Thursday’s Options Alerts
The Dow was
off to a good start in early morning trading as it shrugged off the negative
news from J.P. Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) and Intel
(
INTC |
Quote |
Chart |
News |
PowerRating). Better-than-expected results from Citigroup
(
C |
Quote |
Chart |
News |
PowerRating), Boeing
(
BA |
Quote |
Chart |
News |
PowerRating), and United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating)
helped the index to a 250-point gain early in the session. However, the index
lost the majority of those gains to close up 69 points or 0.81%, thus breaking
its seven-day losing streak.
The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained 5.10 points
or 0.56% and the Nasdaq was the best-performing index for the third straight
session as it gain almost 22 points, or 1.59%. Biotech issues
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
continued to climb for the fifth day as index gained 7.34%, thanks in part to Millennium
Pharmaceuticals
(
MLNM |
Quote |
Chart |
News |
PowerRating) and Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating). However biotechs remain in a
long-term down trend and the index closed right at resistance at its intermediate
term downtrend line. \
Weak sectors today were gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), computer
hardware
(
$HWI.X |
Quote |
Chart |
News |
PowerRating), and telecoms
(
$XCI.X |
Quote |
Chart |
News |
PowerRating).
Today also marked the second day of
Greenspan’s testimony before Congress. The Fed chairman reiterated that the
fundamentals for an recovery are in place and the worst of the corporate
scandals appear to be over.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped down,
opened in the lower third of the range, and closed just above its open. This shift
in intraday sentiment actually shows a small rise in fear. Today’s action
triggered CVR 2 and 5 buy signals. The action in the VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
gapped down, opened near its highs, and closed near the lows of the day. This shift in intraday sentiment
also shows a decrease in fear. The VXN didn’t trigger any signals today.
Points of Significance:
Human Genome Sciences
(
HGSI |
Quote |
Chart |
News |
PowerRating) gained 15% on
more than triple its average volume. Shares of the biotech company have been up
five days in a row on increasing volume. It also closed above a five-month long
downtrend line today. However volatility is still too high to warrant straight
option buying.
New Century Financial
(
NCEN |
Quote |
Chart |
News |
PowerRating) fell 12.5% on more than double its average
volume. The shares look to be breaking down from a head & shoulders
top.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 39.80 |
DOWN 2.25 |
CVR 2, 5 BUY |
8.71% Above |
Not At Extreme |
| VXN | 63.23 |
DOWN 4.71 |
NONE | 0.007 % Below |
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 |
| Capital One Financial |
COF |
– 39.76 |
14207 |
2047 |
| Human Genome Sciences |
HGSI |
+ 15.69 |
2812 |
515 |
| Teradyne |
TER |
– 15.03 |
5792 |
939 |
| Enzon |
ENZN |
+ 13.23 |
3635 |
813 |
| New Century Financial |
NCEN |
– 12.53 |
3121 |
403 |
| Apple Computer |
AAPL |
– 12.43 |
13134 |
2657 |
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 |
| Lennox Interantional |
LII |
54 |
42.2 |
43.6 |
27.5 |
| New Century Financial |
NCEN |
88 |
71.7 |
70.5 |
53.8 |
| Fred’s |
FRED |
54.7 |
46.6 |
45.9 |
41 |
| Independence Community Bank |
ICBC |
34.1 |
29.2 |
32.4 |
26.9 |
| Everest Group |
RE |
51.7 |
44.4 |
42.8 |
27.2 |
| Federal Agriculture |
AGM |
111.4 |
95.7 |
99.9 |
73.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Biotech HOLDRs |
BBH |
38.5 |
61.2 |
60.6 |
27.5 |
| Stryker Corp. |
SYK |
38.6 |
47 |
45.9 |
25 |
| Pre-Paid Legal |
PPD |
123.9 |
147.7 |
124.3 |
62 |
| Invitrogen |
IVGN |
78.5 |
92.9 |
96.2 |
49 |
| Corinthian Colleges |
COCO |
72.8 |
85.1 |
57 |
35.6 |
| Walgreen |
WAG |
36.5 |
42.4 |
32.9 |
19.4 |
Please use stops on every trade!