Wednesday’s Options Alerts
What started out well
certainly didn’t end well as stocks started the week sharply lower. Despite
positive earnings news from Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating), Bank of America
(
BAC |
Quote |
Chart |
News |
PowerRating),
and Lucent Technologies
(
LU |
Quote |
Chart |
News |
PowerRating) and an increase in the leading economic indicators,
stocks turned lower after an early morning rally. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near the midpoint of its range and
closed near its highs. This shift in intra-day sentiment suggest that fear is
increasing.
No new CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near its lows and closed near its highs. This shift in intra-day
sentiment also suggests that fear is increasing. The VXN did not trigger any signals
today either. Both volatility indices are continuing to show an increase in fear
during this earnings season. Perhaps Louis Navellier said it best when he said
“While it is very likely that the worst has passed, there is still
uncertainty about the magnitude of the recovery.”
Points of Significance:
Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating) shot up 24% on over five
times its average volume. Shares of Amazon are now trading at a six-month high. The
company surprised Wall Street by posting a fourth quarter profit of a penny a
share instead of an expected loss. Amazon’s record revenues topped the billion dollar mark. There is heavy activity in the February
12.50 calls and puts.
Rehabcare
(
RHB |
Quote |
Chart |
News |
PowerRating), a national provider of
temporary healthcare staffing services fell 20% on almost seven times its average
volume. The company announced that it expects its fourth quarter earnings to be
about half the analyst estimates of 41 cents a share. Rehabcare said that
they attributed the weakness to a decline in supplemental staffing revenue and
an increase in general and administrative expenses that were due to the
reorganization of its staffing unit.
Hanover Compressor
(
HC |
Quote |
Chart |
News |
PowerRating) dropped 15% on six
times its average volume today after receiving downgrades from various firms
last week. The stock has not traded at this level since December of 1999. There
is heavy activity in the March and June 15 puts.
Retek Inc.
(
RETK |
Quote |
Chart |
News |
PowerRating) fell 13% on over four
times its average volume today. The company reported earnings inline with
analysts’ estimates. They also left their full year 2002 figures intact. There
is heavy activity in the July 30 calls.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 25.10 | UP 0.76 |
NONE | 4.23 % Above |
Not At Extreme |
| VXN | 50.37 | UP 1.48 |
NONE | 3.66 % 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 |
| Amazon.com | AMZN | + 24.01 | 53246 | 13576 |
| Rehabcare Group |
RHB | – 19.67 |
1023 | 125 |
| Hanover Compressor |
HC | – 15.32 | 3158 | 1419 |
| Sage Inc. |
SAGI | – 13.51 |
450 | 122 |
| Retek Inc. | RETK | – 13.35 | 692 | 278 |
| Itron | ITRI | – 12.37 |
1303 | 291 |
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 |
| Imclone Systems |
IMCL | 127.5 | 89.2 | 86.7 | 45 |
| Georgia Pacific |
GP | 73 | 55 | 55.4 | 32.3 |
| Rainbow Technologies |
RNBO | 79.6 | 63.3 | 97.2 | 57.9 |
| Swift Technologies |
SWFT | 62 | 50.7 | 60.7 | 41.9 |
| Huntington Bancshares |
HBAN | 35.6 | 29.4 | 38.3 | 23.6 |
| Biopure Corporation |
BPUR | 82.6 | 69.2 | 95.3 | 74.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Willamette Industries |
WLL | 19.7 | 55.4 | 59.6 | 19.3 |
| BUCA Inc. |
BUCA | 51.9 | 68.6 | 71.1 | 66.8 |
| Weyerhaeuser | WY | 27.4 | 33.9 | 49.5 | 28 |
| Niagara Mohawk |
NMK | 22.6 | 26.4 | 36.2 | 21.6 |
| Cardinal Health | CAH | 31.1 | 35.6 | 38.4 | 25.8 |
| Barr Labs |
BRL | 35.8 | 40.3 | 56.6 | 37.7 |
Please use stops on every trade!