Friday’s Option Alerts
Stocks ended lower after Greenspan’s testimony. Stocks
started off in the green, but later ended red after the Fed Chairman’s
testimony.
In his
second testimony to the Senate Banking Committee, Greenspan was more optimistic
as he suggested that an economic recovery was already under way. Weekly initial
jobless claims fell an expected 5,000 to 376,000. While its four-week moving
average fell to its lowest levels since last August.
For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near
its lows and closed right under its open. This shift in intraday sentiment
today does suggest that fear is subsiding. No CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its lows and
closed just right above the open. This intraday shift in sentiment also suggests fear is
dropping. The VXN did not trigger any CVR signals today either. Remain cautious as
volatility is still in dangerously low levels.
Points of Significance:
Shares of Sepracor
(
SEPR |
Quote |
Chart |
News |
PowerRating) plunged
almost 60% on over 32 times average volume. Sepracor shares lost over half their
value today as the FDA did not give approval to its allergy drug Soltara.
Soltara was to challenge the top selling antihistamine drug Claritin. The FDA
rejected the drug on the basis that it could cause heart irregularities. It was
also unclear whether the drug would have to undergo new clinical trials. The
shares have not traded at this level since January 1998. On the monthly chart,
the stock is breaking the neckline of a head-and-shoulders top.
Electronic retailer Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) jumped over 6% today on
double-average volume. The company, which will report earnings on the 25th, came
out and reaffirmed. Best Buy expects profits to jump 80% higher than last year
due to strong holiday sales. There is heavy activity in the April 80 calls.
Celgene
(
CELG |
Quote |
Chart |
News |
PowerRating) dropped 16% on
five times average volume. The company announced that an application to market
Thalomid, its multiple myeloma cancer drug, would be delayed by at least two
years in order to conduct further clinical trials.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.95 | DOWN .08 |
NONE | 3.68 % Below |
Not at Extreme |
| VXN | 43.76 | UP 1.03 |
NONE | .007% 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 |
| Sepracor | SEPR | – 58.45 |
5794 | 2468 |
| Cubist Pharmaceuticals |
CBST | + 26.01 |
1802 | 239 |
| Celgene | CLEG | – 16.24 |
1384 | 493 |
| Cytyc | CYTC | – 7.02 |
6394 | 781 |
| Myraid Genetics |
MYGN | – 5.55 |
2803 | 516 |
| Best Buy |
BBY | + 6.45 |
17210 | 6176 |
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 |
| Cytyc | CYTC | 70.9 | 49.8 | 69.3 | 49 |
| Wisconsin Energy |
WEC | 204 | 16.1 | 23.5 | 20.2 |
| Digene | DIGE | 56.8 | 44.9 | 90.1 | 45.4 |
| Cubist Pharmaceuticals |
CBST | 76.3 | 62.2 | 82.1 | 62.9 |
| Sepracor | SEPR | 81.6 | 68 | 76.8 | 57.8 |
| Int’l Business Machines |
IBM | 36.5 | 31 | 50.8 | 28.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| TECO Energy |
TE | 18.1 | 22 | 31.1 | 15.9 |
| FTI Consulting |
FCN | 53.6 | 64.3 | 76.7 | 47.2 |
| Keyspan | KSE | 21.2 | 25.1 | 31.7 | 22 |
| Dominion Resources |
D | 15.8 | 18.4 | 30.8 | 21.1 |
| Ameren Corp. |
AEE | 17.4 | 20.1 | 26.7 | 18.2 |
| J.C. Penney |
JCP | 69.4 | 78 | 75.7 | 48.4 |
Please use stops on every trade!