Friday’s Options Alerts
The major averages had another seesaw
battle, but in the end, the negative retail report knocked stocks down. Retail
sales in May fell 0.9% vs. an increase of 0.1%. This was the third drop in
retail sales this year and the biggest monthly decline since last November.
Excluding auto sales, retail sales dropped 0.4% vs. an expected rise of 0.3%.Â
This downturn in retail sales is definitely a
negative, since consumer spending
had been strong. A slowdown in consumer spending can have a ripple effect on the
economy. The PPI was a non-event as the latest data shows that inflation is
well-contained. May producer prices fell 0.4% vs. a 0.1% increase. The
market did rally off the bad news in the morning, but drifted lower as the day
went on. The inability of the market to sustain any strength is definitely
bearish. For more information on today’s action, please refer to
the market
recap.
Not much happened on the VIX front. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened in the lower half of its range and closed near the highs of
the day. This shift
in intraday sentiment shows an increase in fear. No CVR signals were triggered
today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near the bottom third of its
range and closed just above the open. This shift in intraday sentiment shows a
small increase in fear. No CVR signals were triggered either.
Points of Significance:
Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) gained almost
7% on triple its average volume. The shares got a boost today after they
received a favorable court ruling in a dispute over the co-licensing of a heart
disease treatment. Shares of this better-performing biotech issue are
trading in an upward-trending channel and looks like it can rally to 29 before
hitting resistance.
H&R Block
(
HRB |
Quote |
Chart |
News |
PowerRating)
dropped 6% on double its average volume. The company announced fourth quarter
earnings that beat estimates by 2 cents and raised estimates for 2003 to $2.68
from $2.47 and fiscal 2004 to $ 2.91 from $2.86. However the shares declined as
Chairman Frank Salizzoni announced his retirement. Shares of the tax preparer are
also trading in a channel, a break below 43.23 could mean trouble.
Electronic Data Systems
(
EDS |
Quote |
Chart |
News |
PowerRating)
dropped 5% on heavy volume. No news was announced as the stock dropped to a 52-week low. However there is some positive divergence with its RSI
reading.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 28.73 | UP 1.72 |
NONE | 8.91 % Above |
Near Extreme |
| VXN | 54.30 | UP 1.44 |
NONE | 7.29 % 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 |
| Polymedica | PLMD | – 14.44 |
2721 | 144 |
| Flemings | FLM | + 7.83 |
547 | 203 |
| Boston Scientific |
BSX | + 6.92 |
3588 | 262 |
| HR Block |
HRB | – 6.43 |
1076 | 125 |
| Guidant | GDT | – 7.17 |
12818 | 533 |
| Electronic Data Systems |
EDS | – 5.53 |
26296 | 2115 |
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 |
| Catalina Marketing |
POS | 55 | 37.9 | 39.6 | 25.1 |
| American Capital Strategies |
ACAS | 39.1 | 28.6 | 42 | 22.4 |
| Cresent Real Estate |
CEI | 27.1 | 22.1 | 27.3 | 20.1 |
| PP&L Resources |
PPL | 35 | 28.6 | 38.1 | 24.8 |
| Performance Food Group |
PFGC | 42.5 | 35.5 | 46.5 | 34 |
| Allied Capital Corp. |
ALD | 61.5 | 52.5 | 44.7 | 21.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Hispanic Broadcasting |
HSP | 46.9 | 52.9 | 52.6 | 39.1 |
| Tyco International |
TYC | 130.2 | 177.6 | 132.8 | 30.8 |
Please use stops on every trade!