Thursday’s Options Alerts
What a day! The markets were hit
sharply in the morning, but made a miraculous recovery after the FED announced they were
leaving interest rates unchanged. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near the midpoint of its range and closed near
the lows of the day. Overall, the intra-day shift sentiment suggest
that fear is declining. The VIX had a massive range today as fear shot up in the
morning, but later reversed and cooled off after the FED announcement. Today’s action trigged
CVR
I, II, and VI signal buy signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) showed similar
action as the VIX. This shift in intra-day
sentiment also suggests that fear is decreasing. The VXN did not trigger any CVR
signals. Both volatility indices made dramatic turnarounds today after the
announcement. Investors cheered the decision, as this shows that the FED believes
that we are on the road to recovery. Look for more follow through tomorrow.
Points of Significance:
Elan Corp
(
ELN |
Quote |
Chart |
News |
PowerRating) fell almost 17% on over 13 times its average volume. The
shares came under pressure today as a Wall Street Journal article raised
questions about how Elan accounts for joint venture deals with other companies.
The Journal article suggested that Elan’s accounting method could improperly
inflate revenues. There is heavy activity in the February 30 calls, March 27.50,
and March 30 calls.
Quest Software
(
QSFT |
Quote |
Chart |
News |
PowerRating) fell almost 9% on triple its average volume.
The company reported a fourth quarter loss of 19 cents a share compared to 10
cents a share a year ago, however the results were still above expectations.
Quest also reaffirmed their targets for 2002, but the tone hinted for a very
tough 2002. There is heavy activity in
the February 25 puts.
Renaissance Learning
(
RLRN |
Quote |
Chart |
News |
PowerRating) jumped 18% on
triple its average volume. Renaissance reported fourth earnings that were up 27%
from a year ago and a penny ahead of expectations. The company also reiterated
that it expects to maintain its revenue growth rate of 24%. There is heavy
volume in the July 30 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 24.87 | DOWN 1.39 |
CVR I, II, VI BUY |
3.75 % Above |
Not at Extreme |
| VXN | 44.67 | DOWN 1.23 |
NONE | 5.04 % 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 |
| Renaissance Learning |
RLRN | + 18.66 | 292 | 140 |
| Elan Corp. |
ELN | – 16.90 |
11054 | 3447 |
| FTI Consulting |
FCN | + 9.57 | 285 | 105 |
| Fair Isaac |
FIC | + 8.84 |
542 | 203 |
| Quest Software |
QSFT | – 8.58 | 952 | 202 |
| Darden Restaurants |
DRI | + 6.10 |
326 | 158 |
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 |
| SPX Corp. | SPX | 69.7 | 44.6 | 58.5 | 34.6 |
| Elan Corp. |
ELN | 84.1 | 54.8 | 53.8 | 35.8 |
| Conoco | COC | 43 | 28.5 | 35 | 31.8 |
| Walgreen | WAG | 33.5 | 23.5 | 39.1 | 23.7 |
| Alliance Capital |
AC | 38.1 | 30.1 | 34.7 | 21.5 |
| American Int’l Group |
AIG | 37.1 | 30.2 | 42.9 | 23.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Dominion Resources |
D | 17.1 | 21.5 | 30.8 | 21.7 |
| Tyco Int’l |
TYC | 88.7 | 111.2 | 53.3 | 28.7 |
| Puget Sound Energy |
PSD | 17.1 | 21.4 | 28.7 | 23.4 |
| Roslyn Bancorp |
RSLN | 28.6 | 34.4 | 41.2 | 26.8 |
| Equity Residential Property |
EQR | 16.3 | 19.6 | 30.2 | 17.7 |
| First Tennessee Nat’l. |
FTN | 25.1 | 29.6 | 41.7 | 23.2 |
Please use stops on every trade!