Friday’s Options Alerts…

• December 20, 2001
• TradingMarkets Editors

Stocks took a hit today, taking the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
and the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) back under their psychological numbers. Lower corporate
earnings, Argentina’s economic troubles, and a rejected fiscal stimulus package helped
bring down the market today. Tech stocks were especially hit hard today as
Juniper Networks
(
JNPR |
Quote |
Chart |
News |
PowerRating) and Jabil Circuits
(
JBL |
Quote |
Chart |
News |
PowerRating) issued profit warnings. Helping
to hold up the Dow was the announcement that Comcast
(
CMCSK |
Quote |
Chart |
News |
PowerRating) would buy
AT&T’s
(
T |
Quote |
Chart |
News |
PowerRating) broadband business for $72 billion. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened
in the lower half of its range and closed a little higher than the open. This intra-day shift in sentiment
suggests that fear is now on the rise. The VIX did trigger a CVR
II sell signal today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its half-way
point of the range and closed near its high. This intra-day shift in sentiment is also telling us that fear is
increasing. The VXN did not trigger any CVR signals today.

Points of Significance:

A.C.L.N Limited
(
ASW |
Quote |
Chart |
News |
PowerRating) plummeted 64% on over
24 times
its average trading volume. JP Morgan downgraded the stock today and cut its
price target from $70 to $45. Its options traded over 100 times their average
volume! There is significant activity in the December 25, January 20, and
January 25 puts. Juniper Networks
(
JNPR |
Quote |
Chart |
News |
PowerRating) dropped over 17% today on four times its average trading volume. The
stock has retraced about 50% of the move off its September lows. Juniper warned
that its fourth quarter earnings will be about half of its previous forecast due
to lower telecom spending. Juniper options traded over three times their average
volume. Plexus
(
PLXS |
Quote |
Chart |
News |
PowerRating) fell almost 15% in sympathy with the bad news on
contract manufacturers. After the close, Plexus cut its first quarter earnings
outlook. There is heavy volume in the December and March 25 puts. Jabil Circuits
(
JBL |
Quote |
Chart |
News |
PowerRating) dropped over 14% today on five times its average trading volume. The
stock did manage to find support at its .618 retracement level from the
September lows. Jabil reported that their first quarter profits plunged 82
percent and that next quarter’s earnings would be about half of its previous
forecast. Werner Enterprises’
(
WERN |
Quote |
Chart |
News |
PowerRating) implied volatility has gone to a new
high, making its options expensive.

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!