Wednesday’s Options Alerts
Instead of following through after yesterday’s turnaround, all major averages
ended in the red. Despite good
news from blue chip giants Compaq
(
CPQ |
Quote |
Chart |
News |
PowerRating) and Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), stocks came under pressure
thanks in part from a warning from Nortel Networks
(
NT |
Quote |
Chart |
News |
PowerRating). The strongest sector
today were the airlines as they benefited from a drop in crude oil prices.
Anything tech today was weak. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near the lows of the day and closed in the top third of it range. This
intraday shift in sentiment suggests that fear is increasing. Today’s action triggered a CVR
I sell
signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up and opened near the lows of the day and closed near its
highs. This shift in intraday sentiment also shows fear increasing, but in a
more dramatic manner. No signals were triggered by the VXN today. Tech
stocks are getting oversold and could be near a bounce.
Points of Significance:
Kronos Inc.
(
KRON |
Quote |
Chart |
News |
PowerRating) fell over 22% on
20 times its average volume today. The company warned that its second quarter
earnings would come in below previous estimates. Kronos blamed the shortfall on
a lack of large orders and a cautious IT spending environment. The company is
expected to report on the 23rd. The shares are breaking down from a descending
triangle pattern. There is heavy
activity in the May 40 puts.
JDA Software
(
JDAS |
Quote |
Chart |
News |
PowerRating) jumped 12% on
four times its average volume. The stock gapped as the company increased its
first quarter outlook to 19 to 20 cents per share versus the consensus of 17
cents per share. JDA attributed the strength to higher than expected license
sales. There is heavy activity in the May 25 and 30 calls.
Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating)
dropped over 8% on heavy volume. The company, which isn’t scheduled to report
until May 7, but shares fell on concerns over the slowdown of demand. The
shares have also broken its month long support levels.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.05 | UP 0.31 |
CVR I SELL |
2.53% Above |
Not at Extreme |
| VXN | 42.46 | UP 2.18 |
NONE | 8.43 % 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 |
| Kronos | KRON | – 22.43 |
1943 | 131 |
| Sharper Image |
SHRP | Â 13.09 | .54 | 128 |
| JDA Software |
JDAS | + 12.17 |
632 | 292 |
| Crown Cork & Seal |
CCK | + 9.05 |
8065 | 1232 |
| Cisco Systems |
CSCO | – 8.40 |
91154 | 38161 |
| Lands End |
LE | + 6.31 |
931 | 309 |
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 |
| Emisphere Technologies |
EMIS | 117.4 | 98.1 | 93 | 61.8 |
| Intergraph | INGR | 77.9 | 66.1 | 65 | 45.5 |
| Kronos | KRON | 66.9 | 57.1 | 67.9 | 50.3 |
| Progress Energy |
PGN | 17 | 14.6 | 28 | 11.8 |
| Roslyn Bancorp |
RSLN | 25.4 | 22 | 38.8 | 24.3 |
| Perkin Elmer |
PKI | 50.9 | 44.4 | 59.7 | 36.3 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Lone Star Steakhouse |
STAR | 17 | 20.1 | 45.2 | 28.6 |
| Electronics for Imaging |
EFII | 49.2 | 58 | 62.8 | 48.1 |
| Ambac Financial Group |
ABK | 28.4 | 32.3 | 40.8 | 29 |
| Becton Dickinson |
BDX | 21.1 | 23.9 | 36.5 | 23.1 |
| Ruby Tuesday |
RI | 35.1 | 39.7 | 43.4 | 32.3 |
| American Capital Strategies |
ACAS | 23.8 | 26.9 | 42 | 24.8 |
Please use stops on every trade!