Friday’s Options Alerts

• May 30, 2002
• TradingMarkets Editors

Things looked
grim from the start as
it seemed as if the indices would end negative for the fourth consecutive
session. However the market made a turn for the better in afternoon trading with the

Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) shedding the majority of their
losses while the Nasdaq turned green after getting help from the software
sector. 

Worries about corporate accounting, more terrorist attacks and
tensions between Pakistan and India are still on the horizon to keep buyers on
the sidelines. Whether this is just short-covering or the start of an upleg will remain to be seen. On the economic front, initial jobless claims
fell to 410,000 from 422,000, slightly better than estimates of
412,000. However, the number of workers collecting state unemployment benefits
rose to 3.9 million, hitting a 19-year high. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) once again gapped up and opened
near the midpoint of its range and closed near the lows of the day. This shift
in intraday sentiment shows a decrease in fear. The VIX triggered yet another a CVR I
buy signal
today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also gapped
up and opened at the highs of its range and closed just above the midpoint of
its range. This shift in intraday also shows a decrease in
fear. Today’s action again triggered another CVR
I.

Points of Significance:

Genesis Micro
(
GNSS |
Quote |
Chart |
News |
PowerRating) lost more
than 25% on almost five times its average volume. The shares got hammered today
after Genesis CFO told investors that the company is facing heavy pricing
pressure and possible loss of market share. The stock dropped to a new 52 week
low. On its weekly chart, Genesis also broke the neckline of its head and
shoulders. Its implied volatility is actually somewhat low.

P.F. Chang’s China Bistro
(
PFCB |
Quote |
Chart |
News |
PowerRating)
fell almost 10% on seven times its average volume. The stock has more than
doubled since its September lows. P.F. Chang did take out an intermediate-term
trendline today. Its next support is at the .382 retracement level, 32.75.

Harmony Gold
(
HGMCY |
Quote |
Chart |
News |
PowerRating) dropped
6% on triple its average volume. Gold shares were once again weak as the broader
market started to gain strength. Harmony pulled back for the second day and
found support at its 20-day moving average and its .382 retracement level from
its April low. Although a further pullback could be likely as a rebound in the
broader market gets under way, this pullback does represent an
opportunity.

Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!