Wednesday’s Options Alerts…
Stocks rallied again today after the Northern
Alliance took Kabul. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating), S&P
(
$SPX |
Quote |
Chart |
News |
PowerRating), and Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) rose higher as news that the Taliban
lost control of the capital city. Positive corporate news from
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating) also help spark today’s rally. Today the VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped
lower on the open and then spent the day working its way further down to close near its lows of the day. This
intraday shift in sentiment
showed that fear is continuing to drop as investors heard that
yesterday’s plane crash was not a
terrorists act, and that the war is close to a conclusion. Today the VIX triggered a CVR
III sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) replicated the action in the VIX today as it too gapped
lower at the open and
worked further down to close near its lows for the day. This intraday shift in sentiment
also showed that
fear is subsiding. The VXN did not trigger any CVR signals for the
day.
Points of Significance
Watson Pharmaceuticals
(
WPI |
Quote |
Chart |
News |
PowerRating) plunged almost
40% today as the company announced much lower-than-expected earnings; they also
announced that they will move towards higher margin branded products and away
from generic drugs. Watson’s options volume was heavy today as it traded over
four times its average contract volume. Its implied volatility is also at a new
high. Digital Lightwave
(
DIGL |
Quote |
Chart |
News |
PowerRating) gapped up on heavy volume today but stopped
just shy of its 50-day moving average. Options volume was three times its
average. Manugistics
(
MANU |
Quote |
Chart |
News |
PowerRating) gapped out of its three-bar pullback today on
double its average volume today as they announced that Omni Hotels will
implement their Revenue Optimizer software. DeVRY
(
DV |
Quote |
Chart |
News |
PowerRating) dropped almost 16% today
as they reported at their shareholders meeting that new student enrollment is
expected to be lower than fall of 2000. DeVRY’s implied volatility is also at a
new high which suggests that their options are getting expensive.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 28.58 | – 2.68 | CVR III SELL |
8.54 % Under | Not At Extreme |
| VXN | 55.94 | – 3.05 | NONE | 5.25 % 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 |
| Watson Pharmaceuticals |
WPI | – 39.46 | 5027 | 1123 |
| Americredit | ACF | + 22.72 |
7160 | 2155 |
| Digital Lightwave |
DIGL | + 18.84 |
1293 | 465 |
| Manugistics Group |
MANU | + 17.41 |
1275 | 463 |
| Sandisk | SNDK | +16.25 | 1373 | 507 |
| Metris Companies |
MXT | + 14.40 |
7548 | 2040 |
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 |
| Watson Pharmaceuticals | WPI | 61.4 | 50.5 | 46.6 | 32 |
| DeVry | DV | 56.1 | 46.7 | 49.5 | 38.3 |
| Plum Creek Timber | PCL | 33.7 | 28.2 | 48.8 | 29.8 |
| Lumenis LTD | LUME | 94.7 | 81.8 | 87.9 | 78.5 |
| Entergy Corporation | ETR | 28.2 | 24.6 | 32.4 | 22.4 |
| Elan Corporation | ELN | 49.1 | 43.3 | 53.8 | 32.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Hibernia Class A | HIB | 30.3 | 38.4 | 40.3 | 30.8 |
| Hasbro | HAS | 39.8 | 46.8 | 59.1 | 31.2 |
| Renters Choice |
RCII | 51.4 | 60.3 | 32.8 | 38.6 |
| Continental Airlines |
CAL | 80.5 | 93.2 | 127.5 | 33.5 |
| Metris Companies | MXT | 84.9 | 96.8 | 115.5 | 51 |
| Gtech Holdings |
GTK | 32 | 36.4 | 41.3 | 32.4 |
Please use stops on every trade!