Market Overview

Carter Worth And Mike Khouw's Oracle Trade


Carter Worth shared with the viewers of CNBC's "Options Action" his technical analysis of Oracle Corporation (NYSE: ORCL).

He said the stock has underperformed the S&P 500 and he thinks that it's going to catch up with the index. The stock is trading close to its all-time high in 2000 and Worth believes it's going to break above it and reach new all-time highs. He identified two bullish patterns, bottom head and shoulders and a cup and handle, which make him confident that the stock might move higher. The company is going to report earnings on June 21 and Worth believes it's going to gap higher after the earnings results.

Mike Khouw suggested a bullish options strategy in Oracle. He wants to sell the August 41 put for 35 cents and buy the August 45/48 call spread for $1. The trade would cost him 65 cents and it breaks even at $45.65 or 1.33 percent higher. If the stock closes below $41, Khouw is going to have to purchase the stock for $41 and he's going to lose 65 cents. If it trades to or above $48, he's going to earn the maximal profit of $2.35.


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Posted-In: Carter Worth CNBC Mike KhouwOptions Markets Media