Schaeffer's Daily Market Blog Features: Logitech International SA, Advanced Micro Devices, Apple Computer, McDonalds, and Duke Energy.CINCINNATI -- Among the stocks featured in the October 19 edition of Schaeffer's Market Blog are Logitech International SA (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :LOGI LOGI Logitech Intl. (stock symbol) ), Advanced Micro Devices (NYSE NYSE See: New York Stock Exchange :AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. ), Apple Computer (NASDAQ:AAPL AAPL Apple Computer, Inc. (stock symbol) AAPL American Association of Professional Landmen AAPL American Academy of Psychiatry and the Law AAPL Advance Audiovisual Presentation Limited AAPL Advocates for Arkansas Public Libraries ), McDonalds (NYSE:MCD MCD Minor Civil Division MCD McDonalds (restaurant) Mcd Macedonian (linguistics) MCD Municipal Corporation of Delhi MCD Magnetic Circular Dichroism MCD Mad Cow Disease ), and Duke Energy (NYSE:DUK DUK Duke Energy Corporation (stock symbol) DUK Dead Upon Keyboard ). Schaeffer's Market Blog is just one of the many free market commentaries written every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. To have this report delivered to you free via email every day click on the following link and you'll also get an opportunity to win an iPod Nano A flash-based digital music player from Apple, introduced in 2005. Like larger iPod models, the nano has a color screen. Although the nano name suggests ultra-small "nanotechnology," the iPod shuffle is actually smaller. See iPod. . http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB PROB Probable/Probably PROB Problem PROB People's Republic of Bangladesh 13M&PAGE=1. Don't forget that many of our observations are available as audio presentations that you can hear on your computer or download from Apple's iTunes Music Store to play on a portable device such as an iPod. To see the full menu of podcasts, please visit http://www.schaeffersresearch.com/commentary/podcasts/. 7:33 AM Free Financial Videos and Podcasts Good morning. We're busy building a new video studio here at Schaeffer's. Yesterday, we produced shows that featured J.P. Morgan Chase, Illumina, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , and Pfizer. We also produce podcasts, audio presentations that you can hear on your computer or download from Apple's iTunes Music Store to play on a portable device such as an iPod. Our library features about 900 podcasts so far, and our founder Bernie Schaeffer has agreed to appear in "Podcast 1000" next month. You can find all these shows at http://www.schaeffersresearch.com/commentary/podcasts/. You'll see podcasts in the left-hand column and videos in the right-hand column. 10:12 AM Advanced Micro Devices Suffers on Margins Despite topping the Street's earnings estimate by three cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , shares of Advanced Micro Devices (NYSE:AMD) have plunged more than 10 percent this morning. The reason? Analysts believe that semiconductor leader Intel's counter-attack for market share may be taking its toll, as AMD stated that its profit margins and average selling prices for chips were lower during the quarter. Looking at the sentiment, analysts have plenty of room for upgrades. However, at least one brokerage firm has decided to lower its rating on the shares today, as J.P. Morgan downgraded AMD to "underweight Underweight An situation where a portfolio does not hold a sufficient amount of securities to satisfy the accepted benchmark of the portfolio's asset allocation strategy. Notes: " from "neutral." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Zacks AMD had garnered six "buy" or better ratings and 15 "holds" prior to this morning's downgrade. With no "sell" ratings to be found, there is still room for analysts to lower their opinions even further should this trend catch on. 10:57 AM Put Open Interest Jumps for Duke Energy A put/call open interest ratio is simply the ratio of total put open interest to total call open interest. We compute Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ) based on open interest in the front three months only. These near-term options tend to attract a more speculative crowd, the sentiment of which is more useful for shorter-term trading. One of the filters available in our Schaeffer's Plus is the Daily SOIR Changes filter, which lists the stocks that have seen the largest percentage jump in their SOIR overnight. This morning, I was caught by the significant jump in Duke Energy (NYSE:DUK) SOIR from 0.44 to 1.36, which is now an annual high. In trading on Wednesday, open interest at the equity's November 30 put exploded from 615 contracts to nearly 20,600 contracts. The option saw a block of 2,000 contracts cross the tape at 12:41 p.m. Eastern time at 0.28, which was closest to the ask price. Meanwhile, a block of 9,687 contracts traded at 2:43 p.m. at an ask price of 0.35. 