Wednesday’s Options Alerts…

Stocks rallied
sharply for the second day in a row,
carrying the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)

back above the psychological 2000 level. The major market averages
were helped out by the strong housing starts number and positive news
from General Electric
(
GE |
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PowerRating)
. Housing starts in November jumped 8.2
percent to 1.645 million, outpacing the projected 1.55 million.
General Electric also helped boost the market, as they reaffirmed
their fourth quarter and annual earnings targets. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)

opened near the highs of the day and closed near its low. Once again,
this intra-day shift in sentiment suggests that fear is still
decreasing. The VIX did not trigger any CVR signals today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)

also opened near its high and closed near its lows of the day. This
intra-day shift in sentiment is also telling us that fear is
decreasing. The VXN did not trigger any CVR signals either. Fear is
continuing to decrease, as the strong housing starts number is
assuring people that we are on the road to economic recovery.

Points of Significance:

Invision Technologies
(
INVN |
Quote |
Chart |
News |
PowerRating)

dropped sharply for the second straight day as investors worry
about their capacity to meet increasing demand without expensive
outsourcing. Its options traded almost triple its average its trading
volume. There is heavy volume in the December 30 and 35 puts.
Solectron
(
SLR |
Quote |
Chart |
News |
PowerRating)
dropped over 18% today on four times its average
trading volume. The company reported a first quarter loss of eight
cents a share compared with a gain of 29 cents a share for the same
quarter a year ago. In addition, Solectron reported that they will
borrow up to $2 billion in order to meet their short-term debt
obligations. Options on Solectron traded almost six times their
average volume. There is heavy activity in the December 12.50 puts.
Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating)
jumped 13% on over two and a half times its
average trading volume. The stock stopped just shy of its 200-day
moving average. An analyst from Banc of America upped Siebel’s
earnings estimates for fiscal 2002 to 55 cents a share from a previous
47 cents a share. Siebel’s options traded over four times its average
volume. Bristol Meyers Squibb
(
BMY |
Quote |
Chart |
News |
PowerRating)
is continuing to pull back
from lows. Bristol’s options are getting expensive, as its implied
volatility has gone to a new high.

 

Volatility
Index
Close Net
Change
Signals/Direction %
Above/Below 10 Day Moving Average
Significance
VIX 24.16 DOWN 1.27 NONE 4.96 % Below Not At
Extreme
VXN 49.05 DOWN
2.02
NONE 2.29
% Below
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
InVision Technologies INVN – 19.25 15320 5501
Solectron SLR – 18.29 16708 2876
Ibis Technology IBIS + 16.46 840 279
Take Two Interactive TTWO + 14.38 7553 1730
Siebel Systems SEBL + 13.75 60646 13672
Globespan Inc. GSPN + 13.25 11091 1542

 

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
United Rentals URI 53.5 42.7 74.2 42.2
Allied Capital
Corporation
ALD 25 20.7 30 24.5
Inhale Therapeutics INHL 90.6 75.3 101.8 77.4
Bristol Meyers
Squibb
BMY 57.9 48.3 49.9 25.3
Abitibi-Consolidated ABY 56.1 47.3 69.1 31.3
Silicon Laboratories SLAB 80.5 70.1 102.7 68.6

Spike Down

Name Symbol IV Previous
IV
High
IV
Low
IV
Sun Microsystems SUNW 65.8 89 83.6 58.4
Financial
Sector SPDRs
XLF 23.6 27.9 41 20.5
Williamette
Industries
WLL 57.3 66.5 49 19.3
MatrixOne
Inc.
MONE 89.6 102.6 112.1 92.9
Affiliated
Computer Services
ACS 30 34.3 45.2 32.9
Solutia SOI 33.2 37.9 43.5 32

Please use stops on every trade!