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. 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.

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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.