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by 5/23/2000 11:55 AM
Stocks quoted in this article:
This morning, The Wall Street Journal reported that insurance concern Allstate (ALL Ė 27-11/16) is set to unveil an alliance with home-improvement retailer Home Depot (HD Ė 50-1/4). The daily financial newspaper said that HD stores would provide products and services to ALLís homeowner-insurance policyholders, effectively saving the insurance company between 30 and 50 million dollars each year. If HD products are not available to an ALL policyholder, ALL officials will use HD prices as a baseline for purchasing the necessary supplies. Neither equity is reacting very strongly to this nugget of news, as HD is unchanged in late-morning trading, while ALL has given up a fraction. Investors have been in good hands with ALL shares of late, as the stock has muscled nearly 65 percent higher since early March. This has allowed the equity to surge above its 10-month moving average. ALL has not enjoyed a monthly close above this long-term trendline since June 1998. Still looming overhead, however, is ALLís descending 20-month moving average, which is perched just below the 32 mark. On the options front, speculator optimism has been on the rise along with ALLís share price. Since May 4, the Schaeffer's put/call open interest ratio (SOIR) for ALL has dropped from 0.51 to 0.34. The stockís present SOIR ranks lower than 91 percent of all readings over the past year. Should this optimism continue to swell, it could be a short-term concern for the shares. But as long as ALLís upward trend continues to flourish, it may not prove detrimental.
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by 5/23/2000 9:18 AM
Stocks quoted in this article:
Yesterday's Nasdaq Composite (COMP - 3364.2) volume came in at just under 1.6 billion shares. This is the highest COMP volume since April 19, a span of more than a month. What may be positive is that yesterday's higher volume came during a bullish key reversal day - a day when the COMP made a new low, then reversed to finish at its high of the day. However, the last bullish key reversal day did not produce the rally that might have been expected. On April 17, the COMP made a low at 3227, then reversed to finish over 300 points higher at the close. The rally peaked at the overhead 10-day moving average, some 600 points off the April 17 low, then violently reversed, dropping to nearly 3300 in just a matter of a few days.
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by 5/23/2000 9:05 AM
Stocks quoted in this article:
Global markets were encouraged by the U.S. late-day rebound on Monday, as 13 of 17 world markets are higher thus far. On average, the overseas markets rose 0.86 percent. In overnight trading, the following were the leading and lagging indices around the globe. The top four major markets are Finland (HEXND - 15159), up 4.96 percent; Sweden (AFFND - 5856), up 1.95 percent; Italy (MILND - 30279), up 1.71 percent; and Denmark (CSIND - 285.3), up 1.70 percent. The bottom four major markets are Israel (ISRND - 509.71), down 1.85 percent; Singapore (SIIND - 1905.8), down 1.25 percent; Japan (NIKKEI - 16318.7), down 0.41 percent; and Japan (TOPIX - 1519.8), down 0.17 percent. <
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by 5/23/2000 9:02 AM
Stocks quoted in this article:
The option activity on America Online (AOL - 52) continues to be dominated by out-of-the-money calls. In yesterday's trading, the June 55 call saw over 22,000 contracts cross the tape, with approximately 20,600 contracts translating into new open interest. The further out-of-the-money June 60 call was also active. It traded nearly 25,000 contracts, although the activity resulted in a net reduction to open interest of about 12,500 contracts. AOL shares recently moved below their 20-month moving average, a bastion of long-term support in the past. If AOL shares are not able to close above the 20-month on Friday (which currently resides at 54), it will mark the first monthly close below this trendline since February 1997.
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by 5/22/2000 4:35 PM
Stocks quoted in this article:
Yahoo! (YHOO - 126-1/4) had a wild ride today, as it fell sharply in early trading only to recover to post a strong gain. YHOO sagged by more than five points in the last half hour of last Friday's session to close at 120-5/16. The stock continued to drop this morning, falling as low as 113-1/4 at 10:30 amid the broad-market weakness. The shares then began their recovery, posting higher highs and higher lows throughout the remainder of the day to close more than five percent higher. Following Friday's expiration, the Schaeffer's put/call open interest ratio (SOIR) for YHOO rose to its highest level in more than a year to 1.15, indicating that there are 15 percent more open put positions than call positions. Not only is the SOIR for YHOO high in comparison to its own historical pattern, it is also very high with respect to the universe of equities. Most equities have SOIR numbers below one, indicating a preponderance of calls. As contrarians, we interpret the extreme skepticism on YHOO as it moves higher off strong technical support bullishly, and look for more strength to come. <
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