companies have become much more capital efficient, and of course what we're seeing recently is we are getting a little bit of a surprise supply gap. i think carter was alluding to that. the sense was we were going to get glut. yet when we take a look at curbing for example, the amount that's available in stores is

lower than people anticipated. you couple that with saudi production cuts and so on, and this essentially remains pullish. that long with maybe better than expected economic data by some at least, again, points to the upside. i'm taking a look at an options trade, not one we talk about that often, an in the money call spread. i was look out to october, the 86/96 call spread. when i was looking at this, xle was trading around 91 or so, so pretty much dead middle of this call spread. what you're going to notice essentially is this is a way to essentially get long exposure with slightly less risk and no decay. because essentially the extrinsic premium is equivalent to the premium on the in the money call, the 86 strike that you're buying. on a standstill basis you'll neither make nor lose, you'll have exposure of five bucks to

the upside, risk of five bucks to the downside. if things tick up in term of volatility, you've defined that risk. this is a attractive way to play it. one other quick point, that higher strike is just about near the highs we saw in xle a while ago. if anything i would expect that maybe we would pause there before going ultimately higher still. >> okay, it is a trade we will follow. we'll see what ends up happening there. still to come, clean eating and a clean kitchen. how two staple stocks are heading in different directions. and for everything "options action" check out our website and newsletter. there's more after this.

. welcome back to "options action." this may not sound like an interv investing tip, but wash your hands and don't eat cheap. the traders' advice may have you skipping the spam and going on a cleaning bing. let's start with hormel. >> sure. we can get right to the charts. a very steady business. majority shareholder. owns 46%. they run the company for long-term results. you can see here, going back since 1980, hormel almost quadrupled the performance of the s&p. but of late, hormel is on the

ropes. if you look at where we are now trading in relation to the uptrend line, in effect since the financial crisis low, we're toying with the prospects of breaking trend. you can see we tried to break out and failed, and i think we're going to break to the downside. unhappy fundamentals this week, earnings were light, but final chart, take a look at relative performance here. this is, again, having outperformed the market to such an extent. but relative to its peers, the xlp, to proctor and clorox and coke and pep and i colgate -- hormel, hrl, if you own it, take measures. >> mike, what's the trade on hormel? >> carter started hitting on it.

fundamentals weren't a reason to affect a trade one way or another. we like a when funmentles align with our thesis. when they announced earning were not so great. their international segment was particularly weak. they were trying to do things. they package meats and things like that. they have exposure to commodity volatility, and it's not particularly cheap. probably trading 25 times earnings or so, and this is not for growth that you are paying those kinds of multiples. you can probably find better valuations elsewhere. i was taking a look, out to october, $2 put spread was what i was looking at. that was going to cost about a quarter of the distance between the two strikes. might have gone higher because at this time stock weakened slightly. this is a way you can use a small amount to make a bearish bet going forward for two

months. >> brian, what's your take on mike's trade? >> i like the trade. the premiums are fairly cheap, and the fact is people's diets are changing. that's probably the reason hormel isn't going anywhere. people are getting smarter and healthier about what they're eating and i'd like to own other consumer staples. this is a great put spread. >> let's move to the other side of the aisle. clorox up 11% this year, still underperforming the broader market. could there be more room to run in this one? >> obviously, an entirely different consumer staple, very specific and dedicated business. but let's go right to the charts. my thinking is you want to be long clorox. first a relative chart. you see that spike in, what, 2020. clorox performance relative to other tastaples surges because covid, and ever since then it

has collapsed. the bottom chart has all the look of a bearish to bullish reversal, but now let's look at clx itself. we know it drops 50 % from its peak. that's the worst of almost all staples. yet that same chart you can draw the lines another way. and you'll see it here, it has all the look and feel of a important bottoming out. you can call it a cup and handle, but it's what a reversal formation looks like. everyone wants to be long clorox just as everyone wants to be lighter or short hormel. >> mike, what do you make of this? >> just talking about fundamentals here, the interesting thing about clorox is this is -- their product is a commodity. so bleach. granted it's name brand. this also not a real area of growth. this also accompanied this trade

around 24 times earnings. again, when you think the s&p is tradeing 21 times do i want a company that's trading 24 and not growing? hard to get behind it fundamentally, but perhaps brian's got a way to play wit options that takes care a that risk. >> >> brian, what do you make of this one >> p.e. is high so valuation is tough, but it looks like there is a chance for the upsite here. options are cheapening up. i would buy around the 155 strike call. play the upside. maybe out the october, november, december with options and roll those out and stay with that upside. >> i like the smell of bleach. make mess feel like things are nice and clean. up next, we're checking in on brian's salesforce trade. how is that faring aerft earnings? don't go anywhere, "options action" back in two.

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

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." two week back brian laid out a way to play salesforce. sales popped. you're in the green. how are you managing it now? >> this is about to expire. great winner for us. a simple way to close this trade out and be done with this and realize all the gains from it would be to buy the 220 put. i'd look to buy that below 150 dids and close it out. we have i read 25 analysts upgrade this stock. this is a nice winner. you want to look to close it out, buy the put, and be done with it. crm, great earnings. i think there will be opportunity to buy it back but this is a stock that's looking more be more to the upsite. >> good job on a nice trade. up next, answers to questions and the final call. ptnsctn"s ckn two.

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. 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." time to take questions. next fan asks, the tlt's next move, up or down the next three months. brian? >> i think up to sideways tlt could hang in on that level and for that i'd be biwriting or selling downside puts. >> our next fan asks, 3m, has the beaten down stock had enough? i think so. how would you play if you were inclined to go long? >> wow, catching the falling knife or litigation risk depending how you look at it. options prices in november are elevated. i'd be a seller of those and buy longer dated calls financed by that sale. i don't think it's going to move on earning, it's going to move on lawsuits. >> does it make sense to buy

leaps in dollar general or general mills? >> let's stick with 3m. if you were to look at the december 2025 leaps, that's more than two years now, stocks closed at 107 and 110 calls are trading around 16, so 126 is your break even. got two years to go up 17%. it was trading 126 at the beginning of the year. i think that's what you do. >> okay, now time for the final call. carter, you get to start us off. >> energy and all things related. xle, oih, wti all on the long side. >> brian? >> yeah, i'm looking to sell some premium in this market and dell is one of those places so looking to sell the october 65 put in dell. >> okay, and mike, you get to take the last one. what's your final trade? >> yeah, i think energy has certainly more room to the upside, and one way you can look to play that is by using in the money call spreads. that's a way to offset the

extrinsic premium. >> energy has been a hot topic all over the air waves. that does it for "options action." a special series "mad money back to school with jim cramer" starts right now. have a good long weekend. my mission is simple, to making money. i am here to level the playing field for all investors. i promise to help you find. mad money, starts now. >> welcome to mad money. i am just trying to help you make some money. my job is not just to entertain but to teach you. call me at the number on the screen. there is a gaping hole in the american education syste