Friday’s Options Alerts
The Dow closed higher for the third
consecutive day while the broader S&P headed slightly lower. Meanwhile the
Nasdaq was the hardest hit as it dropped 2%. We’re coming up on the 20-day
moving average in the Dow, which has posted considerable resistance on
several occasions. Economic data was somewhat mixed today: Factory orders
picked up, weekly jobless claims fell. However, layoffs were up 10% in April. For more information on today’s action, please refer to
the market
recap.
Not much happened today on the
volatility front as volatility stayed in a tight range. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near its lows and closed slightly above its open. This suggests a mild
increase in fear. No CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened
near the mid-point of its range and closed near the highs of the day. This
suggests a slight increase in fear. No CVR signals were triggered today
either.
Points of Significance:
Express Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating) dropped
12.5% on
almost 16 times its average volume. The shares were pounded today as the company has
been subpoenaed by the U.S. Attorney’s office in connection with health care
offenses and other crimes. The shares quickly reversed course after trading to a
new 52 week high earlier in the day. Express Scripts broke a multi-month
uptrendline. However, the stock did bounce off its .618 retracement from its
February lows. There is heavy activity in the May 65 puts.
Cima Labs
(
CIMA |
Quote |
Chart |
News |
PowerRating) jumped over 16% on
double its average volume. The company reported first quarter earnings that beat
estimates by 2 cents. Cima Labs reaffirmed that second quarter earnings will be
within consensus estimates. Cima is staging a counter trend rally and
is near resistance at its 20-day average and a .618 fib retracement. There is
heavy activity in the May 22.50 calls.
Health South
(
HRC |
Quote |
Chart |
News |
PowerRating) dropped 5% on double its average volume.
The company reported first quarter earnings that increased 43% from the same
period a year ago and matched expectations. Shares of Health South displayed a
huge outside day. There is heavy activity in the June 15 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 22.38 | UP 0.07 |
NONE | 2.18% Below |
Not At Extreme |
| VXN | 44.52 | UP 0.61 |
NONE | 6.45 % 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 |
| Cima Labs |
CIMA | + 16.84 |
949 | 133 |
| Express Scripts |
ESRX | – 12.46 |
4248 | 561 |
| Caremax RX |
CMX | – 8.42 |
1434 | 482 |
| ACE Limited |
ACE | – 8.31 |
2964 | 402 |
| AdvancedPCS | ADVP | – 7.61 |
3087 | 607 |
| HealthSouth | HRC | – 5.41 |
10343 | 1501 |
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 |
| Express Scripts |
ESRX | 51.5 | 32.7 | 67.2 | 30.4 |
| National City Corp. |
NCC | 20.7 | 13.7 | 29.5 | 17.6 |
| AdvancedPCS | ADVP | 50.6 | 39.8 | 78.8 | 40.5 |
| Household International |
HI | 44.9 | 36 | 58.5 | 30 |
| KeyCorp | KEY | 25.9 | 20.8 | 33.9 | 20.9 |
| Manpower | MAN | 34.4 | 27.9 | 39.2 | 32.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Cinergy | CIN | 12.9 | 16.4 | 31.7 | 16.5 |
| Equity Office Prop. |
EOP | 17.8 | 21.1 | 30.1 | 16 |
| Colonial Bancorp |
CNB | 20.1 | 24.4 | 34.9 | 20.2 |
| Southern Co. |
SO | 20.2 | 24.5 | 23.9 | 17.5 |
| Host Marriot |
HMT | 25.6 | 30.9 | 62.8 | 26.9 |
| SkyWest | SKYW | 42.3 | 47.1 | 87.6 | 42.5 |
Please use stops on every trade!