Thursday’s Options Alerts

• May 8, 2002
• TradingMarkets Editors

Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) saved the
day, reporting better-than-expected earnings late yesterday. Positive news
from Cisco ignited the major averages as the Nasdaq rocketed well
over 7%, the Naz’s biggest one-day point gain in over a year. The Dow
and S&P both gained over 3% for the day. Networking stocks led the way today
as they gained over 12%
(
$NWX.X |
Quote |
Chart |
News |
PowerRating). Gold stocks were the only losers of the
day as the
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) dropped 0.75%. 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 slightly above its midpoint. This shift
in intraday sentiment suggests a decrease in fear. The VIX didn’t trigger any
more
CVR signals today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
also opened near its highs and closed near the lows of the day. This shift
in intraday sentiment suggests a big decrease in fear. Today’s action
triggered a CVR II buy signal. We got the bounce in a big way today in the tech
stocks. The VXN was stretched over 12% above its 10-day moving average for
a couple of days. However, remember that we are still in a downtrend and this
bounce could set up shorting opportunities.

Points of Significance:

Emulex
(
EMLX |
Quote |
Chart |
News |
PowerRating) jumped 27% on heavy
volume today.
The company came out and reaffirmed fourth quarter earnings of 16 cents a share
for their fourth quarter. The shares are coming out of a failed descending
triangle. However there is still heavy resistance ahead at the coincidence of
its 50-day moving average and its .618 retracement level. There is heavy
activity in the June 30 puts.

Cisco System
(
CSCO |
Quote |
Chart |
News |
PowerRating) jumped 24% on over
double its average volume. Cisco’s rise sparked a broad-based rally as the company reported earnings
that beat estimates. Cisco earned 10 cents a share compared with a 37 cents a
share loss last year. However John Chambers was still cautious about the
upcoming quarters as he said that firms are still waiting on the sidelines for
better financial conditions before dishing out money for IT
spending.

Enzon
(
ENZN |
Quote |
Chart |
News |
PowerRating) jumped 13% on over
five times its average volume. The company reported third quarter earnings that
beat expectations by 2 cents. The shares, which have been in a free fall
recently, hit a new 52 week low but later reversed course. There is heavy
activity in the June 30 calls.

Semiconductor HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating) gained
over 11% on almost double their average volume. Semiconductors were among the
best performers of the day as the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) broke back above the 500
resistance level. The SMH does have resistance ahead at the coincidence of its
.50 retracement and its 200 day moving average.

Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!