Thursday’s Options Alerts

  • January 23, 2002
  • TradingMarkets Editors

Better than expected
results from Dupont
(
DD |
Quote |
Chart |
News |
PowerRating) and Exxon Mobil
(
XOM |
Quote |
Chart |
News |
PowerRating), along with a string of
upgrades in semiconductor stocks sparked a broad based rally today. Dow
component Dupont posted earnings that exceeded expectations and they also gave a
very optimistic outlook for their first quarter. Chip stocks such as Applied
Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), KLA-Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating), Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating), and
Teradyne
(
TER |
Quote |
Chart |
News |
PowerRating) were upgraded by J.P. Morgan to “long term buy." For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near the top third of its range and
closed near the lows of the day This shift in intra-day sentiment suggests that fear is
declining. The action in the VIX triggered a CVR
I buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) exhibited the same action as the VIX. This shift in intra-day
sentiment also suggests that fear is declining. The VXN also triggered a CVR
I buy signal. Today’s good news from Dupont and Exxon Mobil, along with the
first increase in over a year in the semiconductor book to bill ratio, calmed
investors’ fears.

Points of Significance:

Mercury Interactive
(
MERQ |
Quote |
Chart |
News |
PowerRating) shot up over 22% on
four times its average volume. Mercury reported fourth quarter earnings that
exceeded expectations. They also said that they were seeing a strong flow of
large orders. There is heavy activity in the February 30 calls and February 35
puts.

McData
(
MCDT |
Quote |
Chart |
News |
PowerRating) jumped 16% today on
triple its average volume. The company announced that Rice University chose its
SANavigator 2.5 software to monitor and manage switches that are used for campus
events and instructional videos. There is heavy activity in the
February 25 puts. Its implied volatility is somewhat low.

Peoplesoft
(
PSFT |
Quote |
Chart |
News |
PowerRating) jumped 8% on heavy volume today
ahead of its earnings report which will be out after tomorrow’s close. The stock
is pulling back from recent lows. There
is heavy activity in the February 35, 37.50, and 40 calls as well as February 35
and 40 puts. Its implied volatility is also low.

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 23.66 DOWN
1.44		 CVR
I BUY		 2.23
% Above		 Not At Extreme
VXN 48.15 DOWN
2.22		 CVR
I BUY		 1.07
% 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
Mercury
Interactive		 MERQ + 22.43 12596 4533
McData MCDT +
16.77		 9686 1135
AsiaInfo ASIA – 12.22 795 244
Amdocs
Ltd.		 DOX +
11.34		 5270 2572
Inrange
Technologies		 INRG + 10.49 463 230
Peoplesoft PSFT +
8.51		 19572 7295

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
Affiliated
Computer Serv.		 ACS 43.4 34.4 45.2 31.3
Bausch
& Lomb		 BOL 43.1 34.3 51.3 33.7
Canadian
National Railway		 CNI 34.6 30.2 42.8 25.6
Saks SKS 50.4 60.9 70.4 43.2
Electronics For
Imaging		 EFII 56.4 51 79.3 48.7
PepsiAmericas PAS 35.5 32.4 38.9 32.4

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Emulex EMLX 76.2 92.2 125.2 85
IDEC
Pharmaceuticals		 IDPH 50 57.9 82.8 54.7
CSX Corp. CSX 27.3 31.5 43.6 30.9
Extreme
Networks		 EXTR 82.3 94.4 130.2 90.2
Computer
Associates		 CA 42.3 48 74.8 45.4
Biomet BMET 35.8 40.5 65.2 38.7

Please use stops on every trade!