Carter Worth And Mike Khouw's Energy ETF Trade

Carter Worth shared with the viewers of CNBC's "Options Action" his technical analysis of Energy Select Sector SPDR (ETF) XLE.

He believes the stock is ready to bounce after a long period of downtrend. Worth showed that although the stock reached its new lows recently, it outperformed the market, because it didn't reach a new low relative to the S&P 500. He interprets this as a positive sign that could lift the stock even further. He expects to see a 10 percent move higher.

Mike Khouw suggested that the best way to make a bullish bet is by purchasing the September 66/70 call spread for $1.20. The trade breaks even at $67.20 or 2.75 percent above the current closing price. It can maximally make a profit of $2.80.