Thursday’s Options Alerts…

  • December 5, 2001
  • TradingMarkets Editors

Major market averages roared higher today with the
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) trading above the psychological 10,000 mark and the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
hitting 2,000 for the first time in months. Tech stocks were once again the
strongest performers as speculation about Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) raising their
fourth quarter sales forecast added fuel to the fire. The sector also got a
boost from positive comments about Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) and Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating).
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near the
top of its
range and closed right on its high. This intra-day shift in sentiment
is telling us that fear is starting to creep up again. Today’s action triggered
two CVR
sell signals.
The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near the highs of its range and closed in the
lower half of its range. This intra-day shift in sentiment is telling us that fear is
continuing to decline as investors are getting more and more optimistic about
tech stocks. The VXN triggered a CVR
VI sell signal today.

Points of Significance:

Inrange Technology
(
INRG |
Quote |
Chart |
News |
PowerRating) shot up over 35% today on
news that it increased its fourth quarter earnings target and it also announced
a stock buyback. Inrange shares have almost doubled in price this week.
PolyMedica
(
PLCM |
Quote |
Chart |
News |
PowerRating) dropped over 22% as they are being investigated by the
SEC. Polymedica’s options traded double their average contract volume. There is
heavy activity in the January 22.50 and 30 puts. Autozone
(
AZO |
Quote |
Chart |
News |
PowerRating) broke out of
a month-long base today as they announced better-than-expected results. Options traded
nearly three times their average contract volume. Autozone’s implied volatility
is at a new high. Numerical Technologies
(
NMTC |
Quote |
Chart |
News |
PowerRating) jumped 18% on over four
times its average trading volume today as they announced that their president
and CEO will give a presentation at the Adams, Harkness & Hill
Semiconductor Capital Equipment Conference next Tuesday (December 11th). Options
on Numerical traded almost five times its average contract volume. There is
heavy activity in the December 25 and 30 calls.

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 24.79 DOWN 0.54 CVR
I, V SELL		 3.46 % Under Not At Extreme
VXN 47.44 DOWN .60 CVR
VI SELL		 4.30 %
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
Inrange Technologies INRG + 35.08 561 164
PolyMedica PLMD – 22.16 1758 865
AutoZone AZO + 18.86 3735 1362
Numerical Technologies NMTC + 18.59 502 106
Tellium Inc. TELM + 16.62 1019 351
Cryptologic Inc. CRYP + 15.60 439 140

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
AutoZone AZO 54.6 46.8 50.5 28.5
Financial Sector SPDRs XLF 25.1 22.4 41 20.4
PolyMedica PLMD 94.2 84.1 135.8 84.2
UST Inc. UST 29.3 26.3 33.7 25.8
Bristol Myers Squibb BMY 44 39.6 49.9 25.3
Hewlett Packard HWP 53 47.8 66.4 42.5

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Niagara Mohawk Power NMK 15.9 21.7 36.2 20.6
Ameren Corp. AEE 19.4 24 26.7 18.2
Citizens
Communications		 CZN 43.3 52.5 56.3 38.8
Reckson
Associates Realty		 RA 29.3 35.2 31.9 21.5
Heinz Co. HNZ 24.4 29.2 27.4 17.3
Host Marriott HMT 50.3 58.5 78.6 30.5

Please use stops on every trade!