Network Appliance (NYSE: NTAP) offered to acquire Data Domain (NYSE: DDUP) for $25. DDUP is a provider of duplication storage appliances for disk backup. DDUP June call option implied volatility is at 45, puts are at 56; near its 26-week average of 49, according to Track Data, suggesting non-directional price movement. Puts are more expensive than calls because DDUP is difficult to borrow.

streetTracks Gold Shares (NYSE: GLD) closed at $92.25. Gold is recently is recently up .31% to $940.30 according to Bloomberg. GLD June option implied volatility is at 23; July is at 24; below its 26-week average of 37, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Network Appliance (NASDAQ: NTAP), a provider of unified storage solutions, is recently up 84 cents to $22.94.

NTAP company sponsored analyst meeting is scheduled for March 13.

NTAP call option volume of 45,161 contracts compares to put volume of 16,854 contracts. NTAP March option implied volatility of 51 is above its 26-week average of 44 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Caliper Life Sciences, Network Appliance, EMC Corp, Concur Tech and TechTarget were today's noteworthy initiations:

• Caliper Life Sciences Inc (NASDAQ: CALP) was initiated at Piper Jaffray with an Outperform rating and $8 target. Piper believes the company's collection of acquisitions offers a diverse portfolio targeting a $1.2B segment of the life science tools market.
  
• Credit Suisse resumed coverage of Network Appliance Inc (NASDAQ: NTAP) and EMC Corporation (NYSE: EMC) with Neutral ratings and a $28 target and $20 target, respectively, as they have concerns of near-term demand risk.
  
• Concur Technologies (NASDAQ: CNQR) was started at Jefferies with a Buy rating and $40 target, as they believe the company is changing the landscape of employee expense management by integrating travel and expense reimbursement and feels shares deserve a premium valuation.
  
• Oppenheimer sees limited upside from current levels at TechTarget Inc (NASDAQ: TTGT) and would consider an entry point in the low-to-mid teens. The firm started shares with a Neutral rating and $17 target.

OTHER INITIATIONS:

• Banc of America initiated K Swiss Inc (NASDAQ: KSWS) with a Sell rating and $20 target.
  
• Stephens initiated Comverge Inc (NASDAQ: COMV) with an Equal Weight rating and $29 target and Badger Meter Incorporated (AMEX: BMI) with an Overweight rating and $39 target.
  
• JMP Securities resumed coverage of DemandTec Inc (NASDAQ: DMAN) with a Market Outperform rating and $16 target.

The largest tech IPO since Google (NASDAQ: GOOG), VMware (NYSE: VMW), debuted at a huge premium to its pricing level (82%) and continues to climb from that level (another 14% today). Due to its huge stake in VMware, several of my favorite columnists and analysts now suggest that EMC (NYSE: EMC) is undervalued here. At around $19, is EMC undervalued? Is it a buy?

First, what is VMware worth on an per-EMC-share basis? Using yesterday's closing price for VMware, that is amounts roughly to $9 per EMC share. While there's certainly risk to using this very high figure, analysts remain very bullish on VMware's stock, and if the market remains robust, the stock stands to continue trading higher.

This leaves buying EMC's core business for about $10 per share. As a Caris & Co. analyst report notes, at $10 per share, the core business is fetching 16x earnings. With the data storage industry at 19x earnings, it certainly seems like there could be value.

MOST NOTEWORTHY: JDSU (JDSU), MasterCard (MA), GlobalSanta Fe (GSF), Molson Coors (TAP) and TRW Inc (TRW) were today's notable upgrades:

• BMO Capital upgraded JDSU (NASDAQ: JDSU) to Market Perform from Underperform based on valuation and good industry fundamentals.

• AG Edwards considers MasterCard (NYSE: MA) a defensive payments play, upgraded shares to Buy from Hold, and would use weakness to build positions in the stock.

• GlobalSanta Fe (NYSE: GSF) was upgraded at Bernstein to Market Perform from Underperform based on the merger with Transocean (RIG).

• Molson Coors (NYSE: TAP) was upgraded to Buy from Neutral at Goldman based on valuation and potential increased free cash flow in 2008.

• TRW Inc (NYSE: TRW) was upgraded to Buy from Sell at Goldman...

