Mike Khouw And Carter Worth Are Both Bullish On Starbucks

On CNBC's Options Action, Carter Worth presented a case for a bullish trade in Starbucks Corporation SBUX.

He used technical analysis to show that most of the stocks in the casual dining sector managed to break out on the upside and now, he said, it's time for Starbucks to do the same.

Worth presented a weekly chart for the stock and showed that it has been trading in a range for quite some time. It finished last week slightly above the upper bound of the range, and Worth believes it is going to move significantly higher because the other stocks in the space followed the same pattern.

Mike Khouw, meanwhile, suggested an options strategy to make a bullish bet.

He would buy the February 85 call option for $2.20 and sell the February 90 call for $0.70, paying $1.50 for the call spread. The break-even for this trade is at $86.5 and maximal profit is $3.5.