Schaeffer's "Behind the Headlines" Highlights the Following Stocks: Citigroup, Foot Locker, J.C. Penney, and Steelcase.

CINCINNATI -- Today's "Behind the Headlines" from Schaeffer's Investment Research focuses Citigroup (NYSE:C), Foot Locker (NYSE:FL), J.C. Penney (NYSE:JCP), and Steelcase (NYSE:SCS). "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: Citigroup Hits New Heights

Citigroup: It's a banner day for Citigroup (NYSE:C), which has stretched to a new all-time high after earning an upgrade from Merrill Lynch. The brokerage boosted its financial-services peer to "buy" from "neutral," citing increased confidence in the firm's top line. Additionally, a Barron's article said the company's recent uptrend should continue, pressuring the shares closer to the $60 mark (about nine percent away from current levels).

The equity's recent spike higher follows months of inertia below the 50 level. This round-number threshold contained all upside attempts in C dating back to early 2004. Today's burst of momentum boosted C above its August 2000 peak and into uncharted territory.

Click the following link to see a Monthly chart of C since March 2000: http://www.schaeffersresearch.com/wire?ID=17899.

The equity's latest surge of strength also puts it above many layers of formerly out-of-the-money calls, reducing the potential threat of options-related resistance. In today's action, put volume is notably heavy on the near-the-money January 55 put (C MK). More than 13,000 contracts have changed hands at this strike, which was previously home to fewer than 1,500 puts. It is likely that most if not all of this volume will translate into new open interest, but is it being initiated by buyers (who expect a modest decline in C by January expiration) or by put sellers (who hope C will close above the 55 strike at expiration, allowing the premium collected to be retained)? The blocks traded have come in all shapes and sizes and have been executed throughout the trading day, so a look at tomorrow's implied-volatility readings may be our best clue.

Foot Locker: Specialty retailer Foot Locker (NYSE:FL) suffered a modest blow this morning when Merrill Lynch lowered its rating on the stock to "neutral" from "buy." The shares have gapped three percent lower as a result, putting it face-to-face with the 22 level, an area of possible support. FL has endured just one solid break beneath the 22 mark since October 2003.

FL is now forced to contend with considerable call open interest overhead. At the January 22.50, 25, and 30 call strikes combined, there are more than 95,000 bearish positions that could serve as options-related resistance. If the stock rebounds from the 22 level, it may not be able to get very far, considering this wall of overhead calls.

Click the following link to see the January open-interest configuration for FL and a Monthly chart of FL since May 2003: http://www.schaeffersresearch.com/wire?ID=17899.

J.C. Penney: J.C. Penney (NYSE:JCP) is sauntering higher today after A.G. Edwards boosted its rating on the venerable retailer to "buy" from "hold." As American consumers barrel through the final week of shopping madness before December 25th, JCP shares have foraged their way back above their 10-day and 20-day moving averages. In fact, these trendlines are on the verge of completing a bullish crossover, which could signal additional upside for the underlying stock.

Adding to JCP's bullish case is the continued cloud of skepticism among the options-trading crowd. Schaeffer's put/call open interest ratio (SOIR) for JCP currently weighs in at 1.59, meaning that in the January and February series combined, there are 159 open puts for every 100 open calls. This reading is higher than 95 percent of the past year's data, suggesting that pessimism is near a 12-month extreme. In the weeks ahead, JCP stands to benefit from put open interest at the January and February 75 strikes, the site of heaviest open interest in their respective series. These out-of-the-money options may provide a layer of options-related support during the short term.

Click the following link to see the January open-interest configuration for JCP and a Daily chart of JCP since September 2006 with 10-day and 20-day moving averages: http://www.schaeffersresearch.com/wire?ID=17899&obspage=2.

Steelcase: Steelcase (NYSE:SCS) visited the earnings confessional bright and early this morning, announcing a 72-percent jump in third-quarter earnings on a modest increase in revenue. The per-share results of 22 cents per share topped analysts' expectations by three pennies. Looking forward, SCS officials said fourth-quarter revenue should rise between four and eight percent, putting per-share earnings at 14 to 19 cents.

In late-afternoon activity, SCS shares have inched higher, adding to their recent uptrend. Since mid-August, the stock has gained nearly 40 percent along the stalwart support of its 10-day and 20-day moving averages. Today's positive earnings surprise, combined with this healthy rally, could send bearish investors in SCS scrambling for the exits. While December short-interest figures have yet to be reported, the last data on SCS indicated a short-interest ratio of 22.96. In other words, it would take about 23 trading days (roughly a month) - at the stock's average daily volume - to eradicate all of these bearish bets. If a short-covering scenario were to begin, there is ample fuel to drive the shares even higher.

Click the following link to see Daily chart of SCS since July 2006 with 10-day and 20-day moving averages: http://www.schaeffersresearch.com/wire?ID=17899&obspage=2.

The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day and get entered to win an iPod Nano. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROAW13M&PAGE=1.

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.