Schaeffer's Market Observation Features Gateway, Comcast, AstraZeneca.

CINCINNATI -- Today's Market Observation Gateway (NYSE:GTW), Comcast (NASDAQ:CMCSA), and AstraZeneca (NYSE:AZN). 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 .

Gateway

According to Hoover's, Gateway (NYSE:GTW) makes desktop and portable PCs and network servers for consumer and enterprise customers. The company also offers third-party peripherals including printers, as well as consumer electronics such as digital music players and plasma televisions. With November options set to expire at the end of today's session, it appears that GTW's November 5 call was the site of some heavy liquidation activity yesterday. With volume of 8,878 contracts changing hands, open interest at this front-month option dropped overnight from 11,471 to 4,283. Pessimism has been the norm from the options crowd, with GTW's Schaeffer's put/call open interest ratio (SOIR) of 0.59 arriving ahead of 92 percent of all those taken in the past year.

Shot sellers are also betting against the equity, as short interest increased by nine percent over the past month to a new annual high. Not only would it take nearly seven days to cover these bearish bets, but the 13.45 million GTW shares sold short account for more than five percent of the stock's total float. This hefty accumulation could provide ample fuel for a short-covering rally. Wall Street has lent its voice to the bearish chorus, as Zacks reports that eight of the 11 covering analysts rate the shares a "hold" or worse.

Turning to the technical picture, GTW has put together a solid run over the past several weeks, advancing more than 52 percent since August 13. Aiding in the equity's quest for higher ground is its rising 10-day and 20-day moving averages, which the stock has breached on only two occasions during this time frame. However, there is one caveat to this story, as the stock must now contend with staunch overhead resistance in the 6-6.50 area. This region has troubled the shares since January 2002, most recently rejecting GTW in April. Today the shares are pulling back to their rising 20-day moving average. If the security can stage a meaningful rebound from this trendline, an unwinding of pessimistic sentiment could be enough to bolster the shares though this area of long-term resistance.

Click the following link to see a Daily Chart of GTW Since April 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=11801 .

Comcast

Hoover's states that Comcast (NASDAQ:CMCSA) is the largest U.S. cable TV operator, well ahead of number-two Time Warner. CMCSA's cable division offers cable, high-speed Internet, and voice services. The firm also has programming interests such as the Outdoor Life Network and a stake in E! Entertainment Television. Like GTW, CMCSA was also the target of heavy call activity in yesterday's session. Options speculators sent more than 7,800 of these bullishly oriented options across the tape at the stock's January 30 strike, prompting open interest to jump from 21,978 to 29,473 contracts overnight. In fact, due to this bullish activity, the equity's SOIR plunged from yesterday's reading of 0.83 in the 28th percentile to 0.72 in the third percentile.

More bullish activity can be found among the short-selling community, as the number of CMCSA shares sold short declined by seven percent in the most recent reporting period. It would now take 3.64 days to cover the 22.7 million CMCSA shares sold short, offering a very modest potential for some covering support. Wall Street has also jumped on the bullish bandwagon. According to Zacks, 14 of the 22 covering analysts rate the shares a "buy" or better.

Some degree of optimistic sentiment should be expected on CMCSA, as the stock has rallied sharply since hitting a 52-week low of 26.25 in mid-August. The stock has rallied higher along the support of its 10-week moving average, and has even taken out potential resistance in the round-number 30 area. But CMCSA must still overcome overhead resistance at the 31 level, which the shares have not closed above since February. Investors will want to keep a close eye on this level, as a breach of resistance here could squeeze the remaining short sellers and provide lift for the security in the form of additional buying pressure.

Click the following link to see a Weekly Chart of CMCSA Since February 2004 With 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=11801&obspage=2 .

AstraZeneca

Yesterday, AstraZenca (NYSE:AZN) became the latest target in the witch hunt brewing in the pharmaceutical sector. According to a report on the Dow Jones Newswire, an FDA employee (testifying in front of the Senate Finance Committee) raised safety concerns on a hand full of new drugs, with AZN's cholesterol-lowering drug Crestor among them. On the news, the stock plunged more than eight percent, killing the fledgling rally the shares had put together since setting an annual low in mid-October. The move has taken AZN back below resistance at its declining 10-week and 20-week moving averages, which have troubled the shares for much of this year.

Naturally, yesterday's warning shot from the FDA representative prompted a plethora of put activity in the options pits. AZN's most-active contract was the December 50 put, with more than 5,877 contracts changing hands. When the smoke cleared, open interest at this soon to be front-month strike surged from 6,442 contracts to 9,488. AZN's SOIR was also taken for a ride, skipping from 1.56 on Thursday to 1.74 today. This new reading ranks above 60 percent of all those taken in the past year. And while short sellers were relatively quiet during the past month, it would still take more than five days to cover the 10.6 million AZN shares sold short. However, given yesterday's plunge, these investors may not be in any rush to cover these bearish bets. Meanwhile, Wall Street has given AZN the cold shoulder, as six of the 10 covering analysts rate the shares a "hold" or worse.

Click the following link to see a Weekly Chart of AZN since January 2004 with 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=11801&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. http://www.schaeffersresearch.com/addinfo .

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 .