Wednesday’s Options Alerts…
Stocks shook off earlier losses and rallied after
the Federal Reserve lowered the Fed Funds rate to 2 percent. The Dow
(
$INDU |
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PowerRating), S&P 500
(
$SPX |
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PowerRating), and Nasdaq
(
$COMPQ |
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PowerRating) all put in solid performances after what
was the tenth rate cut this year. Today the VIX
(
$VIX.X |
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PowerRating) opened near
the highs of its range and closed near its lows. The VIX dropped soon
after the FED made its announcement. This Intraday shift in sentiment once again
tells us that fear is continuing
to subside, as investors think that the rate cut will help boost the economy. No
CVR signals were triggered today. However we are close to a CVR
II sell signal. Wait for the RSI of the VIX to uptick before you take
action. The VXN
(
$VXN.X |
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Chart |
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PowerRating) exhibited the same behavior as it too opened
near the high and closed near the lows of today. Again this intraday shift in sentiment
suggests that
fear is continuing to subside. The VXN did not trigger any CVR signals for
today either, though it too is close to triggering a CVR
II sell signal. Both volatility indices are in oversold territories, which
suggests that the market is overbought. However, markets can become even more
overbought, so please wait for signals to trigger before you take action.
Points of Significance:
Double Click
(
DCLK |
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Chart |
News |
PowerRating) shot up over 18% higher
after the company announced plans to expand their rich media offerings across its
network of over 1,700 sites. DCLK broke a down trend line and broke above its
20-, 50- day moving averages today on five times its average daily volume. Option’s volume was heavy
as it traded almost triple its average daily contract volume. Hewlett Packard
(
HWP |
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Chart |
News |
PowerRating) broke
above its 20- and 50-day moving averages today on triple its average daily volume today.
The Hewlett family, who owns a five-percent stake in the company, announced they plan to vote against the merger with Compaq Computer. Options volume
on HWP was heavy as it traded over five times its average number of contracts.
Alliance Gaming
(
ALLY |
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PowerRating) broke out of a pennant on over double its average
trading volume. Option volume was heavy as it traded over triple its average
daily contract volume. Pharmaceutical Product Development
(
PPDI |
Quote |
Chart |
News |
PowerRating) continued
to break down from a head and shoulders top today on heavy volume. Implied
volatility has gone to a new high.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 29.85 | DOWN 2.09 | NONE | 8.41 % Under | Not At Extreme |
| VXN | 57.31 | DOWN 1.65 | NONE | 4.55 % Under |
Not At Extreme |
Abnormal Options Volume With Price Movement
– Abnormal options volume (calls and puts) with stock price movement
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Double Click | DCLK | + 18.72 | 3006 | 1060 |
| Hewlett-Packard | HWP | + 17.28 |
37881 | 6788 |
| Finisar Corporation |
FNSR | + 16.53 |
1663 | 707 |
| Alliance Gaming |
ALLY | + 12.38 |
1120 | 363 |
| F5 Networks | FFIV | + 10.79 | 1520 | 589 |
| Henry Schein |
HSIC | + 10.61 |
577 | 227 |
Stocks With Biggest Spikes in Implied
Volatility – Stocks with biggest increases or decreases in implied
volatility compared to previous day.
Spike Up
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Ohio Casualty | OCAS | 66.6 | 53.4 | 72 | 43.2 |
| Pharmaceutical Product Development |
PPDI | 81.8 | 67.3 | 80.4 | 51 |
| Compaq Computer | CPQ | 73.9 | 61.9 | 68.7 | 45.9 |
| Exxon Mobil | XOM | 32.7 | 28 | 36.2 | 20.4 |
| Immunomedics, Inc. | IMMU | 78.4 | 69.6 | 89.2 | 62.7 |
| Compania Anoima | VNT | 67.7 | 60.4 | 76.7 | 48 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Niagara Mohawk Power | NMK | 20.8 | 29.1 | 36.2 | 15.8 |
| Host Marriott Corporation |
HMT | 56.5 | 69.3 | 78.6 | 30.5 |
| ServiceMaster | SVM | 26 | 31 | 37.7 | 21.5 |
| Oxford Health |
OHP | 46.5 | 55.3 | 61.2 | 36.4 |
| Autonation | AN | 42.1 | 49.2 | 49.6 | 40 |
| TyCom LTD | TCM | 35.4 | 41 | 94.9 | 38.6 |
Please use stops on every trade!