Thursday’s Options Alerts

• February 20, 2002
• TradingMarkets Editors

After three hard days of
selling, the major averages  looked to continue the trend, but reversed
course midday to end sharply higher. Even the benign CPI report
was not much help as news of a downgrade in
AOL along with investigation in Computer Associates weighed heavily on the
markets.  For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened in the top third of its range and closed near the lows of the day. This shift in intraday
sentiment suggests that fear is beginning to subside. Today’s action in the VIX
triggered a CVR
I buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) displayed similar action as the VIX
and it too triggered a CVR
I buy signal. 

Points of Significance:

Shares of Computer Associates got whacked 17% on
over seven times its average volume. The company got hit today following a
Newsday article which claimed that Computer Associates is under investigation by
the FBI for possible fraud in their accounting practices. CA responded by flatly
denying the allegations. The shares have now fallen below their September 2001
lows — a level not seen since last January. There is heavy activity
in the March 20 and 25 puts.

Biotech issues were sharply higher today led by
IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating). IDEC gained more than 10% on over double its
average volume today. The shares got a boost after they got an earlier-than-expected approval from the FDA for their non-Hodgkin’s lymphoma drug. The
shares reversed course from its pullback from lows and once again stopped near
its .786 retracement level from its Jan. 24 high. There is heavy activity in
the March 25 puts.

Agilent Technolgies
(
A |
Quote |
Chart |
News |
PowerRating) gained 10% on almost
double its average volume. The company reported a smaller-than-expected loss in
their first-quarter earnings. However, Agilent’s CEO Ned Barnholt did come out
and say that they are seeing the first signs of a modest upturn.
There is heavy activity in the March 30 calls.

Abercrombie & Fitch
(
ANF |
Quote |
Chart |
News |
PowerRating) jumped almost
10% on over double its average volume. The casual-apparel maker reported fourth-quarter results that beat expectations by six cents. The shares gapped up and
closed near resistance at its .382 retracement level and its 50-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!