what's coming up on the show ♪ >> banking on a breakout the financials were on fire this week to tony zhangas the one name you could play to cash in. plus, mike khouw has a way to take some protection on the cheap. and do the dog days of summer have your feeling tired, rundown and listless you're not alone the chartmaster is drilling down on the one sector running low on energy how you can play it for a jolt it's time to risk less and make more "options action" starts right now. >> it is friday. 2:30 out on the west coast let's get to it. it was a record week on wall street and a remarkable week for the federal reserve as well. the nasdaq and the s&p hitting fresh all-time highs with the dow turning positive for the year all this after the fed made a major policy shift essentially saying they're going to allow inflation to kind offe run hotte than normal to help the market tony zhang says there's only one stock that could be a big winner from this. who is it? >> i want to take a look at morgan stanley because of this tick pickup in rates on the long end of the curve it's one of the stronges

tony zhang says there's one stock that could surge higher on rulg results. tony, what are you looking at >> i'm looking at cisco. just like john deere, it's one of those names in the tech community that's not on most investors' radars because it's not one of the f.a.a.n.g. names, but cisco is the backbone of the internet hardware business and it currently trades at a very reasonable valuation, just like john deere. and it's recently made strategic acquisitions here in the cloud security business. and i think that 2020 is going to be a turnaround year here for cisco, especially after underperforming so strongly over the last year. >> if you look at the chart here, it's not particularly interesting. it's actually had some pretty poor relative strength here over the past year, but as you can see, it's recently traded itself into a bit of a wedge here and moving averages starting to move higher here, i think the earnings catalyst here next week is what takes cisco to break out above this $48 level that it's currently trading just below if you couple that with th

plus, hold onto your hammers home depot already reported earnings but that's not stopping tony zhang from building a trade right now. "options action" starts right now. >>> it has been an electric year for tesla and its investors. bears have been, well, shocked the stock rallying again today it's up nearly 400% in 2020, pandemic be darned tesla's market cap now more than walmart. but the chart master says it may be time to pump the brakes on this red hot auto maker. >> it's a phenom it's epic. but there are also sequencing patterns in any ascent or desce descent. the first chart, this is just an all data chart since the ipo back in 2010, it was exactly a decade ago, june, the summer of 2010 no judgments, annotations by me. take a look at the second chart. what i've tried to show here is the sequencing basically after the ipo in 2010 you have a dormant period where the stock between 2011 and 2012 doesn't do anything. then basically it goes on a 10 x move then sideways again and another 10 x move. take a look at the third chart now you can see where i've put those numbers in basically

we like it on the short side >> tony zhang?a continuation in the surge in gaming selling a put vertical spread in nvidia. >> mike khouw. >> it looks really exciting. i'm looking forward to it. october 2 nlnd xrt 50 strike put >> that does it for us here on "options action. we'll be back next friday. meantime, do not go anywhere summer school is back in session. >>> good evening i'm frank holland for those of you tuning in for jim cramer "mad money," don't worry, he'll be back money. we're taking your questions. this week's report card is just in for the major industries. the dow up and s&p and russell and nasdaq i want to welcome cnbc contributor and wealth management josh brown, known as my financial counsel

we like it on the short side >> tony zhang?he surge in gaming selling a put vertical spread in nvidia >> mike khouw. >> it looks really exciting. i'm looking forward to it. october 2nd xrt 50 strike put. >>> that does it for us here on "options action. we'll be back next friday. meantime, do not go anywhere "summer school" is back in session. - [woman] the following is a paid advertisement for the hoover smartwash pet automatic carpet cleaner. (upbeat music) real life is crazy messy especially on your carpets. whether it's kids, pets, or just plain heavy use your carpets get dirty, but cleaning them can be such a hassle, even painful. down on your hands and knees to spray and scrub or struggling with one of those bulky rental machines, up the stairs and all around your house. and did you ever wonder if the last person to use it even cleaned it up afterwards? what did they clean off their floors

welcome back to "options action," it's time to look back at some of our open trades last week, tony zhang depot were about to break out. >> earnings knocked down from the 20-day moving average a much better entry point for a long position in home depot, the october 2nd, weekly options, selling the 277 1/2, 262 1/2 put vertical here collecting about $5.90 for this 15-dollar wide credit spread. >> well, tony, you nailed it home depot is surging to new all time highs what are you doing with that trade now? >> so as i said, the pull back to the 20-day moving average, the stock has moved nicely off of that. however, this is a trade that's still in play. this is going out to the october 2nd expiration i'm holding on to this trade, looking for home depot to continue to rise over the next few weeks. >> let's move on congrats on that mike laid out a retail play heading into those earnings. >> the relative outperformance period, every time we have gotten to the trend line he has failed you can see the arrows i have drawn there. the bet is it's going to fail as a relative outperformer and start to f

. >> there's a lot of potential here >> tony zhang is networking together a way to play ahead of earnings