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by 11/1/2000 8:51 AM
Stocks quoted in this article:
Earlier this morning, it was announced that Covad Communication's (COVD - 5-9/32) Chief Executive, Chairman, and President Robert E. Knowling resigned, effective immediately.

The company, which provides dedicated high-speed digital communications services to the Internet, had its initial offering in January 1999 with 7.8 million shares priced at $18 each (17.55 million sharers at $8.00 split adjusted). After peaking at over 66 this past March, the shares have been unable to thwart their decline in price. On October 17, the company announced third-quarter earnings of a loss of $1.22 per share, falling short of Street estimates by four cents per share. Since its initial offering, the company has yet to turn a profit.

Options investors are maintaining a bullish stance on COVD, as there are currently 13,623 open puts versus 36,477 open calls for options with up to three month until expiration. Option activity over the past several days has diminished considerably, as open interest changes have been minimal. With a 30-day historical volatility of over 300 percent on the stock, the implied volatilities on the options seem underpriced with both put and call options holding under 150 percent with no skew toward either view. Remember, "cheap" can become "cheaper" and these options might not represent bargains, just a lack of interest.

Short interest on the shares ballooned by 425 percent to over 16.5 millions shares over the past month. The change of a high-ranking official represents a "fundamental" change. We must now wait to see how the investing public views it. <
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by 10/31/2000 3:45 PM
Stocks quoted in this article:
JDS Uniphase (JDSU 81-3/8) is a manufacturer of subsystems and equipment for fiber-optic telecommunications and semiconductor wafer inspection and analysis. This technology bellwether has had a rough go of late, dropping nearly 38 percent from its intraday high of 128 on August 22. JDSU's decline has been steady, contained by the tandem of its downtrending 10-day and 20-day moving averages.

On the options front today, call speculators have been active. In fact, the out-of-the-money November 85 call is one of the most-active options on the PHLX with over 2,800 contracts traded. Most of the volume crossed the tape soon after the open today at the ask price, indicating possible purchases. However, with open interest of over 8,600 contracts, a speculator may have been covering a short position. In either case, it appears that the buyer is calling a short-term bottom for JDSU.

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by 10/31/2000 2:50 PM
Stocks quoted in this article:
AutoZone (AZO 26-3/4) shares are seeing some unusual option activity today. Volume on the March 30 call is 7,260 contracts and is the most-active option traded on the CBOE so far today. The stock has rallied over 26 percent since September 20. Most of today's call activity at the March 30 strike has been large block volume going off either at or near the ask price.

On a weekly chart, AZO has has made a series of lower lows since January 1999. However, AZO has tended to find support at the 20 area on numerous occasions since late 1998, and this is the area from which it is rallying once again. <
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by 10/31/2000 2:35 PM
Stocks quoted in this article:
The S&P Insurance Index (IUX 806.82) is not participating in today's broad-market rally, as the index has eroded by nearly 13 points. This subtraction comes after Monday's over 37-point advance that carried the IUX to an all-time intraday high. Despite this afternoon's weakness, the index is still in the midst of an impressive intermediate-term upswing, as it has rallied almost 86 percent higher since its mid-March bottom.

Top IUX laggards today include MGIC Investment (MTG 67-1/8), down 6.1 percent; Hartford Financial Services Group (HIG 73-9/16), down 5.3 percent; and Chubb (CB 83-1/4), down 3.1 percent. MTG received three brokerage downgrades this morning.


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by 10/31/2000 1:47 PM
Stocks quoted in this article:
Expedia (EXPE 13), an offspring of Microsoft (MSFT 69-1/16), has been providing online travel agent services since 1996. Last night, the company said its first-quarter loss totaled four cents per share, an impressive improvement over its fourth-quarter loss of 30 cents per share. Additionally, the firm's figures slaughtered Wall Street's consensus estimate, which looked for a 26-cents-per-share loss. The company's CEO said EXPE will likely surpass analysts' expectations in the second quarter as well. Wall Street currently looks for EXPE to lose 25 cents per share in the next reporting period.

This morning, two Wall Street firms issued a mea culpa, upgrading the stock from "buy" to a "strong buy" ratings. EXPE has rallied a substantial 45 percent on the fundamental news, gapping above its 10-day and 20-day moving averages on heavy volume. The equity has also inched above its descending 10-week moving average, which had been acting as resistance since early September. MSFT is unchanged in early afternoon trading. <
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