Schaeffer's "Behind the Headlines" Highlights the Following Stocks: Aeropostale, J.C. Penney, Target, and the Retail HOLDRS Trust.

CINCINNATI -- Today's "Behind the Headlines" from Schaeffer's Investment Research focuses on Aeropostale (NYSE:ARO), J.C. Penney (NYSE:JCP), Target (NYSE:TGT), and the Retail HOLDRS Trust (AMEX:RTH). "Behind the Headlines" is a report that analyzes newsworthy stocks that are generating a lot of attention on Wall Street. "Behind the Headlines" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

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Behind the Headlines:

Aeropostale: This morning, Aeropostale (NYSE:ARO) reported that September same-store sales soared 8.5 percent compared to the Street estimate for a 5.8-percent increase. What's more, the firm boosted its third-quarter earnings outlook to 58-59 cents per share, versus the consensus estimate of 57 cents per share. Sounds like good news, doesn't it? Apparently, investors weren't convinced as the stock gapped lower on the open. The security has been quick to bounce back on heavy trading volume this morning and reclaim its 20-day moving average. ARO has enjoyed the dual support of its 10-day and 20-day trendlines since mid-August. However, from a longer-term perspective, the equity has made a series of lower highs and lower lows. The stock's weak reaction to positive news combined with the equity's lackluster long-term trend indicate that ARO may be poised to create a new lower low instead of breaking out to the upside.

Click the following link to see a Daily Chart of ARO Since August 2006 With 10-Day and 20-Day Moving Averages and a Weekly Chart of ARO Since January 2006: http://www.schaeffersresearch.com/wire?ID=17491 .

J.C. Penney: Elsewhere, J.C. Penney (NYSE:JCP) announced September same-store sales sprinted 8.7 percent higher, thumping the consensus estimate for a 5.2-percent jump. Total sales for the month increased 10.2 percent. Furthermore, the company boosted its third-quarter outlook to $1.11 per share, compared to the consensus estimate of $1.09 per share. Like ARO, JCP has pulled back despite the news. However, the technical backdrop for JCP looks a lot more attractive than ARO. In trading on Wednesday, JCP tagged a new multi-year high after rallying more than three percent and today's pullback may be traders locking in some of their profits. Furthermore, the stock is facing potential support at its 10-day moving average, which rests at the 69 level. The 69-70 region served as staunch resistance for the shares and could now provide a layer of support. In addition, the equity's 10-month trendline is climbing into the area, and could help to buoy the shares on a longer-term basis. Meanwhile, the number of JCP shares sold short soared 40 percent in September to 15.4 million shares, notching a fresh multi-year high. This steep accumulation of bearish bets could supply the security with potential buying pressure.

Click the following link to see a Daily Chart of JCP Since April 2006 With 10-Day Moving Average and a Monthly Chart of JCP Since February 2003 With 10-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=17491 .

Target: Another retailer enjoying a strong September is Target (NYSE:TGT). The firm boasted a 6.7-percent increase in September same-store sales, beating the consensus estimate for a five-percent increase. Total sales for the month skipped 13.4 percent higher to $4.89 billion. Also, the retailer reported that it now expects earnings per share for the third quarter to come in above the consensus estimate of 53 cents per share. Technically speaking, the shares have rallied along the support of their 10-day moving average since the end of August and are now approaching former resistance in the 60 region. Options players don't have particularly high hopes for the shares, as peak October call open interest resides at the deep in-the-money 55 strike with more than 11,300 contracts. The lack of out-of-money call open interest not only removes the likelihood of the stock encountering options-related resistance, but it also indicates that expectations for the firm are rather low. In fact, the stock's Schaeffer's put/call open interest ratio (SOIR) is sitting near an annual high, while TGT's short interest hit a new multi-year high in September. This combination of growing pessimism against the stock's technical strength has bullish implications for the shares.

Click the following link to see a Daily Chart of TGT Since July 2006 With 10-Day Moving Average and an October Open Interest Configuration for TGT: http://www.schaeffersresearch.com/wire?ID=17491 .

Retail HOLDRS Trust: Since I'm focusing on the retail sector, I thought I would pop in on the Retail HOLDRS Trust (AMEX:RTH). The exchange-traded fund (ETF) is currently pulling back to support at its ascending 20-day moving average, which has buoyed the shares since the end of August. However, the trust has dipped back below resistance at the 99 level. Furthermore, the ETF also has to overcome long-term resistance at the 100 level. This century mark has hindered RTH's rally attempts since November 2004. Meanwhile, sentiment toward the sector is extremely bearish. The SOIR for RTH sits at 3.50, as put open interest more than triples call open interest among near-term options. This reading is also just three percent away from hitting a new annual high. Short interest also jumped 19 percent to 16.8 million shares. This wealth of pessimism could very quickly turn into a fresh supply of buying power if RTH has bust through overhead resistance in the 99-100 region. Definitely a sector to keep an eye on.

Click the following link to see a Daily Chart of RTH Since July 2006 With 20-Day Moving Average and Weekly Chart of RTH Since July 2004: http://www.schaeffersresearch.com/wire?ID=17491 .

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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 .