Monday’s Options Alerts…
The
markets had a rough start today as eBay (EBAY)
and Microsoft (MSFT)
both warned about next quarter’s earnings. However the Dow, S&P 500, and the
Nasdaq all came back during the final two hours of trading to close modestly
higher for the day. Today the VIX ($VIX.X)
opened in the upper half of its range and closed near its lows for the day. This
intra-day shift in sentiment suggests that fear is continuing to subside. The
VXN ($VXN.X)
exhibited the same behavior as the VIX ($VIX.X)
as it too opened in the upper half of the range and closed near the lows. Just
like the VIX, this intra-day shift in sentiment also suggest that fear is
subsiding. On another note, the RSI on the VXN ($VXN.X)
downticked today, giving us a CVR
II buy signal.
Points of Significance:
Stocks shrugged off earlier weakness to close
near their highs for the day. QLT Therapeutics (QLTI)
gapped up and broke its 200-day moving average on nine times its average volume.
Scientific Atlanta (SFA)
also gapped up and broke its 50-day moving average on more than double its
average volume. eBay (EBAY)
gapped down on almost triple its average volume and is barely under its 200-day
moving average. In addition, it stopped just shy of its 50% retracement level at
51.88. Implied volatilities for Providian Financial (PVN)
and Georgia Pacific (GP)
hit new highs today. Providian Financial announced a 71% drop in third quarter
earnings and warned of a shortfall in the fourth quarter. Georgia Pacific’s
third quarter earnings dropped by 37% and the company also warned about a
decline for the fourth quarter.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 35.84 | DOWN 1.52 | NONE | .28 % Above | Not at Extreme |
| VXN | 69.28 | DOWN 1.41 |
CVR II BUY |
4.41 % 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 |
| QLT PhotoTherapeutics |
QLTI | + 29 | 831 | 209 |
| Scientific Atlanta |
SFA | + 22.09 |
8610 | 2777 |
| NBTY Inc. | NBTY | – 19.65 | 719 | 200 |
| Manhattan Associates |
MANH | + 18.49 |
313 | 115 |
| Genesis Microchip |
GNSS | + 17.30 | 2962 | 1075 |
| eBay | EBAY | – 12.03 |
49241 | 17726 |
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 |
| Providian Financial | PVN | 127.4 | 93.6 | 86.4 | 42.6 |
| GP Financial |
GPT | 49.4 | 42.4 | 43.3 | 29.9 |
| BE Aerospace | BEAV | 103.4 | 90.5 | 108 | 45.5 |
| Block (HR) | HRB | 42.7 | 37.6 | 44.2 | 27.5 |
| Synovus Financial | SNV | 39.3 | 34.9 | 45.1 | 19.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Ralston Purina | RAL | 15.6 | 21.8 | 49 | 14.7 |
| AT&T Canada |
ATTC | 12.9 | 17.8 | 41 | 10.3 |
| PSS World Medical |
PSSI | 58.9 | 74.3 | 119.3 | 37 |
| Emulex | EMLX | 112.5 | 141.5 | 131.9 | 88.2 |
| Sage Inc. | SAGI | 81.9 | 99.7 | 191.3 | 63.9 |
| Zoran | ZRAN | 103.2 | 124.6 | 139.2 | 73 |
Please use stops on every trade!