Thursday’s Options Alerts
The major averages got
a boost today after the better-than-expected retail sales numbers.
Excluding auto sales, January retail sales jumped 1.2% vs. the 0.4%
estimate. This was the biggest jump in almost two years. Better-than-expected
results from Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) helped make chip stocks the strongest
performers today. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near their highs and
closed near their lows of the day. This intraday shirt in
sentiment suggests that fear is declining. Today’s action triggered a CVR
III buy signal. In addition the VIX is approaching oversold conditions which
means that the market is starting to get overbought. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
showed similar action but did not trigger any CVR signals. Both volatility
indices showed a decline in investor fear today as the retail numbers increased
confidence of an economic recovery.
Points of Significance:
ACE Limited
(
ACE |
Quote |
Chart |
News |
PowerRating) gained almost 10% on double
its average volume. Before the open, the company reported earnings of 15 cents
per share, down from 44 cents per share in the same quarter a year ago. However,
the results were in line with estimates. Shares of ACE did break out of a 3-month
base today. There is heavy volume in the March 35 and 45 calls. Implied
volatility is also low.
KLA Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating) hit a new 52-week high on
double its average volume. No specific company news was announced, but chip
stocks were up in sympathy with the earnings news from Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating).
An analyst from J.P Morgan H&Q commented that the results from AMAT
give evidence to our belief that industry fundamentals have likely bottomed and
are showing the initial signs of recovery.
Sunrise Assisted Living
(
SRZ |
Quote |
Chart |
News |
PowerRating) dropped 8% today on
four times its average volume. The shares were under pressure today after a
downgrade from Merrill Lynch. Merrill cut their rating based on concerns
that assisted living service provider’s use of off-balance-sheet structures may
have led investors to overestimate the company’s earnings power. There is heavy
volume in the March 20 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 22.42 | DOWN 1.09 |
CVR III SELL |
10.25 % Under |
At Extreme |
| VXN | 44.17 | DOWN 1.28 |
NONE | 4.64 % 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 |
| Overture Services |
OVER | + 18.98 | 9016 | 2887 |
| ACE Limted |
ACE | + 9.56 |
1580 | 776 |
| Sunrise Assisted Living |
SRZ | – 8.25 | 4708 | 546 |
| KLA Tencor |
KLAC | + 6.75 |
19704 | 9044 |
| Renaissancere LTD |
RNR | + 6.61 | 730 | 176 |
| XL Capital |
XL | + 6.42 |
1230 | 242 |
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 |
| Biomet | BMET | 42.4 | 32.7 | 65.2 | 33.4 |
| Expedia Inc. |
EXPE | 88.2 | 70.4 | 100.2 | 44.7 |
| Chevron Texaco |
CVX | 22.1 | 17.9 | 28.3 | 20.1 |
| News Corp. Limited |
NWS | 36.9 | 31.4 | 48.7 | 29.5 |
| Inco Ltd. | N | 27.7 | 32.9 | 56.9 | 29 |
| Thoratec Labs |
THOR | 55.1 | 48.4 | 83.2 | 49.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Cooper Industries |
CBE | 45.7 | 56.6 | 57.8 | 31.1 |
| Exelon Corp. |
EXC | 28.1 | 34.3 | 43.6 | 28.5 |
| Applied Materials |
AMAT | 50.8 | 62 | 81.2 | 50.2 |
| Wendy’s Int’l |
WEN | 22.8 | 27.6 | 35.5 | 26.4 |
| Nordstrom | JWN | 40..3 | 48.1 | 58.6 | 34.2 |
Please use stops on every trade!