Wednesday’s Options Alerts

• April 16, 2002
• TradingMarkets Editors

Better-than-expected earnings from the semiconductors and telecoms ignited
the major averages today. Tech stocks had a field day today as better-than-expected results from Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating) and Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating) helped the Nasdaq to a 3.5% gain.
Several pieces of economic data that showed a benign inflationary environment
also helped to boost the market today. Industrial production for March increased
0.7% compared to estimates of a 0.5% increase, the biggest increase since
May 2000. Capacity utilization rose to 75.4%.  beating estimates of 75%. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened at its highs and closed near its lows. This intraday shift in intraday sentiment
suggests that fear in decreasing. No CVR signals were triggered by the VIX today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its highs and closed near its lows. This too shows a
decrease in fear. The VXN did not trigger any CVR signals either. Volatility
took a beating today on the positive earnings news however we have Greenspan
testifying before the Joint Economic Committee tomorrow. 

Points of Significance:

Multimedia Gaming
(
MGAM |
Quote |
Chart |
News |
PowerRating) lost over
25% on 14 times its average volume.
The shares took a dive today after the Deputy General Council of the National
Indian Gaming Commission ruled negatively about the classification of its popular
bingo game MegaNanza. Multimedia’s shares fell below its .618 retracement from
its January low to March high. There is heavy activity in the May 35
calls. 

Pacificare Health Systems
(
PHSY |
Quote |
Chart |
News |
PowerRating) gained
over 12% on double its average volume. Shares of Pacificare Health and other
medical-care insurance companies such as Sierra Health Services
(
SIE |
Quote |
Chart |
News |
PowerRating) and
Aetna
(
AET |
Quote |
Chart |
News |
PowerRating) continue to rise today on news of insider buying. There is heavy
activity in the May 20 calls.

PMC Sierra
(
PMCS |
Quote |
Chart |
News |
PowerRating) jumped 10% on
about average volume. The shares were boosted today on news of better than
expected earnings from Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating) and Texas Instrument
(
TXN |
Quote |
Chart |
News |
PowerRating). The
shares are trading in a failed descending triangle, but there is resistance at
the confluence of its 50-day moving average and its .50 retracement at 18. There
is heavy volume in the May 12.50 calls.

Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!