Schaeffer's "Behind the Headlines" Highlights the Following Stocks: Activision, Krispy Kreme Doughnuts, Best Buy, Circuit City Stores, and RadioShack.

CINCINNATI -- Today's "Behind the Headlines" from Schaeffer's Investment Research focuses Activision (NASDAQ:ATVI), Krispy Kreme Doughnuts (NYSE:KKD), Best Buy (NYSE:BBY), Circuit City Stores (NYSE:CC), and RadioShack (NYSE:RSH). "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: Electronics Retailers After Best Buy Miss

Activision: The shares of Activision (NASDAQ:ATVI) have mostly shrugged off a downgrade that came across the Street this morning. Hilliard cut the video-game designer from "long-term buy" to "neutral." The stock pulled back briefly on the open, but has rebounded off support at the 17.50 level. This region has helped buoy the shares during the past few days as the equity waits for support in the form its 10-day and 20-day moving averages to climb into the area. The security has been guided higher by these short-term trendlines since mid-July. The stock has also benefited from the support of its 10-week moving average, which currently resides at the 16.50 level.

Click the following link to see a Daily chart of ATVI since June 2006 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=17858 .

Options players are extremely bullish on the game maker, which should come as no surprise considering the equity's stellar uptrend. However, one encouraging sign of pessimism comes from short sellers. This bearish group has been reluctant to shed their pessimistic positions. While short interest dropped by three percent in November to 21.6 million shares, this accumulation continues to hover around multi-year highs. This buildup of bearish bets could supply the equity with fresh buying pressure as the skeptics continue to unwind their short positions.

Krispy Kreme Doughnuts: After the close last night, Krispy Kreme Doughnuts (NYSE:KKD) reported that it sees third-quarter revenue falling to $117 million from $129 million during the same period in the prior year. The firm cited a decline in the number of company stores, as well as lower sales to franchisees. Furthermore, the doughnut maker expects to report a quarterly net loss, with results continuing to be cut by "substantial costs" associated with the legal and regulatory matters.

Technically speaking, the equity continues to struggle with the 10 level, but is holding support at the 9.60 level. What's more, the stock is resting on support at its ascending 10-week moving average, which has carried the security higher since the beginning of October. Furthermore, the equity's 10-month moving average is climbing into the area to add another layer of support. KKD has yet to log a monthly close below this trendline in 2006.

Click the following link to see Monthly chart of KKD since August 2005 with 10-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=17858 .

Meanwhile, the stock is getting no love from investors. The stock's SOIR rests at a lofty 1.56 in the 87th percentile. What's more, short interest continues to build. During the most recent reporting period, short interest edged one percent higher to 19.3 million shares. With a short-interest ratio of 18.5 days to cover, there is ample sideline money available to fuel a significant rally in the shares. If the security can use long-term support as a springboard, the stock could easily take out resistance at the 10 level.

Circuit City Stores: Electronics retailers are taking a hit today following some lackluster earnings from rival Best Buy (NYSE:BBY). Circuit City Stores (NYSE:CC) gapped lower on the earnings, but has found support at the 23.50 level. This area has halted pullback in the shares from mid- to late November. The equity has additional support in the 22.50-23 region should the stock continue to fall on the poor outlook from its rival. From a longer-term perspective, the equity has support in the form of its ascending 20-month moving average rising into the region. CC has not closed a monthly below this trendline since August 2003.

Click the following link to see a Monthly char of CC since January 2003 with 20-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=17858 .

Meanwhile, sentiment toward the shares is extremely pessimistic. The stock's Schaeffer's put/call open interest ratio (SOIR) rests at 1.82, as put open interest nearly doubles call open interest among near-term options. This reading is also higher than all but 11 percent of those taken during the past 52 weeks. A bounce off long-term support could help to entice some of these bears from the sidelines, pushing the shares higher once again.

RadioShack: The shares of RadioShack (NYSE:RSH) have also been hit by the Best Buy earnings fallout. However, RSH has weathered the ire of investors a little better than its competitors. At last check, Best Buy is down 5.7 percent and CC has shed 6.7 percent. On the other hand, RSH has shed only one percent in trading this afternoon.

One concern for the shares is that they have tumbled below key support at the 17 level, which had buoyed the equity since late October. However, this isn't the first time the stock has dipped below support at the 17 level since it pulled back to this level. It will be interesting to see if the shares can recover the level like it did on October 25, November 3, November 14, and December 1.

Click the following link to see a Daily chart of RSH since July 2006: http://www.schaeffersresearch.com/wire?ID=17858 .

Meanwhile, RSH remains a favor of short sellers. In November, the number of RSH shares sold short jumped by 16 percent to 15.9 million. With a short-interest ratio of nearly six, the stock could benefit from some short-covering support from this group should the equity once again fail to break down.

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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 .