Carter Worth And Mike Khouw's Wal-Mart Stores, Inc. Trade

Speaking on CNBC's Options Action, Carter Worth said that he sees an opportunity in Wal-Mart Stores, Inc. WMT because it has been an underperformer in comparison to the retail sector and the S&P 500 and because it pulled back to the pivot point from which it broke out in late 2014. Worth explained that when the stock breaks out and pulls back to the break out line, there is a high probability that it is going to rebound. He added that Wal-Mart Stores, Inc. is a good defensive stock and it outperformed the market in the last two bear markets. Mike Khouw believes that valuation is a little bit high and he warned the viewers that Wal-Mart Stores, Inc. could even trade $5 or $10 lower. He is willing to go along with the bullish trading idea in the name and he recommended a purchase of the June 82.50 call options for $2.40. The premium is less than 3 percent of the stock price and Khouw thinks that there is a pretty good chance that the stock is going to move significantly more than 3 percent in either way by June expiration.