Thursday’s Options Alerts
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The sell-off continued today as stocks were down across the board. The March
Services Index from the Institute of Supply Management dropped slightly to 57.3%
compared with last month’s reading of 58.7%. Despite the decline, the fact that
the index stayed above the 50% mark still suggest that the economy is still in
expansion mode. No sectors escaped the carnage today. Tech stocks such as
software, semiconductors, and networkers were among the biggest losers once
again as they were victims of profit warnings and downgrades. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near the bottom of its range and near its midpoint.
This shift in
intraday sentiment suggests that fear is continuing to increase. No CVR signals
were triggered by the VIX today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its lows and closed near its highs. This shift in intraday sentiment also
suggests that fear is increasing as bad news is continuing to surface on tech
stocks. No CVR signals were triggered today. Volatility is screeching higher
during this decline. We are getting slightly oversold, therefore a bounce could
be likely.Â
Points of Significance:
WebMethods
(
WEBM |
Quote |
Chart |
News |
PowerRating) bucked the
trend today and jumped over 11% on four times its average volume. The maker of infrastructure
software announced today that they expected their fourth quarter loss to be
smaller than expected. There is increased
activity in the July 22.50 calls.
Contributing the to weakness in the
software sector,database software maker Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating)
dropped over 8% on heavy volume. The company was downgraded today due to issues
regarding lower IT spending and valuation concerns. Shares of Siebel broke below
its 200-day moving average and is testing support on its weekly chart.Â
Vertex Pharmaceuticals
(
VRTX |
Quote |
Chart |
News |
PowerRating)
dropped 6.5% on heavy volume today. Vertex is breaking down after meeting
resistance at its 200-day moving average. The stock was one of the worst
performers among biotech issues today. However there is very heavy activity in
the May 30 calls.Â
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.64 | UP 0.96 |
NONE | 7.45% Above |
Not at Extreme |
| VXN | 41.03 | UP 1.71 |
NONE | 3.34 % Below |
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 |
| WebMethods | WEBM | + 11.11 |
921 | 365 |
| Siebel Systems |
SEBL | – 8.86 |
36644 | 15981 |
| Direct Focus |
DFXI | – 8.22 |
2271 | 655 |
| Retek, Inc. |
RETK | – 6.76 |
1413 | 384 |
| Research In Motion |
RIMM | – 6.61 |
3361 | 1533 |
| Vertex Pharmaceuticals. |
VRTX | – 6.49 |
1605 | 134 |
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 |
| Financial Sector SPDRs |
XLF | 15.7 | 11.8 | 28.4 | 17.4 |
| Robert Half Int’l |
RHI | 36.5 | 28.1 | 50.2 | 27.8 |
| Bear Stearns |
BSC | 32.2 | 25.6 | 40.7 | 26.7 |
| Sara Lee |
SLE | 24 | 19.9 | 28.1 | 19.4 |
| Express Scripts |
ESRX | 42 | 35.9 | 67.2 | 30.4 |
| Gillete | G | 19.8 | 17 | 33.4 | 19.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Reckson Associates |
RA | 19.2 | 27.4 | 35.1 | 27.1 |
| C.H. Robinson |
CHRW | 23.8 | 27.5 | 35.8 | 23.9 |
| Energy East Corp. |
EAS | 22.8 | 25.9 | 32 | 24.1 |
| Roslyn Bancorp |
RSLN | 24.2 | 27.4 | 38.8 | 24.3 |
| Expedia Inc. |
EXPE | 43.5 | 49.2 | 88.5 | 44.7 |
| Consolidated Edsion |
ED | 17 | 19.2 | 23.1 | 17.5 |
Please use stops on every trade!