Wednesday’s Options Alerts
The major averages bounced from their
severely oversold conditions thus putting a halt to their recent losing streak.
Defense, paper, Internet, and chip stocks were winners today. Biotech issues
were also big gainers and could be setting up possible shorts. On the economic
front, consumer confidence slipped, but the number still came in above consensus
estimates. April consumer confidence index retreated to 108.8 from 110.7,
however this was still higher than expectations of 108. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) closed near the bottom of the range.
Once again, fear is decreasing as the VIX spent majority of the day working its way
down. Today’s action triggered both CVR
I and II buy signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)Â opened near the top
third of its range and closed near the midpoint of its range. This intraday shift in sentiment
also suggests that fear is decreasing. The VXN also triggered CVR
I and II buy signals today. Volatility finally subsided today after six
higher closes. With the two additional CVR buy signals, look for more follow
through. Â
Points of Significance:
Alliance Gaming
(
ALLY |
Quote |
Chart |
News |
PowerRating) gained 9% on
almost five times its average volume. Shares of Alliance came into play today as
CIBC upgraded the stock to “Strong Buy” from “Buy.” CIBC
attributed the recent downside action to worries over declining earnings. The
stock is now trading in a failed descending triangle. There is heavy activity in the June
15 calls.
Concord EFS
(
CEFT |
Quote |
Chart |
News |
PowerRating) gained 3% on
heavy volume. The company reported first quarter earnings excluding one-time
charges that met expectations. The company saw a 33% gain in earnings compared to
the period a year ago. There is heavy activity in the May 32.50 calls.Â
Hollywood Entertainment
(
HLYW |
Quote |
Chart |
News |
PowerRating)
jumped 5.35% on double its average volume. The shares also broke out of an
ascending trianlge. Look at the July calls which are trading at a lower implied
volatility.Â
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 23.51 | DOWN 2.60 |
CVR I, II BUY |
4.26% Above |
Not At Extreme |
| VXN | 43.76 | DOWN 1.36 |
CVR I, II BUY |
7.15 % Above |
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 |
| Dynegy | DYN | + 29.96 |
9636 | 4104 |
| Biopure | BPUR | + 19.97 |
459 | 173 |
| Alliance Gaming |
ALLY | + 9.25 |
765 | 370 |
| Itron | ITRI | + 7.25 |
603 | 103 |
| Concord EFS |
CEFT | + 3.17 |
3933 | 906 |
| Hollywood Entertainment |
HLYW | + 5.35 |
1420 | 558 |
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 |
| Basic Industries SPDRs |
XLB | 22.7 | 17.2 | 42 | 16.8 |
| Aquila | ILA | 42 | 34 | 31.5 | 28 |
| Public Services Entr. |
PEG | 17.1 | 13.9 | 30.3 | 15.3 |
| NPS Pharmaceuticals |
NPSP | 67.7 | 58 | 68.4 | 50.3 |
| CenturyTel | CTL | 35 | 30.2 | 37.8 | 27.6 |
| Isis Pharmaceuticals |
ISIS | 68.8 | 59.5 | 68.7 | 58.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Simplex Solutions |
SPLX | 30.4 | 41.1 | 92.5 | 65.3 |
| Concord EFS |
CEFT | 36.8 | 43.8 | 48.9 | 31.5 |
| New Plan Excel Realty |
NXL | 19.1 | 22.3 | 31.7 | 17.5 |
| Intergraph | INGR | 54.6 | 63.6 | 73.2 | 45.5 |
| Financial Sector SPDRs |
XLF | 17 | 19.8 | 28.2 | 14 |
| Vishay Intertechnology |
VSH | 41.3 | 46.6 | 59.9 | 40 |
Please use stops on every trade!