Benzinga | Jul 5, 2021 07:19AM EDT

Tony Zhang's Mohawk Industries Trade

Tony Zhang of OptionsPlay said on CNBC's "Options Action" that he sees an opportunity for a further upside in Mohawk Industries, Inc. (NYSE:MHK). In the past two months, the stock had a pullback of almost 25% percent, but it bounced off its support level and it managed to break out above its downtrend line.

Zhang finds the stock oversold, but still fundamentally sound and relatively inexpensive. His target price for Mohawk Industries is $230. To make a bullish bet, Zhang wants to buy the August $195/$220 call spread for $8.30. The trade breaks even at $203.30 or 4.21% above the current stock price. Its maximal profit is $16.70.