Monday’s Options Alerts
After five consecutive days of
losses, the major market averages turned it around in final hour of trading. Early
weakness in shares of Honeywell
(
HON |
Quote |
Chart |
News |
PowerRating) dragged the markets lower. However, upgrades in
certain financial and tech stocks as well as news of Steven Case buying a
million shares of AOL Time Warner
(
AOL |
Quote |
Chart |
News |
PowerRating) helped propel the market higher.
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 of the day and closed
near its lows. This shift in intraday sentiment suggests that fear is cooling
off after rising for the better part of this week. No new CVR signals were
triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) exhibited the same behavior as the VIX. This intraday shift in sentiment also suggests that
fear is starting to cool. The VXN did not trigger any CVR signals. Both
volatility indices are beginning to unwind after a treacherous week. The
volatility indices finally came out of their overbought conditions. With all
major indices closing at their highs, we could see more follow through next
week.
Points of Significance:
Veeco Instruments
(
VECO |
Quote |
Chart |
News |
PowerRating) fell out of a head-and-shoulders and dropped almost 9% on over six times its average volume. The company
posted a loss for its fourth quarter and cut its outlook for the first quarter.
Veeco posted a loss of 50 cents per share vs. a profit of 21 cents per share
one year ago. The company attributed the weakness to worldwide demand, excess
inventory, and increased job-cutting costs. In addition, the company warned that
it will post a loss for its first quarter. There is heavy activity in the March
25 puts.
Brocade Communications
(
BRCD |
Quote |
Chart |
News |
PowerRating) broke its four-day losing streak and gained over
6% for the day. The shares did
briefly break below their .382 retracement level from its September lows. There is
heavy activity in the February 25 and 30 puts.
Sungard Data Systems
(
SDS |
Quote |
Chart |
News |
PowerRating) gained over 6% today on almost double its average volume. The shares were boosted today
after an upgrade from Prudential. Prudential also upped its price target from $27
to $40. There is heavy activity in the July 30 calls. In addition, the
volatility on the July is somewhat low.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 25.50 | DOWN 2.18 |
None | .005 % Above |
Not At Extreme |
| VXN | 49.28 | DOWN 1.62 |
None | 6.94 % 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 |
| Manhattan Associates |
MANH | + 21.88 | 618 | 136 |
| Cell Therapeutics |
CTIC | + 10.74 |
27536352 | 10903 |
| Veeco Instruments |
VECO | – 8.87 | 1154 | 229 |
| Brocade Communications |
BRCD | + 6.66 |
5637 | 2112 |
| Sungard Data Systems |
SDS | + 6.27 | 1017 | 252 |
| Invitrogen | IVGN | + 5.08 |
2372 | 750 |
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 |
| Ameripath | PATH | 54.2 | 39.9 | 56.1 | 40.1 |
| Emmis Communication |
EMMS | 60.7 | 49.6 | 75.1 | 49.9 |
| Qualcomm | QCOM | 77.8 | 63.9 | 80.5 | 53.2 |
| Expedia | EXPE | 69.9 | 59.0 | 100.2 | 44.7 |
| Nordstrom | JWN | 46.9 | 40.4 | 58.6 | 34.2 |
| DPL Inc. |
DPL | 26.2 | 22.6 | 27.9 | 21.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Reckson Associates Realty |
RA | 20.5 | 27.7 | 35.1 | 21.5 |
| Kinder Morgan Energy |
KMP | 43.2 | 54.2 | 32.3 | 20.2 |
| Energy Sector SPDR |
XLE | 19.0 | 23.4 | 32.7 | 20.6 |
| Russell 2000 Index Shares |
IWM | 22.2 | 27.1 | 23.3 | 20.7 |
| Old Republic | ORI | 23.6 | 28.7 | 36.6 | 27.6 |
| Daimler Chrysler |
DCX | 36.2 | 42.7 | 55.3 | 27.6 |
Please use stops on every trade!