Tuesday’s Options Alerts

  • May 13, 2002
  • TradingMarkets Editors

The major indices started off the week
on a positive note as all three indices rallied strongly, but did so on light
volume. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) was the stellar performer today as investors
drove the index up by over 3%. Semiconductor issues were especially strong today
as they jumped almost 6%. The SOX
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) is now back above the 500
level. Also, keep your eyes on Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) as earnings will be
out after the close tomorrow.. 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 near the lows of the day. This shift
in intraday sentiment suggests a decrease in fear. Today’s action triggered a CVR
I buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also opened near its highs and closed
near its lows. This shift
in intraday sentiment suggests that fear is decreasing. The VXN triggered
a CVR II buy signal today. We saw a pretty big decline in fear today, especially
in the tech stocks. However as mentioned above, with Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating)
reporting results tomorrow and Dell
(
DELL |
Quote |
Chart |
News |
PowerRating) on Thursday, we could see more
volatility. 

Points of Significance:

Data storage company Network Appliance
(
NTAP |
Quote |
Chart |
News |
PowerRating) jumped 12% on heavy volume. The shares broke above its downward
channel lines today and popped back up above its 200-day moving average. Network
Appliance will also report results tomorrow. There is heavy
activity in the June 15 puts.

Weight Watchers Int’l
(
WTW |
Quote |
Chart |
News |
PowerRating) 
gained 6% on triple its average volume. The company reported earnings that
increased 70% from the same period a year ago and easily beat expectations by
six cents. However the shares appear to be trading in a head and shoulders top.
Today’s action failed to close above the high of the shoulders.  

Biovail
(
BVF |
Quote |
Chart |
News |
PowerRating) gained 6% on heavy volume. The
announced today that they will buy Merck’s
(
MRK |
Quote |
Chart |
News |
PowerRating) hypertensive and congestive
heart failure drugs. Shares of Biovail received a small pop today but still
remain close to its 52 week low. 

Emulex
(
EMLX |
Quote |
Chart |
News |
PowerRating) gained 3% on below average volume.
No news was announced, but their options traded over triple their average
volume. There is heavy activity in the July 25 puts. 

 

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 23.51 DOWN
1.52		 CVR
I BUY		 0.001% 
Below		 Not
At
Extreme
VXN 46.12 DOWN
4.61		 CVR
II BUY		 1.54
%  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
UAL
Corp.		 UAL +
19.78		 3129 772
Network
Appliance		 NTAP –
12.31		 8298 2380
Retek
Inc.		 RETK +
7.82		 2243 513
CSG
Systems		 CSGS –
7.73		 1505 609
Weight
Watchers		 WTW +
6.72		 2316 124
Biovail BVF +
6.03		 6914 2149

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
NRG
Energy		 NRG 35.3 22.4 71.2 23.1
CMS
Energy		 CMS 52 33.5 35.6 26
Xcel
Energy		 XEL 32.8 22.8 31.8 18.1
Allied
Capital 		 ALD 39.2 31.1 32.5 21.5
Hovanian
Enterprises		 HOV 62.6 51.7 57.3 38.6
Cablevision
Systems		 CVC 81.2 69.8 70.1 40.7

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
TRW
Inc.		 TRW 14 16.2 38.2 18.5
Citigroup C 29.3 33.1 38.6 23.6
Biovail BVF 77 86.7 74.8 33.8
AVX
Corp.		 AVX 37.9 42.6 49.6 36.9
Dover
Corp.		 DOV 26.1 29.2 32.7 21.7
Perfromance
Food Group		 PFGC 34.3 38.3 49.5 34.5

Please use stops on every trade!