Monday’s Options Alerts
Stocks rallied strongly on the news of a much-better-than-expected employment report.
Non farm payrolls in February increased
by 66,000, far surpassing the the projected 12,000 level — the first rise
in seven months. Meanwhile, the unemployment rate dropped to a five-month low as
it fell to 5.5% from 5.6% last month. This latest batch of news is seen as evidence that
the
labor market and the economy is strengthening.
Tech stocks were especially strong after Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating) reaffirmed earnings. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near
its highs and closed near its lows. This shift in intraday sentiment suggests
that fear is dropping. No CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its high and
closed near its low. This intraday shift in sentiment also suggests fear is
dropping. No CVR signals were triggered by the VXN. Investor fear dropped today
as the better-than-expected employment report pointed to a rising economy.
However the VIX is getting more oversold (i.e., market is overbought) and it is
again in precariously low levels. Don’t fight the tape, but stay near the exit
door.
Points of Significance:
Shares of railroad operator Norfolk
Southern
(
NSC |
Quote |
Chart |
News |
PowerRating) dropped 6% on over double its average volume. The shares did
manage to bounce off some support at its .382 retracement level. On Wednesday,
an analyst from Deutsche Banc Alex. Brown pounded the table on railroad stocks
as he believes that they will benefit from the economic recovery before other
industries. However, there is heavy activity in the March 25 puts.
Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating) fell over 8% on
over five times its average volume. The shares came under pressure today as the
FDA approved rival Serono’s multiple sclerosis drug. The shares are trading in a big-picture descending triangle on the weekly chart.
Americredit
(
ACF |
Quote |
Chart |
News |
PowerRating) gained over 16% on
triple its average volume. The shares have gained almost 50% since the beginning
of this month. There is also heavy call activity in the March 30 and 35 calls.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.54 | DOWN .41 |
NONE | 3.84 % Below |
Not at Extreme |
| VXN | 41.64 | DOWN 2.12 |
NONE | 4.09 % 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 |
| Americredit | ACF | + 16.85 |
9387 | 4198 |
| Cytyc | CYTC | + 10.26 |
4028 | 1116 |
| Biogen | BGEN | – 8.42 |
260330 | 4929 |
| TMP Worldwide |
TMPW | + 9.42 |
6103 | 1737 |
| Norfolk Southern |
NSC | – 5.82 |
2789 | 571 |
| Schering Plough |
SGP | – 5.45 |
28207 | 7303 |
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 |
| Albany Molecular Research |
AMRI | 74.7 | 55.3 | 89.4 | 56.3 |
| Zale | ZLC | 46 | 36.7 | 45.2 | 36 |
| Textron | TXT | 28.9 | 23.5 | 52.4 | 28.4 |
| Accredo Health |
ACDO | 55.5 | 46.5 | 73 | 47.4 |
| Sepracor | SEPR | 93.2 | 79.8 | 76.8 | 57.8 |
| Travelocity.com | TVLY | 23 | 19.8 | 116.4 | 17.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Intel | INTC | 39.9 | 47.1 | 70.5 | 39.4 |
| Thoratec Labs |
THOR | 63.2 | 74.4 | 83.2 | 49.6 |
| American Capital |
ACAS | 30.3 | 35.1 | 42 | 30.6 |
| Cemex | CX | 29.6 | 33.4 | 35.2 | 27.1 |
| Thermo Electron |
TMO | 35.1 | 39.3 | 59.2 | 37.3 |
| Gap Inc. |
GPS | 52.4 | 58.4 | 70 | 53.1 |
Please use stops on every trade!