Schaeffer's Midday Options Update Features Bristol-Myers Squibb.CINCINNATI -- Today's Schaeffer's Midday Options Update features Bristol-Myers Squibb Bristol-Myers Squibb (NYSE: BMY), colloquially referred to as BMS, is a pharmaceutical corporation, formed by a 1989 merger between pharmaceutical companies Bristol-Myers Company, founded in 1887 by William McLaren Bristol and John Ripley Myers in Clinton, NY (both were (NYSE NYSE See: New York Stock Exchange :BMY BMY Bristol Myers Squibb ). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. 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=PRMOU13M&PAGE=1 . Options Update: Heavy Call Activity on Bristol-Myers Squibb A decent amount of economic news hit the Street this morning, starting with the Institute for Supply Management (ISM See ISM band. ) manufacturing index for September. The reading dropped to 52.9 percent in September from 54.5 percent in August. The latest reading is the lowest since May 2005. Economists forecast a drop to 53.7. The National Association of Realtors The National Association of Realtors (NAR) is made up of residential and commercial realtors who are brokers, salespeople, property managers, appraisers, and counselors, and others working in the real estate industry. reported that pending sales of U.S. existing homes increased by 4.3 percent in August, which indicates that the housing market could be stabilizing. Pending home sales have dropped 14.1 percent during the past year. Finally, it was reported that August construction spending Construction Spending An economic indicator that measures the amount of spending towards new construction. Released monthly by the U.S. Department of Commerce's Census Bureau, it looks at residential and non-residential construction in the private sector, and state and federal at increased 0.3 percent in August. The increase came despite a 1.5-percent decline in outlays on private residential building projects. Forecasts called for an adjusted annual rate of 0.1 percent in August. Most-Active Options Update At 1:13 p.m. Eastern Time, the Dow Jones Industrial Average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. (DJIA DJIA See Dow Jones Industrial Averager (DJIA). - 11,722.4) is currently 0.36 percent higher and the S&P 500 Index (SPX (Sequenced Packet EXchange) The transport layer protocol in the NetWare operating system. Similar to the TCP layer in TCP/IP, it ensures that the entire message arrives intact. SPX uses NetWare's IPX as its delivery mechanism. - 1,337.93) has added 0.16 percent. Meanwhile, the Nasdaq Composite (COMP - 2,258.4) is flat. At 1:14 p.m. Eastern Time, 1,499,620 calls have changed hands compared to 1,370,589 puts, equaling a single-day put/call volume ratio of 0.91. The CBOE's equity put/call volume ratio stands at 1.06, while the ISE's ratio comes in at 0.77. Bristol-Myers Squibb According to Yahoo!Finance, Bristol-Myers Squibb (NYSE:BMY) engages in the discovery, development, licensing, manufacture, marketing, distribution, and sale of pharmaceutical and other health-care products in the United States and internationally. BMY operates in three segments; Pharmaceuticals, Nutritionals, and Other Healthcare. Last week, BMY and Gilead Sciences (GILD) announced that they have agreed to market Atripla in Canada, subject to approval by Health Canada, the country's health agency. Atripla is used to treat HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. and combines BMY's Sustive and GILD's Truvada. GILD will record revenues from Atripla's future net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and BMY will record revenues at percentages relative to its individual product contribution to the drug. The pharmaceutical firm makes an appearance on our notably active call options list this afternoon, thanks to heavy activity on its November 27.50 call (BMYKY). With volume of 13,641 on this contract, it now wears the mantle of peak call open interest in the front three-month option series. While 27.50 is the site of peak call open interest, the stock must first contend with the 25 level before any hope of fighting resistance at 27.50. The 25 level has spent the better part of the past two years stifling any advances. Yes, there have been times that the shares have closed above 25, but it hasn't happened all that often. The 25 level has actually provided resistance since the middle of 2002. Yes, the shares advanced through this resistance and actually sniffed the rarified rar·i·fied adj. Variant of rarefied. Adj. 1. rarified - having low density; "rare gasses"; "lightheaded from the rarefied mountain air" rarefied, rare air near the 30 level. However, the stock quickly retreated and continued to wallow wallow mud bath frequented by pigs, elephants, red deer, hippopotami as a cooling aid. near or below the 25 level. Let's take a look at how the Street feels about BMY by looking at its sentiment rundown: * Percent of analysts tracked by Zacks who rate the stock with a "hold": 82% * Number of analysts tracked by Zacks: 17 * Short interest as a percent of float: 1.13% * 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. : 1.57 * Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ): 0.29 * SOIR percent rank: 0% * Schaeffer's Equity Scorecard: 5.0 There is only one aspect of this sentiment backdrop that I consider attractive, analyst rankings. Should the 16 analysts ranking BMY a "hold" or worse issue upgrades, there is a chance for upside momentum, which could break through the 25 level. Optimism runs amok Amok (ā`mŏk), in the Bible, post-Exilic Jewish family. in the rest of BMY's sentiment backdrop. The speculative options crowd's optimism is at a 52-week low of 0.29. I am concerned about this level of optimism, as it leaves the door wide open for a sentiment shift, which could translate into selling pressure. Finally, there is little in the way of short-covering support should the shares retreat from 25. Roughly one percent of BMY's float is sold short, and it would take 1.5 days to buy back these shorted shares. A rejection at 25 could send the shares spiraling lower, which could be disastrous. BMY boasts a Schaeffer's Equity Scorecard ranking of 5.0 out of a possible 10. Yes, this reading is middle of the road and suggests that the stock will continue moving sideways. While you may want to keep your hands off BMY, watch for a rejection at 25 (again), which could give you the opportunity to jump into some bearish positions. Click here to see a Weekly Chart of BMY Since May 2003 and a Monthly Chart of BMY Since January 2001: http://www.schaeffersresearch.com/wire?ID=17459 . 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 and get entered to win an iPod Nano. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU13M&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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