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!