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by 7/6/2000 8:53 AM
Stocks quoted in this article:
Motorcycle manufacturer Harley-Davidson (HDI - 39-13/16) received an analyst upgrade this morning. A major brokerage firm began coverage on HDI today at a long-term "buy" recommendation. Despite yesterday's broad-market downturn, the stock managed to surge more than two percent higher. The bullish price action also improved HDI's technical picture, as the stock closed back above its 10-week and 20-week moving averages for the first time since mid-May. From a sentiment standpoint, HDI still must contend with the second heaviest level of potential call resistance located just overhead at the 40 strike.<
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by 7/6/2000 8:51 AM
Stocks quoted in this article:
Biotech name Amgen (AMGN - 73-13/16) broke though heavy call open interest on the July 70 call, where 15,697 contracts currently reside. The stock rallied seven percent in Wednesday's trading on volume that was 2-1/2 times its 10-day average daily volume. The equity is now perched near its all-time highs of 76-1/2. This breakout may be for real, as options players are fading the move from Wednesday. This sentiment is reflected in the open-interest jump on the August 70 put. Open interest went from 149 to 5,863 contracts on this out-of-the-money option in the face of yesterday's upleg.
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by 7/6/2000 8:40 AM
Stocks quoted in this article:
On a technical basis, McDonald's (MCD - 31-15/16) has been consolidating throughout 2000, trading between the 30 and 45 levels for the first half of the year. The shares are battling their overhead 10-day and 20-day moving averages, which have capped rally attempts over the past month. The crucial line of defense for MCD bulls is the 30 level. Over the last couple of weeks, 30 has been the favorite place for MCD bears to place their bets on the July series. The July 30 put has been the site of heavy put open interest, with 16,629 contracts residing on this option. It appears that these contracts may expire worthless with yesterday's closing bid of 1/8. Options players are not jumping from the bearish camp on MCD, with the August 30 put now becoming the favorite option for speculators to place their bearish bets. This option saw its open interest jump from 495 to 17,336 contracts overnight. It will be key to watch MCD if the shares approach 30 over the next month.
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by 7/6/2000 8:20 AM
Stocks quoted in this article:
QLT Inc. (QLTI - 68-7/8) develops pharmaceutical products for use in photodynamic therapy. In Wednesday's trading, QLTI fell nearly five percent on no news, while its peers in the biotechnology sector rallied nearly five percent. Option activity was brisk yesterday on QLTI, with the September 45 and 60 puts receiving all of the attention from an institution. Both options saw 7,070 contracts change hands. These transactions appear to be part of a bear debit spread. The September 45 put was sold for 3/4 to finance the purchase of the September 60 put for 4-3/4. This bearish debit spread will become profitable should QLTI decline below 56 and will achieve maximum profits if the stock reaches September expiration at the 45 level.<
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by 7/5/2000 5:07 PM
Stocks quoted in this article:
Vertex Pharmaceuticals (VRTX - 119-3/8) was one of the top names on the Nasdaq new highs list today, as the biotechnology name gained more than 10 points. Since the stock's near-term intraday bottom on April 24, it has stepped up by 180 percent. Throughout this advance, the shares have obtained solid support from their ascending 10-day moving average. Despite this impressive technical strength, option activity in VRTX's pit was marginal today. As contrarians, we view this complacency from the options crowd as a bullish omen for the equity's near-term prospects. What's more, information from Multex shows that there are only nine analysts now covering the security. Any new positive coverage could give VRTX an additional boost higher over the short term.
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