   |
|
|
|
|
| Schaeffer's Option Activity Watch Features Alcoa, AutoNation, Providian Financial
CINCINNATI--(BUSINESS WIRE)--Sept. 15, 2003--Today's Schaeffer's Option Activity Watch features Alcoa (NYSE:AA), AutoNation (NYSE:AN), Providian Financial (NYSE:PVN). The Option Activity Watch is a report that takes a closer look at three equities appearing in our most unusual option activity report from the previous day. The Option Activity Watch is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo. Schaeffer's Option Activity Watch: Serious & personalized business, investment and technology intelligence for a serious advantage - BizVantage! 1. Aluminum king Alcoa (NYSE:AA) announced plans this morning to buy up to a 26-percent stake in Alba, an aluminum smelter in Bahrain. A member of the Dow Jones Industrial Average and ranked #82 in the Fortune 500, AA is a producer of primary aluminum and fabricates aluminum and alumina. The firm is also active in technology, mining, smelting, refining, and recycling. The shares are trading slightly higher after hitting a new 52-week high this morning. Despite its recent technical strength, investors are growing more skeptical of the shares. AA's Schaeffer's put/call open interest ratio (SOIR) has risen from a late-July low of 0.32 to its current reading of 0.76. This ratio is higher than 75 percent of those taken over the past 52 weeks. What's more, open interest at its October 25 put surged from 2,800 to 6,300 contracts on Friday. Another sign of investor skepticism is the five-percent rise in the number of AA shares sold short in August. It is almost four times its average daily trading volume and could spark a covering rally. These signs of pessimism represent potential sideline money that could further bolster the shares should it continue to climb higher. Click the following link to see the Daily Chart of AA since March 2003 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=8452 . 2. After vaulting more than 65 percent from its March low of 11.61, it appears that AutoNation (NYSE:AN) may be taking a breather as it pulls back to potential support at its ascending 10-week moving average. One cause for concern, however, lies at the 19-20 area. This region halted the equity's rally attempt in May 2002 and may succeed in rejecting the shares once again. Options players remain confident that the equity will punch through this area. Speculators added to their October 17.50 calls on Friday, raising open interest to 8,551 contracts. Furthermore, the SOIR for AN sits at 0.07, as calls overwhelm puts in the front three months of options. This reading is lower than 78 percent of those taken over the past 52 weeks. Short interest also staggered six percent lower over the most recent reporting period to 13.4 million shares. Traders should be cautious though, as this accumulation of shorted shares is more than 10 times its average daily trading volume and could easily spark a covering rally. Investors should keep an eye on the 20 area. A break through here could force investors cover their short positions. Click the following link to see the Weekly Chart of AN since October 2002 with 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=8452 . 3. Providian Financial (NYSE:PVN) was also the site of some heavy call trading last week. Its October 12.50 strike added nearly 3,500 contracts to bring open interest to 4,082. Sentiment toward the security remains relatively mixed. Short interest dropped 22 percent over the past month while its SOIR of 0.35 is higher than 72 percent of all those taken over the past year. Wall Street is giving the company the cold shoulder, as 13 of the 22 covering analysts rate it a "hold" and five rate it a "sell." Technically speaking, PVN is moving higher along support at its 10-week and 20-week moving averages. A continuation of this display of strength could result in upgrades, which would only add more fuel to the rally. Click the following link to see the Weekly Chart of PVN since June 2002 with 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=8452 . The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo. About Schaeffer's Investment Research (www.SchaeffersResearch.com) Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .
|
