Thursday’s Options Alerts
The slightly higher than expected CPI
report triggered a lower opening but the major averages reversed and rallied
solidly
for the majority of the day before putting in another reversal during the final
hour of trading. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) and
S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) declined
modestly while the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) rose slightly.
Consumer prices rose
0.5% or .01% more than expected. The core rate was up 0.3% which was slightly
higher than the expected increase of 0.02%. Dell will be reporting results
tomorrow after the close. Expect more backing and filling till then. For more information on today’s action, please refer to
the market
recap.
The VIX [$VIX.X|$VIX.X] had an inside
day today. It opened and closed near the highs of the day. There wasn’t much of
a shift in intraday sentiment today. Today’s action did trigger a CVR
5 sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also opened and closed near the highs
of the day. The VXN triggered both CVR
I and V sell signals.
Points of Significance:
Network Appliance
(
NTAP |
Quote |
Chart |
News |
PowerRating)
dropped 16% on triple its average volume. The shares were hammered today as the
company posted fourth quarter results two cents shy of expectations. Going
forward, the company sees first quarter results inline with estimates of 4 to 5
cents a share. Shares of NTAP are looking to resume its downtrend after a short
counter trend rally.
Drug companies
Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating)
and Abbott Labs
(
ABT |
Quote |
Chart |
News |
PowerRating) both fell sharply on very heavy volume as they
both are facing trouble from the law .Shares of Schering Plough fell to a five-year
low today as the government is launching a preliminary investigation into the
company’s products. Abbott Labs announced that its Lake County, Illinois,
plant failed to comply with FDA standards. The stock fell to a 52-week
low.
Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating) jumped 6% on
almost twice its average volume. The shares continue to show good follow
through after breaking out of a cup and handle more than a week ago. There is
heavy activity in the June 20 calls. Those options are somewhat cheap.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 22.13 | UP 0.38 |
CVR V SELL |
5.87% Below |
Not At Extreme |
| VXN | 45.40 | UP 1.06 |
CVR I, V SELL |
3.72 % 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 |
| Network Appliance |
NTAP | – 16.57 |
8414 | 2019 |
| Schering Plough |
SGP | – 12.24 |
32176 | 2600 |
| Abott Labs |
ABT | – 9.35 |
12940 | 1311 |
| Computer Associates |
CA | – 7.06 |
13019 | 2796 |
| Amazon.com | AMZN | + 6.00 |
12595 | 5715 |
| Hewlett Packard |
HPQ | – 5.60 |
10649 | 1935 |
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 |
| Schering Plough |
SGP | 46.3 | 33.2 | 43 | 29 |
| UST Inc. |
UST | 26 | 20.4 | 29.1 | 18.1 |
| Trinity Industries |
TRN | 39.8 | 32.1 | 33.2 | 27.4 |
| American Water Works |
AWK | 12.9 | 10.6 | 17.1 | 8.7 |
| Moody’s Corp. |
MCO | 27.5 | 23.1 | 34.4 | 22.4 |
| Pep Boys |
PBY | 41.9 | 35.4 | 60 | 32.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Network Appliance |
NTAP | 91.1 | 120.8 | 99.5 | 77.3 |
| Telefonos de Chile |
CTC | 31.6 | 40.1 | 37.7 | 26.1 |
| Charter One Financial |
CF | 19.3 | 23.7 | 33.8 | 18.1 |
| AT&T Canada |
ATTC | 26.7 | 32.4 | 70.2 | 13.2 |
| Simplex Solutions |
SPLX | 44.7 | 51 | 92.5 | 37.1 |
| Computer Sciences |
CSC | 41.2 | 46 | 49.3 | 38.3 |
Please use stops on every trade!