Monday’s Options Alerts
Dell’s earnings, positive consumer
sentiment, and upbeat data from the semiconductor industry helped sparked
today’s hard-fought rally. Despite today being options expiration, volume was
relatively light. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) went on to its fifth consecutive
high, while the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) showed modest
gains. Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating) reported first-quarter results that
beat expectations
by a penny on slightly higher revenues. The company also expected “some
pickup” later in the year, but Dell did not raise guidance. The University
of Michigan’s consumer sentiment index jumped to a reading of 96 from 93.
Lastly, Semiconductor Equipment and Materials International reported a fifth
consecutive increase in orders. For more information on today’s action, please refer to
the market
recap.
Volatility continued to take a
pounding today. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near
its highs and closed near its lows. This shift in intraday
sentiment again suggests a decrease in fear. Today’s action triggered a CVR
III sell signal. Volatility is getting stretched to extremes, it could be a
good time to use put options. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its highs and closed near
its lows. This shift in intraday sentiment also suggests a
decrease in fear. No CVR signals were triggered by the VXN today.
Points of Significance:
Shares of America Online
(
AOL |
Quote |
Chart |
News |
PowerRating)
jumped more than 5% today. The company is expected to announce another
round of layoffs next week. AOL has laid off more than 2,000 people in the last
year-and-a-half due to slower growth. Shares of AOL did stall near its .618
retracement from its April high. Failure to get through this area of resistance
could represent an opportunity to purchase puts.
PacifiCare Health Systems
(
PHSY |
Quote |
Chart |
News |
PowerRating)
gained almost 10% on almost triple its average volume. The shares broke out of a
small area of consolidation. On a weekly chart, the stock is breaking out of a
cup and handle. There is heavy activity in the June 25 calls.
Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) gained almost 3% on
double its average volume. The shares of the electronics retailer are staging a
counter trend rally. BBY has run into resistance near a confluence of a couple
of Fibonaaci relationships. There is also heavy activity in the June 50 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 20.28 | DOWN 1.17 |
CVR III SELL |
12.28% Below |
At Extreme |
| VXN | 42.94 | DOWN 1.58 |
NONE | 8.07 % Below |
Near Extreme |
Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| MIM Coporation |
MIMS | – 33.01 |
1517 | 422 |
| Dell Computer |
DELL | + 0.35 |
62998 | 15998 |
| Pacificare Health Systems |
PHSY | + 9.98 |
628 | 197 |
| America Online |
AOL | + 5.71 |
44857 | 20361 |
| Cabot Microelectronics |
CCMP | – 4.37 |
7007 | 779 |
| General Electric |
GE | + 4.53 |
181020 | 14555 |
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 |
| TECO Energy |
TE | 38.3 | 26.3 | 28 | 15.9 |
| American Capital Strategies |
ACAS | 32.7 | 24 | 42 | 22.4 |
| Golden State Bancorp |
GSB | 41.9 | 32.9 | 34.7 | 21.1 |
| Agrium | AGU | 30.5 | 25.3 | 40.3 | 25.9 |
| Cinergy | CIN | 21.1 | 18.3 | 29.7 | 16.5 |
| Duke Energy |
DUK | 38.7 | 33.8 | 46.7 | 25.3 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Dell Computer |
DELL | 39 | 81.1 | 49.1 | 38.7 |
| Electro Scientific Industries |
ESIO | 50.3 | 83.5 | 52.2 | 49.2 |
| Telefonos de Chile |
CTC | 29.1 | 34.7 | 37.7 | 26.1 |
| Analog Devices |
ADI | 49.8 | 57.8 | 68.2 | 47 |
| Regis Corp. |
RGIS | 26.9 | 31 | 44.7 | 28.3 |
| Schering Plough |
SGP | 40.2 | 45.7 | 43 | 29 |
Please use stops on every trade!