Tuesday’s Options Alerts
The markets roared higher today on the much better than expected existing
home sales and several positive pieces of corporate news. Existing homes
sales in January rose 16.2% to a record 6.04 million, this was the biggest
increase since 1968. Stocks were boosted after a barrage of positive news from
the likes of Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating), General Motors
(
GM |
Quote |
Chart |
News |
PowerRating), Williams Sonoma
(
WSM |
Quote |
Chart |
News |
PowerRating), and Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating). For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened on its
highs and closed near its lows for the day. This shift in intraday
sentiment suggests that fear is decreasing. No CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) showed similar action to the
VIX but it closed right on its lows.
This intraday shift in sentiment also suggests that fear is increasing. The VXN did not trigger any CVR
signals either. Both volatility dropped lower today as the indices rallied in
the face of the positive economic and corporate news. The drop in fear was more
evident in tech issues as they have been pummeled over the last week.
Points of Significance:
Shares of Dow component Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating)
jumped over 6% on triple its average volume. The shares benefited from an upbeat Barron’s article citing that Caterpillar is in good position to benefit from the
economic recovery. There is heavy activity in the May 55 calls.
Marvell Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating) gained
6.25% on heavy volume. The shares are pulling back from lows and is near the
coincidence of a couple of Fibonacci retracement levels. The first is a .618
retracement from its Feb. 13 high. And it is also near a .382 retracement
from the Jan. 28 high. There is heavy put activity in the March 35, 37.50,
and 40 puts.
Viropharma
(
VPHM |
Quote |
Chart |
News |
PowerRating) had a key
reversal day. Its implied volatility is also at a new six-month high.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 23.31 | DOWN 1.58 |
NONE | 3.03 % Below |
Not at Extreme |
| VXN | 44.07 | DOWN 4.50 |
NONE | 3.58 % 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 |
| FTI Consulting |
FCN | + 9.10 |
2644 | 537 |
| Ryland Group |
RYL | + 7.25 |
821 | 316 |
| Novellus Systems |
NVLS | + 7.00 |
6395 | 3082 |
| Human Genome Sciences |
HGSI | – 6.92 |
3946 | 1921 |
| Caterpillar | CAT | + 6.41 |
3846 | 1325 |
| Marvell Technology |
MRVL | + 6.25 |
7618 | 2381 |
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 |
| Viropharma | VPHM | 111 | 85.6 | 82 | 64.3 |
| International Flavors & Fra. |
IFF | 31.2 | 25.1 | 37.9 | 24.8 |
| KeyCorp | KEY | 26.6 | 22.4 | 38.1 | 22.7 |
| Affiliated Computer Services |
ACS | 49.4 | 417 | 45.2 | 31.3 |
| Digene | DIGE | 46.5 | 40.9 | 90.1 | 45.4 |
| Williams Company |
WMB | 74.5 | 67.3 | 84.7 | 38 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Energy Sector SPDR |
XLE | 19.2 | 25.6 | 32.7 | 21.7 |
| Conoco, Inc. |
COC | 25.6 | 32.8 | 37.1 | 31.8 |
| United Therapeutics |
UTHR | 67.8 | 84.4 | 142.7 | 68.3 |
| Spanish Broadcasting |
SBSA | 48.8 | 58.1 | 96.3 | 55.1 |
| Torchmark Corp. |
TMK | 18.2 | 21.1 | 38.9 | 20.5 |
| Tyco International |
TYC | 66.7 | 76 | 109.3 | 28.7 |
Please use stops on every trade!