Thursday’s Options Alerts

• April 24, 2002
• TradingMarkets Editors

Weakness in tech stocks and mixed
economic data dragged the markets lower today. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) closed
lower for the sixth straight session and is closing in on its February lows.

Despite a disappointing March durable goods report, the major indices drifted
higher in the morning. However, things turned around sharply after the release of
what seemed to be a positive Beige Book report. Internet issues showed strength
today, helped out by better-than-expected earnings from Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating).

Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) were among the biggest losers today as they
cracked below the 200-day moving average. 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 slightly above its open. This intraday shift in
sentiment
suggests that fear is increasing. Again no CVR signals were triggered by the VIX today.
However, the VIX is getting slightly overbought which means that the market is
getting oversold. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)  opened near its highs and closed
near its midpoint. This intraday shift in sentiment suggests a decrease in fear.
Reversing from yesterday’s sell signals, the VXN triggered a CVR
I buy signal. 

Points of Significance:

E-tailing giant Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating)
jumped almost 20% on over triple its average volume. The company reported a
smaller-than-expected first quarter loss late Tuesday and increased its sales
outlook for next quarter. The stock looks ready to challenge its old highs but
there is resistance in the 17.60 area. There is very heavy
activity in the June 17.50 and 20 calls.

Vertex Pharmaceuticals
(
VRTX |
Quote |
Chart |
News |
PowerRating)
lost 18% on six times its average volume. The shares were sliced after the
company reported a first quarter loss that was a penny more than expectations.
Vertex attributed the loss to higher-than-expected R&D costs. The company
also announced that phase II trials of its arthritis drug Aventis showed
that it was not more effective than a placebo. 

InVision Technologies
(
INVN |
Quote |
Chart |
News |
PowerRating) lost
over 20% on five times its average volume. The shares came under pressure today
after the Bush administration reduced plans to buy bomb-detecting devices for
airports. The stock had a bearish key reversal outside day. There is heavy
activity in the May 30 puts.

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!