Schaeffer's Market Observation Features Barr Pharmaceuticals, International Game Technology, and Maytag.

CINCINNATI -- Today's Market Observation features Barr Pharmaceuticals (NYSE:BRL), International Game Technology (NYSE:IGT), and Maytag (NYSE:MYG). Schaeffer's Market Observations are market-based reports that provide insight and analysis from a unique and unbiased perspective. Market Observations are published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. To receive a free email notification each time a new commentary is written about one of the featured stocks or any of your favorite stocks, click on the following link: http://www.schaeffersresearch.com/addinfo .

Barr Pharmaceuticals

According to Hoover's, Barr Pharmaceuticals (NYSE:BRL) makes about 100 generic drugs in such areas as anti-infectives, oncology, cardiology, psychotherapeutics, and women's health. The company has placed an emphasis on providing generic oral contraceptives and currently has about 20 such drugs on the market. The security witnessed some heavy trading of bearish bets on Thursday, as traders snapped up the stock's January 45 put. Open interest at this strike popped from 300 to 2,057 contracts. This surge in put activity helped to lift the equity's Schaeffer's put/call open interest ratio (SOIR) from 0.69 to 0.87 in the 47th percentile. Overall, sentiment toward the security still has a bullish slant. Over the most recent reporting period, short interest dipped by nine percent to 2.3 million shares. With a short-interest ratio of only 2.25 days to cover, it is unlikely the stock will benefit from any short-covering support. Furthermore, Wall Street remains quite smitten with the firm, as nine of the 16 analysts following BRL rate it a "buy" or better.

After rallying along the support of its 10-day moving average since the beginning of November, the shares have dropped below this short-term trendline and are headed for a test of potential support at their rising 20-day moving average at the 44.50 level. If this support level should fail, the equity's 10-week trendline waits in the wings in the 41 area. From a longer-term perspective, BRL is poised to close the month above both its 10-month and 20-month moving averages for the first time since February.

Click the following link to see a Daily Chart of BRL since November 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=12154 .

International Game Technology

International Game Technology (NYSE:IGT) is the number-one designer and manufacturer of slot machines. The firm also produces video gaming, player tracking, and accounting systems. The security attracted some bullish options speculators yesterday, as open interest at the stock's February 35 call jumped from 405 to 3,692 contracts. This spike in call activity comes in contrast to the relatively bearish sentiment that continues to follow IGT. The equity's SOIR of 0.67 is currently higher than two-thirds of the readings taken over the past 52 weeks. Furthermore, short interest increased by six percent in December to 9.6 million shares, giving the stock a solid short-interest ratio of 4.82 days to cover. On the other hand, brokerage firms are quite enamored of the firm. According to Zacks, 14 of the 16 analysts following IGT rate it a "buy" or better.

From a technical perspective, it appears that the shares are attempting to break out of their recent funk. The security has broken above its 10-day and 20-day moving averages, which had troubled IGT for the past month. What's more, the stock has rebounded off support at its 20-week moving average, breaking above its 10-week trendline. Moving out even further, the equity is currently being squeezed between support at its rising 20-month moving average and resistance at its 10-month trendline. Traders will want to keep a close watch on these two support levels. A breach of overhead resistance at the stock's 10-month could result in a sharp rally higher as bears are forced to cover their positions in order to limit their losses.

Looking ahead, the firm is slated to step into the earnings confessional again on January 20, according to Zacks. The Street is forecasting a profit of 33 cents per share, matching its year-ago gain. Historically, the firm has met or surpassed the consensus estimate for the past five quarters.

Click the following link to see a Monthly Chart of IGT since April 2002 With 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=12154&obspage=2 .

Maytag

Maytag (NYSE:MYG) is determined to bounce back. The security has rallied higher along its 10-day and 20-day moving averages since mid-October, dashing ahead more than 38 percent. What's more, the stock's recent rally has pulled its 10-week and 20-week trendlines into a bullish cross. This technical formation often signals further gains for a stock. However, the equity must still conquer overhead resistance at its declining 10-month moving average at the 23 level.

Despite the security's trek higher over the past couple of months, investors remain pessimistic toward the shares. The equity's SOIR checks in at 1.39, as puts easily outnumber calls in the front three months of options. This reading is also higher than all but 10 percent of those taken over the past 52 weeks. What's more, traders piled into the stock's February 20 put on Thursday, adding almost 2,500 contracts. Furthermore, short interest continues to creep higher. The 10.1 million shares sold short now account for more than 13 percent of the security's float and is almost 10 times its average daily trading volume. An unwinding of these bearish bets could add some serious lift to the stock's rally. Not to be left out, Wall Street is also against the company. Zacks reports that six of the seven analysts following MYG rate it a "hold" or worse, leaving ample room for potential upgrades. This combination of strengthening technicals and overwhelming pessimistic sentiment has bullish implications from a contrarian perspective.

Click the following link to see a Daily Chart of MYG since June 2004 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=12154&obspage=2 .

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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 .