Monday’s Options Alerts

• June 7, 2002
• TradingMarkets Editors

What a day!
Despite the huge gap
down from Intel’s lowered revenue revision,
Biogen’s] lowered guidance, and slower-than-expected employment growth, the major averages came back and finished the
day well off their lows. Things looked grim from the start today as Intel
(
INTC |
Quote |
Chart |
News |
PowerRating)
announced after the close Thursday that they would lower their second-quarter
revenue due to weak European demand. The semiconductor index was down over 7% at
its worst levels but finished 2.75% lower for the day. Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating) helped
pushed biotechs to a new 52-week low on an intraday basis as the company cut its
second quarter and full year targets, due to sluggish sales of Avonex. For more information on today’s action, please refer to
the
market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened
near its highs and closed near the lows of the day. This shift
in intraday sentiment shows a big decrease in fear. Today’s action triggered CVR
I and CVR
6 buy signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also gapped up, opened near its
highss
and closed near the lows of the day. This shift in intraday sentiment shows a
decrease in
fear. The VXN triggered a CVR
I and 3 buy signal. The strong reversal today could push the markets higher
next week, but remember we are still in a downtrend.

Points of Significance:

Take Two Interactive
(
TTWO |
Quote |
Chart |
News |
PowerRating) dropped over
13% on over four times its average volume. The company reported second-quarter
earnings that beat estimates by 2 cents and raised full year targets to $1.70 or
3 cents above current consensus estimates. However the company gave a revenue
guidance of $100 million while analysts were expecting $145.6 million. The
company is also trading in a failed ascending triangle pattern. Its implied
volatility is also low which could warrant put buying.

Harmony Gold
(
HGMCY |
Quote |
Chart |
News |
PowerRating)
dropped almost 9% on double its average volume. Gold issues were strong
initially, but ended the day almost 6% lower after the broader market rebounded.
Harmony did fall to an area of support which includes a 50% retracement from its
April 4 low, an uptrendline, and its 50-day moving average.

Broadcom

(
BRCM |
Quote |
Chart |
News |
PowerRating) dropped 5% on
heavy average volume and came near its October lows. Broadcom as well as
other chip stocks, KLA-Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating),
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), and
Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating) could bounce into next week. However, these are
still in downtrends and could be setting up potential shorts.

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!