Friday’s Options Alerts

• February 28, 2002
• TradingMarkets Editors

Despite the better-than-expected GDP report, the
markets ended lower as selling in the tech sector spilled over to the Blue
Chips.

The government reported that the fourth-quarter GDP grew at a
revised rate of 1.4% vs. the expected 0.9%. Tech stocks were weak as network
equipment maker Riverstone Networks
(
RSTN |
Quote |
Chart |
News |
PowerRating) and box maker Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating) came out with earnings
warnings. Only financial and oils were modestly higher for the day. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened and closed near
the middle of its range. There wasn’t a significant change in intraday sentiment
today. No CVR signals were triggered today either. Furthermore, the VIX had an
inside day today and could break out either way. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near
and closed in the top third of its range.
This intraday shift in sentiment also suggests that fear is increasing. The VXN did not trigger any CVR
signals either. Not much could be deciphered from both of the volatility indices
today, however the low VIX reading continued to suggest that caution should be
taken.

Points of Significance:

Shares of Shire Pharmaceuticals
(
SHPGY |
Quote |
Chart |
News |
PowerRating)
dropped over 26% on nine times its average volume. The company warned that sales
of Adderall, its attention-deficit hyperactivity disorder drug, could come under
pressure from the generic competition. Shire’s CEO said that competition and
cost pressures “may compromise the company’s ability to grow in 2002."
The stock is at a two-and-half year low and is breaking down from a descending
triangle on the weekly chart.

On a bright note, Echostar
Communications
(
DISH |
Quote |
Chart |
News |
PowerRating) jumped over 10% on triple its average volume. The
reported a narrower-than-expected fourth-quarter loss and subscriber growth that
was on the high end of expectations. The shares closed above the coincidence of
two Fibonacci levels. First, it broke above a .618 from its Jan. 29 high.
The second is a .50 retracement from its Jan. 8 high.

Marvell Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating) dropped
10% on double its average volume in regular session. In after-hours action, the
shares gained 2% after reporting earnings that beat estimates by a penny. The
shares have had three unsuccessful attempts to break above its .382 retracement
There is heavy activity in the March 30 puts.

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!