Monday’s Options Alerts
For the third straight day, the markets staged a late afternoon reversal. Negative
news from Computer Associates and J.P. Morgan kept buyers at bay for most
of the session but then buyers dominated during the final two hours of trading.
Oil stocks were the strongest sector of the day while airline and Internet
issues were the weakest. For more information on today’s action, please refer to
the
market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near
in the top third of its range and closed near its lows of the day. This shift in intraday
sentiment suggests that fear is subsiding. Today’s action triggered another CVR
I buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near the high end of its range
and closed in the lower half of its range.
This intraday shift in sentiment also suggests that fear is decreasing. The VXN
also triggered another CVR
I buy signal.
Points of Significance:
Computer Associates
(
CA |
Quote |
Chart |
News |
PowerRating) continued
its plummet and dropped another 15% today. The company confirmed that the SEC
and the U.S. Attorney’s office were conducting a preliminary investigation,
but Computer Associates had no idea what the probe was about. However, there
is heavy volume in the April 17.50 calls.
Circuit City Stores
(
CC |
Quote |
Chart |
News |
PowerRating) dropped
almost 30% on over eight times its average volume. The company announced that it
will spin off CarMax, its used cars division. Circuit City also said that sales
in January and February were below expectations and that its fourth-quarter
earnings will be slightly below expectations. The shares sliced through its
200-day moving average and its .618 retracement level. Next potential support
level could be at its .786 retracement at 14.22.
Shares of drug maker Andrx Group
(
ADRX |
Quote |
Chart |
News |
PowerRating)
fell 18% on eight times its average volume. The company reported disappointing
fourth-quarter results due to regulatory and legal complications that delayed
the introduction of several of its drugs. The shares have broken down from a
triangle on the weekly chart. There is heavy activity in the April 35 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 24.89 | DOWN 0.93 |
CVR I Buy |
2.68 % Above |
Not at Extreme |
| VXN | 48.57 | UP .49 |
CVR I Buy |
4.92 % Above |
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 |
| Circuit City Stores |
CC | – 29.84 |
6922 | 2156 |
| Andrx Corp. |
ADRX | – 17.95 |
11737 | 4519 |
| Computer Associates |
CA | – 15.39 |
26678 | 6888 |
| CIMA Labs |
CIMA | – 14.22 |
765 | 182 |
| Guidant | GDT | – 10.18 |
3013 | 965 |
| Dillards Inc. |
DDS | + 8.21 |
1978 | 553 |
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 |
| Dominion Resources |
D | 31.7 | 23.7 | 30.8 | 21.1 |
| Computer Associates |
CA | 110.5 | 89.9 | 74.8 | 44.4 |
| Autozone | AZO | 47.1 | 39.3 | 50.5 | 35.2 |
| Northrop Grumman |
NOC | 35.7 | 30.1 | 40.4 | 24.3 |
| Med-Design | MEDC | 100.4 | 86.7 | 107.3 | 82.7 |
| Monsanto | MON | 39.4 | 34.1 | 42.1 | 34.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Industrial Sector SPDR |
XLI | 25 | 44 | 42.3 | 21.9 |
| TECO Energy |
TE | 16.2 | 21.1 | 31.1 | 21.9 |
| Dal-Tile Int’l |
DTL | 23.9 | 29.1 | 33.3 | 27.1 |
| Timberland | TBL | 37.5 | 43.9 | 56.7 | 37.4 |
| UST Inc. |
UST | 19.1 | 22.3 | 33.7 | 22.5 |
| MidCap SPDR |
MDY | 20 | 23.3 | 29.5 | 18.2 |
Please use stops on every trade!