OTHER UPGRADES:

• Thomas Weisel raised Network Appliance (NASDAQ: NTAP) to Overweight from Market Weight.

• Suntrust upgraded Goodrich Petroleum (NYSE: GDP) to Neutral from Reduce.

• Fossil (NASDAQ: FOSL) was upgraded to Outperform from Market Perform at Piper Jaffray.

• Keybanc raised Macy's (NYSE: M) rating to Buy from Hold.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: CheckFree (CKFR), Talbots (TLB), SPSS Inc (SPSS), Network Appliance (NTAP) and Pozen Inc (POZN) were today's noteworthy downgrades:

• Following FiServ's (NASDAQ: FISV) acquisition of CheckFree, Raymond James cut CKFR shares to Market Perform from Strong Buy and Baird downgraded shares to Neutral from Outperform.

• Talbots (NYSE: TLB) was cut to Sell from Hold at Citigroup based on valuation, continued earnings disappointments, and a lack of earnings visibility.

• Cowen downgraded shares of SPSS Inc (NASDAQ: SPSS) to Underperform from Neutral citing decelerating growth and poor earnings quality.

• Bear Stearns cut Network Appliance (NASDAQ: NTAP) to Underperform from Peer Perform on the negative Q1 pre-announcement. Pacific Crest downgraded shares to Sector Perform from Outperform.

• After Pozen (NASDAQ: POZN) received a second approvable letter for Trexima, shares were downgraded by three firms:
  
• To Neutral from Strong Buy at First Albany
  
• To Hold from Buy at Jefferies and Lazard...

OTHER DOWNGRADES:

• Oppenheimer downgraded Applebee's (NASDAQ: APPB) to Neutral from Buy.

• Gabelli downgraded Boston Beer (NYSE: SAM) to Hold from Buy.

• Lehman downgraded Luxottica (NYSE: LUX) and Clorox (NYSE: CLX) to Equal Weight from Overweight.

• Thomas Weisel downgraded Nortel Networks (NYSE: NT) to Market Weight from Overweight.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: The Wet Seal (WTSLA), Brocade Communications Systems(BRCD), IAC/InteractiveCorp (IACI), CME Group (CME) and Rogers Communications (RCI) were today's noteworthy initiations:

• Merriman believes the turnaround at Arden B is well underway and both it and the Wet Seal chains have tremendous opportunities for long-term growth, initiating The Wet Seal (NASDAQ: WTSLA) with a Buy rating.

• Pacific Growth is positive on Brocade's (NASDAQ: BRCD) diversification into new products and services, starting shares with a Buy rating.

• Banc of America initiated shares of InterActiveCorp (NASDAQ: IACI) with a Neutral rating.

• William Blair believes the newly-formed CME Group (NYSE: CME) has an even more dominant competitive position within the growing futures exchange industry, reinstating shares with an Outperform rating.

• JP Morgan said Canada is an attractive wireless market and that Rogers Communications (NYSE: RCI) is well positioned, starting shares with an Overweight rating...

OTHER INITIATIONS:

• Deutsche Bank initiated Waters Corp (NYSE: WAT) with a Hold rating.

• Goldman started Infinera Corp (NASDAQ: INFN) with an Equal Weight.

• Kaufman reinstated Savvis (NASDAQ: SVVS) with a Hold.

• Pacific Growth initiated Network Appliance (NASDAQ: NTAP) with a Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

EMC Corp. (NYSE: EMC) opened at $16.13. So far today the stock has hit a low of $16.05 and a high of $16.85. As of 12:10, EMC is trading at $16.32, up $0.27 (1.7%).

EMC stumbled in after hours trading last night after competitor Network Appliance (NASDAQ: NTAP) cut its forecast for the next quarter, but a closer look at NTAP's earnings shows positive signs for EMC; profits were up for the company and EPS were in line with expectations. Now that EMC has broken resistance at $16, the stock is charging up the chart. Recent technical indicators for EMC have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $14 range. EMC hasn't been below $14 since March and has shown support around $15.40 recently. This trade could be risky if the technology sector weakens over the second half of this year, but even if that happens, EMC would have to fall by more than 15% before this position would be in trouble.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in EMC or NTAP.