Schaeffer's Daily Market Blog Features Novatel Wireless, Qualcomm, Apollo Group, Google, and Arthrocare.

CINCINNATI -- Among the stocks featured in the June 28 edition of Schaeffer's Market Blog are Novatel Wireless (NASDAQ:NVTL), Qualcomm (NASDAQ:QCOM), Apollo Group (NASDAQ:APOL), Google (NASDAQ:GOOG), and Arthrocare (NASDAQ:ARTC). Schaeffer's Market Blog is just one of the many free market commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1M&PAGE=1 .

Schaeffer's Market Blog for Tuesday, June 28, 2005:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1 .

10:39 AM Novatel Wireless Rebounds

Novatel Wireless (NASDAQ:NVTL) is seeing continued buying action in early trading. The stock is up more than three percent today on the heels of yesterday's 3.5-percent gain. NVTL was one of the market's biggest gainers in May, moving from 8.96 to 12.47, a gain of 39 percent. After making a short-term top at 14.30 on June 10, the stock pulled back to a key area of support at 12. That 12 level had acted as resistance in March 2005 and support in January and February. It is also the site of the NVTL's intermediate-term 10-week moving average, a trendline that has been key in directing the stock's trend in 2005. Pessimism also exists on the stock as evidenced by high short interest. NVTL's short interest remains near an all-time high and amounts to a whopping 18 percent of the stock's float.

10:47 AM Qualcomm Complacency?

Qualcomm (NASDAQ:QCOM) is fast approaching its mid-April lows and there are definite signs of complacency in this stock. Complacency can be seen in the form of its put/call open interest ratio and its equity volatility index (VIX) readings.

The put/call open interest ratio on QCOM stands at 0.65 and the 12th percentile for the past year's worth of readings. Below is a chart of the current put/call ratio.

Furthermore, QCOM's VIX readings are nowhere close to previous levels when QCOM was at present levels (32-34). This is an additional sign of complacency.

1:16 PM Apollo: Tries Hard But Could Do Better

Yesterday, Apollo Group (NASDAQ:APOL) was the featured stock in our Options Update observation. I said that the stock performance had been lackluster, but the sentiment was optimistic, and so the quarterly earnings, which were announced today, needed to be good. As it turns out, they were good, but not good enough. APOL reported that third-quarter profit rose 40 percent. Net income came in at $141.8 million, or 77 cents per share, beating Thomson First Call's consensus estimate of 74 cents per share. Total revenue for the quarter advanced 25 percent to $619 million from $497 million a year ago. Enrollment for degree programs was up 23 percent from a year ago.

So why is the stock price down by 3.4 percent this morning? It seems APOL's projections for the fourth quarter failed to impress the optimists. The company projected earnings at 67 cents per share, which was in line with the analysts' estimate. It projected revenue at $605 million to $620 million, whereas analysts had hoped for $622 million.

So, there you have it. APOL did very well, but still left the Street disappointed. This is why we study sentiment so closely. That one small miss, amid strong optimistic sentiment, moved the stock price a long way.

Digging deeper into yesterday's activity shows that option players aggressively added out-of-the-money puts ahead of the earnings report. There were 2,400 additions at the July 75 strike yesterday. The peak front-month open interest also resides at the 75 level, with approximately 6,000 contracts of open interest at this level.

This level may serve as options-related support, although the stock has made a nice recovery off this morning's low. At last check, APOL was trading $1.77 lower on the day to $78.50.

1:36 PM Go, Go, Google!

With shares of Google (NASDAQ:GOOG) blowing through $300, we're compelled to wonder how much is too much to pay for this stock. Despite investors getting burned on high flying stocks back in 2000, there doesn't seem to be that much skepticism toward GOOG. Options players in particular are becoming increasingly optimistic toward the issue. Over the past two trading sessions, call option volume has nearly tripled put volume. Now I wouldn't go stand in the way of a stock with this much momentum, but I wouldn't be surprised to see a sharp pullback sooner rather than later.

2:22 PM ArthroCare Moves Higher on Huge Short Interest

According to Hoover's, Arthrocare's (NASDAQ:ARTC) proprietary Coblation technology uses radio-frequency energy to remove soft tissue from the body. Its Arthroscopic Surgery System lets surgeons use specialized wands to focus the energy and minimize damage to nearby healthy tissue, simultaneously sealing small, bleeding vessels. First used in arthroscopic procedures to repair joints, the electrosurgery system product line now includes equipment used in ear, nose, and throat procedures; cardiology and gynecology; spinal and neurological surgery; and cosmetic surgery. ARTC has been a stellar long-term performer, gaining more than 250 percent since January 2003. After losing more than five percent last week to fall to support at 33, the stock is rebounding with the market today. ARTC is up more than five percent. Short sellers have lined up strongly against the company, however. Short interest rose 13 percent last month to an all-time high. ARTC's short-interest ratio is a huge 17 days. The 6.3 million shares sold short amount to a monstrous 26 percent of the stock's float.

The above are just a few of today's Daily Market Blog entries. Click here to read all of today's Daily Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1 .

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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 .