Tuesday’s Options Alerts
The major market averages put in a strong rally today,
as
positive news of the war in Afghanistan and better-than-expected-earnings from
Lowes
(
LOW |
Quote |
Chart |
News |
PowerRating) rolled in. Investors are continuing to buy stocks on the hopes
that the war is drawing near a conclusion and that the economy is near a
recovery. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened right on its highs closed near its lows of the
day. Once again, this intraday shift in sentiment is still telling us that fear is
continuing to subside. The action in the VIX today triggered a CVR III and
CVR VI sell signals. However, we are getting even more overbought and getting closer to a
CVR II sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) exhibited
similar action as the VIX. The VXN’s intraday action also showed that
fear is continuing to subside. The VXN triggered a CVR III sell signal
today. Both volatility indices are in overbought territory, but as we’ve seen
over the last week, overbought can become more overbought.
Points of Significance:
Airline stocks put in a solid performance today
as the
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) rallied over 10%. U.S. Air Group
(
U |
Quote |
Chart |
News |
PowerRating) soared over 23% on
four times its average daily trading volume as it is attempting to fill in the
gap left by the September 11th attacks. Options activity was heavy as it traded
over seven times its average contract volume. UAL Corp
(
UAL |
Quote |
Chart |
News |
PowerRating) gained over 17% today on three times its average
trading volume. However, the stock did meet resistance at its 50-day moving
average. Options volume was heavy as it traded over three times its average
contract volume. BJ’s Wholesale Club
(
BJ |
Quote |
Chart |
News |
PowerRating) continued its descent on six times
its average trading volume. Its implied volatility is at a new high, which
suggests that option premiums are getting pricey.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 25.64 | – 1.53 | CVR III, VI | 10.94 % Under | At Extreme |
| VXN | 50.83 | – 4.21 | CVR III | 10.26 % Under |
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 |
| U.S. Air Group | U | + 23.38 | 3947 | 450 |
| UAL Corp. |
UAL | + 17.41 |
5898 | 1754 |
| Netegrity | NETE | + 13.24 |
1357 | 434 |
| BE Aerospace |
BEAV | + 13.04 |
606 | 222 |
| Rambus Inc. | RMBS | + 12.34 | 8097 | 1670 |
| McData | MCDT | + 11.84 |
728 | 336 |
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 |
| BJ’s Wholesale Club | BJ | 47.5 | 41.5 | 44.7 | 32.9 |
| TiVo Inc | TIVO | 103 | 92.9 | 129.4 | 82.3 |
| CSG Systems Int’l | CSGS | 59 | 53.4 | 76.6 | 48.7 |
| Precision Drilling | PDS | 56 | 50.8 | 52.7 | 40.9 |
| United Microelectronic | UMC | 102.7 | 93.3 | 113.4 | 66.2 |
| Wendy’s Int’l | WEN | 29.6 | 26.9 | 35.5 | 27.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| NPS Pharmaceuticals | NPSP | 54.6 | 67.4 | 90.6 | 68.2 |
| McGraw Hill | MHP | 28.2 | 34.6 | 39.9 | 22.3 |
| Niagara Mohawk Power |
NMK | 23.1 | 28 | 36.2 | 15.8 |
| Orchid Biosciences | ORCH | 110.4 | 133.5 | 128.7 | 97.5 |
| Sirius Satellite Radio | SIRI | 124.6 | 145.9 | 149.8 | 89.5 |
| KeyCorp | KEY | 29.1 | 33.9 | 38.1 | 24.5 |
Please use stops on every trade!