Friday’s Options Alerts
After yesterday’s impressive
turnaround, we had another turnaround of sorts today.
The
markets diverged early on as warnings from Ciena and Bellsouth, as well as a
downgrade of Intel dragged tech issues lower. However, the broader market stayed
positive for most of the session help out by the plethora of economic data. Then
everything turned around in the final hour as the selling spilled over. For more information on today’s action, please refer to
the market
recap.Â
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near the midpoint of the range and closed near
their highs. This shift in intraday
sentiment suggests that fear is increasing. No CVR signals were triggered by the
VIX. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) showed similar action as the VIX.
This intraday shift in sentiment also suggests that fear is increasing. The VXN did not trigger any CVR
signals either. Both volatility indices shot up today as investors fear
declining corporate earnings in the tech sector.
Points of Significance:
Following the downgrade of Intel, chip stocks
were under pressure and Altera was no exception. The stock dropped over 10% on
almost double its average volume. The shares continue to break down from a
triangle pattern and is once again approaching potential support at its .618
retracement level. Implied volatility is low, which could warrant put buying.
The nation’s largest insurance company Aetna
(
AET |
Quote |
Chart |
News |
PowerRating)
gained 5% on almost four times its average volume Despite reporting a fourth
quarter loss that was worse than expected, the company said that it would return to profitability in 2002. The shares gapped down on the open and
later bounced off support at its .50 retracement level from its September
2001 lows. There is heavy activity in the March 35 puts.
CDW Computer Centers
(
CDWC |
Quote |
Chart |
News |
PowerRating) dropped 6% on
double its average volume. The shares
are testing the bottom of its month-long base.
There is heavy activity in the March 50 calls.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 25.72 | UP 1.46 |
NONE | 4.76 % Above |
Not at Extreme |
| VXN | 48.06 | UP 1.38 |
NONE | 3.29 % 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 |
| Storage Technology |
STK | – 16.89 | 1406 | 474 |
| Altera | ALTR | – 10.64 |
6032 | 2445 |
| Cox Communications |
COX | + 8.65 | 2474 | 681 |
| Myraid Genetics |
MYGN | – 8.28 |
1465 | 351 |
| CDW Computer Center |
CDWC | – 6.20 | 1380 | 644 |
| Aetna Inc. |
AET | + 5.08 |
9798 | 2575 |
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 |
| FirstEnergy | FE | 31.4 | 24 | 30 | 22.5 |
| HCC Insurance Holdings |
HCC | 33.7 | 26.8 | 34.6 | 27.3 |
| Public Service Enterprise |
PEG | 28.3 | 23.2 | 26.5 | 23.4 |
| Duke Weeks Realty |
DRE | 24.4 | 20.1 | 30.4 | 19.6 |
| Choice Point | CPS | 28.1 | 23.8 | 30.3 | 22.4 |
| Applied Materials |
AMAT | 59.7 | 51 | 81.2 | 50.2 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Dal-Tile Int’l |
DTL | 22.8 | 30.6 | 33.3 | 27.1 |
| Regis Corp. |
RGIS | 25.6 | 31.7 | 44.7 | 30.5 |
| Cross Timbers Oil |
XTO | 34 | 42.1 | 62.6 | 44 |
| Greater Bay Bancorp |
GBBK | 37.4 | 45.8 | 55.4 | 34.5 |
| Roslyn Bancorp |
RSLN | 25.6 | 30.4 | 41.2 | 27.5 |
| Mid Atlantic Medical Services |
MME | 20.2 | 22.9 | 31.6 | 24.7 |
Please use stops on every trade!