Schaeffer's Market Observation Features Synopsys.Business Editors CINCINNATI--(BUSINESS WIRE)--Feb. 19, 2004 Today's Market Observation features Synopsys (Nasdaq:SNPS SNPS Space Nuclear Power System ). 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. Drilling Down on Synopsys Ahead of Earnings As earnings season winds to a close, investors are left to pick among the stragglers for a potential sharp move following a company's announcement. One of the those lonely few is Synopsys (NASDAQ: SNPS). 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. Hoover's, SNPS is a the leading maker of electronic design automation software, which is used by designers of integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs) to develop, simulate simulate - simulation , and test the physical design of ICs before production, and then to test finished products. Semiconductor, consumer electronics, and aerospace companies used the software to improve efficiency and reduce design costs. The firm is currently slated to posted earnings after the close on February 23, with analysts forecasting a profit of 31 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. . This is shy of the company's profit of 34 cents per share for the same period a year ago. However, SNPS has surpassed the consensus estimate for the past five quarters by an average of 7.17 percent, according to Zacks. Looking at the sentiment toward the shares heading into its earnings report, we find some lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. signs of skepticism. While options are lightly traded on this security, the stock's put/call volume ratio has been on the rise over the past month as puts change hands at a faster rate than calls. Furthermore, the equity's Schaeffer's put/call open interest ratio has risen from a late-December low of 0.50 to its current reading of 0.91. This ratio is also higher than more than half of those taken over the past year. Click the following link to see the Put/Call Volume Ratio for SNPS: http://www.schaeffersresearch.com/wire?ID=9501. Click the following link to see the Put/Call Open Interest Ratio for SNPS: http://www.schaeffersresearch.com/wire?ID=9501. And while short interest declined by 15 percent in January, more than 5.6 million shares remain shorted. This accumulation of bearish Bearish Words used to describe investor attitude. A bearish investor believes that a particular asset or the market as a whole will decline in value. bearish bets is more than three times the stock's average daily trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. and could easily fuel a covering rally should the firm issue a strong earnings report. Wall Street is still smitten smit·ten v. A past participle of smite. smitten Verb a past participle of smite Adjective deeply affected by love (for) Adj. 1. with the software company. Zacks reports that six of the 10 analysts following the firm rate it a "buy" or better. This still leaves room for more upgrades and/or additional coverage that could boost the security. Technically speaking, the security has outperformed the Nasdaq Composite The Nasdaq Composite is a stock market index of all of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S. on a monthly basis since August 2000. SNPS has moved higher along its 10-week moving average and could now use it as a springboard to shoot higher. Should this trendline fail, the equity has support at a former resistance level (34.50). In addition, the stock's rising 10-month trendline rests at the 32.50 level. Click the following link to see the Weekly Chart of SNPS since January 2003 with 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=9501. Another interesting development is that the shares are trading above peak call open interest in the February and March series at the 35 strike. This sharply reduces the chances of the security encountering options-related resistance. Furthermore, February peak put open interest rests at the 35 strike while March peak put open interest resides at the 32.50 strike. This accumulation of bearish positions could add another layer of support to these regions. With support below it and pessimism pessimism, philosophical opinion or doctrine that evil predominates over good; the opposite of optimism. Systematic forms of pessimism may be found in philosophy and religion. growing toward the stock, a strong earnings report and/or outlook for 2004 could help to send SNPS shooting higher. The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday
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 Contrarian An investment style that goes against prevailing market trends by buys assets that are performing poorly and selling when they perform well. Notes: A contrarian investor believes that the people who say the market is going up do so only when they are fully 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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