Wednesday’s Options Alerts
Accounting woes once again
knocked stocks down. With the exception of airline issues, all sectors
were red. Investors continue to dump shares of IBM
(
IBM |
Quote |
Chart |
News |
PowerRating) and NVIDIA
(
NVDA |
Quote |
Chart |
News |
PowerRating).
In addition, even more issues such as Cisco and J.P. Morgan are coming under
scrutiny. For more information on today’s action, please refer to
the
Stock Market Recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up to open near their lows of the day and closed near
their highs. This shift in intraday
sentiment suggests that fear is still increasing. No CVR signals were triggered by the
VIX.
The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near the midpoint of its range and closed near
its highs.
This intraday shift in sentiment also suggests that fear is increasing. The VXN did not trigger any CVR signals.
Fear is continuing to increase as more accounting woes hit the wires today. As
the earnings season is winding down more of the focus could be shifted towards
corporate accounting issues. Although both volatility indices gapped up today,
it is still suitable for put buying.
Points of Significance:
Newport Corporation dropped over 15% on triple
its average volume. Newport announced today that they completed acquisition
of Micro Robotics Systems, a privately held manufacturer of high-precision, fully automated assembly and dispensing systems for the fiber optic
communications, microwave and semiconductor equipment markets. The stock broke
down from a two-month base and stopped just shy of its 50% retracement from its
September 2001 lows. There is heavy activity in the March 20 puts.
Network Associates
(
NET |
Quote |
Chart |
News |
PowerRating) dropped 7% on heavy
volume today. The company announced today that Allergan Corp.
(
AGN |
Quote |
Chart |
News |
PowerRating) will use
the McAfee’s Active Virus Defense
(
AVD |
Quote |
Chart |
News |
PowerRating) for their global network. The shares did break down from a
month-long base. There is heavy activity in the March 22.50 puts.
TJX Companies
(
TJX |
Quote |
Chart |
News |
PowerRating) dropped 4% on heavy volume. The shares
are once again near its 50% retracement level its September 2001 lows.
There is heavy activity in the July 30 and 35 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 26.21 | UP 2.12 |
NONE | 4.67 % Above |
Not at Extreme |
| VXN | 47.23 | UP 2.24 |
NONE | 1.31 % Above |
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 |
| Travelocity.com | TVLY | + 29.73 | 6303 | 539 |
| Circuit City |
CC | – 16.25 |
5764 | 1729 |
| Newport Corp. | NEWP | -15.66 | 1989 | 814 |
| Advent Software |
ADVS | – 8.54 |
306 | 102 |
| Harris | HRS | – 8.42 | 659 | 101 |
| Network Associates |
NET | – 7.18 |
1814 | 349 |
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 |
| Trimeris | TRMS | 65.5 | 51.7 | 67.4 | 49.8 |
| Forrest Labs |
FRX | 33.8 | 26.9 | 41.7 | 26.8 |
| T.Rowe Price | TROW | 34.4 | 27.7 | 52.5 | 27 |
| Citigroup | C | 39.7 | 32.4 | 52.6 | 27.5 |
| Circuit City | CC | 63.8 | 52.3 | 80.4 | 49.6 |
| Harris | HRS | 41.3 | 33.9 | 44 | 31.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Travelocity.com | TVLY | 32.6 | 80.7 | 116.4 | 67.4 |
| Jefferson Pilot |
JP | 21 | 24.4 | 28 | 20 |
| ITT Industries |
ITT | 20.2 | 22.9 | 31.6 | 24.7 |
Please use stops on every trade!