Friday’s Options Alerts
The major market averages
showed good follow through today as news of better-than-expected earnings from
Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) and Merrill Lynch’s upgrade of Intel
(
INTC |
Quote |
Chart |
News |
PowerRating)
sparked buying interest. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its high and closed near
the low of the day. This shift in intra-day sentiment suggests
that fear is continuing to decline. No CVR signals were triggered today. Again
the VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) showed similar
action as the VIX. It too suggests that fear is decreasing. The VXN did not trigger any CVR
signals. However, take caution, as the VXN is at precariously low levels.
Points of Significance:
Invision Technologies
(
INVN |
Quote |
Chart |
News |
PowerRating) rallied out of
a pullback and jumped 14% on heavy average. The
shares were boosted today after Defense Secretary Donald Rumsfeld gave out
warnings of more potential terrorist attacks. Rumsfeld said that America was prone to new
forms of terrorism, from cyber attacks to ballistic missiles and that was why the
Bush Administration is proposing a $48 billion increase in the 2003 defense
budget. There is heavy activity in the February 30 and 35 calls. Implied
volatility is also somewhat low which makes option buying suitable.
Pharmaceutical Product Development
(
PPDI |
Quote |
Chart |
News |
PowerRating)
gained almost 15% on triple its average volume.
The company reported a fourth quarter that increased 27% and matched
expectations. Going forward, the company also raised guidance for fiscal
2002.
Despite reporting better-than-expected earnings,
Electronic Arts
(
ERTS |
Quote |
Chart |
News |
PowerRating) fell 7% on four times its average volume. Excluding
a one-time charge, the company reported third quarter earnings that increased 63%
from a year ago. The shares did gap up on the open but met resistance at its
50-day moving average. There is heavy activity in the February 55 calls and June
50 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 22.84 | DOWN 2.03 |
NONE | 3.71 % Below |
Not at Extreme |
| VXN | 42.76 | DOWN 1.91 |
NONE | 7.80 % Below |
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 |
| Pharmaceutical Product Dev. |
PPDI | + 14.94 | 865 | 195 |
| InVision Technologies |
INVN | + 13.86 |
9100 | 3880 |
| MIM Corporation |
MIMS | – 11.84 | 1820 | 311 |
| Patterson Energy |
PTEN | + 7.32 |
4318 | 1333 |
| Electronic Arts |
ERTS | – 6.73 | 8075 | 3247 |
| Phelps Dodge |
PD | + 6.14 |
1717 | 320 |
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 |
| Sierra Pacific Resources |
SRP | 49.3 | 41.6 | 42.2 | 28.9 |
| Education Management |
EDMC | 49.6 | 42.4 | 62.3 | 44.5 |
| Financial Sector SPDRs |
XLF | 28.1 | 24.2 | 41 | 21.1 |
| Alliance Capital |
AC | 42.3 | 36.5 | 34.7 | 21.5 |
| May Dept. Stores |
MAY | 35.1 | 30.3 | 45.4 | 30.6 |
| MIM Corp. |
MIMS | 86 | 74.9 | 86.7 | 65.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Public Storage | PSA | 18.7 | 24 | 28.3 | 18.2 |
| Atlantic Coast Air |
ACAI | 60.8 | 74.3 | 96.2 | 38.8 |
| American Int’l Group |
AIG | 29.2 | 35.2 | 42.9 | 23.5 |
| Cinergy | CIN | 23.5 | 27.9 | 31.7 | 25.2 |
| Affymetrix | AFFX | 74.8 | 86.3 | 99 | 67.1 |
| Apollo Group |
APOL | 31.8 | 36.6 | 57.8 | 40.3 |
Please use stops on every trade!