Analysts Slash Tech Giants, Momentum

  • December 7, 2000
  • Tony Saliba

Just when we thought that year-end rally might be revving
up, the market gave up most of Tuesday’s gains and consequently we see vols
lifting dramatically.  Key analyst
reports–one of which slashed price targets for beleaguered giant
(
MSFT |
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PowerRating), and one
which expressed doubts about computer titan
(
HWP |
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the tech sector into another tailspin. Unfortunately,
with yesterday’s action and this morning’s, it makes no sense to look at put
verticals (as we promised yesterday). We’ll wait until we get a string of
consecutive up days, and show what strategies look inviting.

We don’t have to trade every day.

In the meantime, it’s interesting to notice that
unlike the tech. slide of Nov. 29, yesterday’s dip saw heavy options volume,
suggesting that players had come out from the sideline and into the game. 
For those of you following our strategies and that still have some of
those puts, get ready to scale out them, you could have a surprise coming out of
Tallahassee that might make us (and the market) sick with uncertainty.  

Pre-open
order volume was heavy this morning. Overall, call sellers led buyers 2:1, while
put sellers matched buyers at 1:1.  Top five order volume leaders were as
follows:
(
INTC |
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PowerRating),
(
MSFT |
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PowerRating),
(
CSCO |
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News |
PowerRating),
(
QCOM |
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News |
PowerRating) and
(
SUNW |
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PowerRating).  In pre-bell activity,
(
MOT |
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PowerRating) call
sellers outnumber buyers 3:1, while put buyers trumped sellers 6:1 on warnings
of lower than expected results. 
(
ORCL |
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call sellers led buyers 2:1. 
(
WCOM |
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PowerRating)
put sellers showed up leading buyers 4:1. 
(
NOK |
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PowerRating)
call sellers led buyers 2:1.

First
hour volume remained heavy with call buyers and sellers evenly balanced at 1:1,
and put buyers and sellers equal as well.  Top
five order volume leaders were as follows: MSFT, INTC, QCOM,
(
CIEN |
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PowerRating) and
CSCO.  MOT put buyers led sellers 3:1.  NOK put sellers led buyers
2:1. 
(
BRCM |
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PowerRating) call buyers outperformed sellers 3:2, while put sellers outpaced
buyers 3:1.  MSFT call buyers showed their face, leading buyers 2:1.

I will be answering your email questions personally, but
some have answers that are general and useful to all. I’ll answer these
questions here. Quickly, Mr. Speer asked where to find the Put/Call Ratio I
referenced in one of my first offerings. There are a few places to find this
information. Some of the sites are “Pay-Per-View” sites, but you can find
this information for free at the CBOE:

 https://www.cboe.com/Volumes/ViewHalfHourlyUpdate.htm

Our proprietary Put/Call Ratios (from which we are
quoting each morning in maroon above)
will soon be made available to our readers, here.