Carter Worth And Mike Khouw's Sherwin-Williams Trade

On CNBC's "Options Action," Carter Worth spoke about Sherwin-Williams Co SHW.

He said it's one of the best-performing stocks in the market, regardless of its line of business and it has significantly outperformed both NASDAQ and the S&P 500 since 1985. Worth added that the homebuilding sector acts well and Sherwin-Williams is the best performing stock in the long term. It's not a homebuilder, but it's better because it doesn't have the cyclicality, explained Worth. He also showed a bullish wedge pattern on its chart and he concluded the stock is breaking out on the upside.

Mike Khouw suggested that traders should consider buying the September $620/$680 call spread in Sherwin-Williams for $20. The trade breaks even at $640 or 3.22% above the closing price on Friday. If the stock jumps to $680 or higher, the trade is going to reach its maximal profit of $40.

Posted In: Carter WorthCNBCMike KhouwOptions ActionOptionsMarketsMedia