Friday’s Options Alerts

  • May 9, 2002
  • TradingMarkets Editors

No follow though occurred as the major
averages retreated today after yesterday’s monster gains. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
gave back 2.7% after yesterday’s 6% jump. Biggest losers today were yesterday’s
winners which included biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) which were off almost 5% and
networking issues
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), off almost 5%. Gainers today were
gold, paper, and defensive issues. On the economic front, jobless claims declined almost as expected. Many retailers reported same-store sales that fell below or
were the low end of expectations. Discount giant Wal-Mart’s sales declined 3.3%, more than their own expectations. 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 near its highs. This shift
in intraday sentiment suggests an increase in fear. Once again, no CVR signals
were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened and in the upper half of
its range. This shift
in intraday sentiment suggests a slight increase in fear. No CVR signals
were triggered by the VXN either. 

Points of Significance:

CheckFree
(
CKFR |
Quote |
Chart |
News |
PowerRating) jumped 15% on
more than five times its average volume despite its software counterparts dropping 4%. It was announced earlier today that Bank of America
(
BAC |
Quote |
Chart |
News |
PowerRating)
waived its fee for online bill payment, a service which CheckFree provides. There is heavy
activity in the August 22.50 calls.

Pacific Sunwear
(
PSUN |
Quote |
Chart |
News |
PowerRating) dropped
12% on over twelve times its average volume. The shares came under heavy
pressure today as the company reported disappointing same store sales that fell
6.7% compared to flat sales. Pacific Sunwear also lowered first quarter
estimates to 10 cents a share from consensus estimates of 13 cents a share. The
company will report results on May 13. The shares were very weak but reversed
course to close near its highs and above its .618 retracement level from its
December lows. There is heavy activity in the June 20 and 22.50 calls. 

Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating) gave up almost
3% on below average volume. The shares are forming a head and shoulder top. A
break below its neckline at 53.30 would not be good. However there is
significant activity in the June 55 calls.   

 

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 24.36 UP
1.07		 NONE 1.84
% Above		 Not
At
Extreme
VXN 48.08 UP
2.27		 NONE 4.77
% 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
Checkfree
Holdings		 CKFR +
15.23		 1967 117
Pacific
Sunwear		 PSUN –
12.30		 1163 169
Intersil
Holdings		 ISIL –
8.49		 1509 677
Gap
Inc.		 GPS +
7.34		 10307 2283
ASM
Lithography		 ASML –
5.24		 1601 279
Schlumberger SLB –
2.78		 21524 2963

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
Financial
Sector SPDRs		 XLF 15.8 11.8 27.3 14
Davita DVA 63.3 53.3 48.5 29
Olin OLN 36.4 30.8 53.2 29.5
United
Parcel Service		 UPS 13.6 11.3 23.2 11.5
Pacific
Sunwear		 PSUN 59 50.9 74.5 53
Biovail BVF 82.2 71.2 64.7 33.8

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
PennzEnergy PZL 17.5 23.6 50.8 29.6
Public
Service Enterpise		 PEG 17.7 20.7 30.3 15.3
Mid
Atlantic Med.Svcs.		 MME 32.8 38 48.4 34.7
Arthrocare
Corp.		 ARTC 46.2 53.2 80.9 44.1
Hot
Topic		 HOTT 45 50.1 71.8 40.6
Hovanian
Enterprises		 HOV 50.3 55.2 557.3 38.6

Please use stops on every trade!