12:38 PM A Ratio Backspread on McDonald's The shares of McDonald's (NYSE:MCD) appear to be the focus of what appears to be a ratio backspread. This is like a typical credit spread, except the investor buys more of one option than the other. In this instance, a block of 28,850 contracts crossed the tape at the stock's January 2007 35 put at an ask price of 0.35 around 11:26 a.m. Eastern time. At roughly the same time, the January 40 put had a block of 10,386 contracts trade at a bid price of 1.50 followed by a block 4,039 contracts that traded at 1.55. The total for the January 40 put was 14,425, or exactly one half of the block that traded on the January 35 put. This morning, the company announced third-quarter earnings of $843.3 million, or 68 cents per share, as sales climbed 10 percent to $5.88 billion on a global same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. increase of 5.8 percent. Analysts had predicted a profit of 68 cents per share on revenue of $5.75 billion. At last check, the stock was down 1.67 percent at $40.77. 2:37 PM Wednesday Call Adds Smart Money on Apple Yesterday's heavy call activity on digital music guru Apple Computer (NASDAQ:AAPL) seems to have been the smart money ahead of the company's earnings report. Last night, AAPL reported a fourth-quarter profit of $546 million, or 62 cents per share - blowing away the analyst expectations for 51 cents per share and the whisper number Whisper Number Unofficial and unpublished earnings per share forecasts that circulate among the professionals and wealthy investors on Wall Street. Whisper numbers are especially useful when they differ from the consensus forecast. of 55 cents per share. More than 9,000 calls were added to the stock's October 75 strike yesterday, as AAPL attempted to breach this potential resistance level yesterday. However, it was last night's earnings report that eventually pushed the stock over the edge. There is still plenty of pessimism left in the security's options backdrop, however, as AAPL's Schaeffer's put/call open interest ratio (SOIR) of 1.13 ranks above 81 percent of all those taken during the past year. The next potential level of resistance for the shares appears to be at the 80 level, which is home to some pretty stiff call open interest in the November and January series of options. 3:21 PM Logitech Surges on Solid Earnings Logitech International SA (NASDAQ:LOGI) is having a banner day today, rising more than 12 percent following its second-quarter earnings report. After the close last night, LOGI reported second-quarter net earnings of $49.2 million, or 26 cents per share, on revenue of $502 million. Analysts were expecting a profit of 21 cents per share on revenue of $494 million. Additionally, the computer peripherals firm increased its targets for the year, anticipating a rise of 17 percent. Sentiment is mixed toward LOGI. The stock's short-interest ratio short-interest ratio A ratio that is used for market analysis and is calculated by dividing short interest by average daily volume. Technicians use the short-interest ratio as a tool to determine market direction. looks promising at more than four days to cover, indicating heavy bearish sentiment from the investors. Meanwhile, only six analysts currently follow the shares, doling out three "buys" and three "holds." Any upgrades could further benefit the stock. On the horizon, LOGI stands to benefit from plethora of new video games and next generation console gaming systems slated to be released in the latter half of the year. I have to admit that I'm a long time console video game player, and if I'm not playing with a controller shipped with the console (namely the Playstation series, I'm a die hard Sony (SNE SNe Supernovae (astronomy) SNE Sony Corporation (stock symbol) SNE Syndicat National de l'edition (French Publisher's Association) SNE Society for Nutrition Education ) fan), then I'm using a LOGI made controller. What's more, with SNE not shipping vibrating vibrating, v using quivering hand motions made across the client's body for therapeutic purposes. controllers with its new Playstation 3, there is a nice void in the market that I'm sure LOGI would be happy to fill. Be sure to keep this stock on your radar for the next couple of months. For more information on these stocks or any stock in your portfolio, feel free to visit our Schaeffer's Equity Scorecard feature. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB13C&PAGE=1. Take advantage of the timely Schaeffer commentaries by signing up for 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=PROB13M&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. |
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