Schaeffer's Midday Options Update Features Cypress Semiconductor.CINCINNATI -- Today's Schaeffer's Midday Options Update features Cypress Semiconductor Cypress Semiconductor is a semiconductor design and manufacturing company. It began operations in 1982 and listed publicly in 1986. Two years later, the company shifted over to the New York Stock Exchange under the symbol, (NYSE: CY). (NYSE NYSE See: New York Stock Exchange :CY). 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 A flash-based digital music player from Apple, introduced in 2005. Like larger iPod models, the nano has a color screen. Although the nano name suggests ultra-small "nanotechnology," the iPod shuffle is actually smaller. See iPod. . http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU13M&PAGE=1 Options Update: This Chip Needs Less Dip As we head into the latter half of the trading session, the major market indices have rebounded from their prison in negative territory to find some positive purchase. Economic data was at least partly responsible for the early weakness, as the Energy Department said that natural-gas inventories rose by a lower-than-expected 19 billion cubic feet for the week ended October 20. November natural gas rose 12.7 cents to a seven-week high of $7.82 per million British Thermal Units British thermal unit, abbr. Btu, unit for measuring heat quantity in the customary system of English units of measurement, equal to the amount of heat required to raise the temperature of one pound of water at its maximum density [which occurs at a temperature of 39. , on the news. Elsewhere, prices of new homes in the U.S. dropped at their fastest pace in 36 years during September, equating to a rise in sales to the highest level in three months. The government reported that sales of new homes unexpectedly rose 5.3 percent in September to a seasonally adjusted Seasonally adjusted Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. annual rate of 1.075 million, the most in three months and well above the 1.05 million expected by economists. However, sales in June, July, and August were revised down by total of 67,000 annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. , continuing a pattern of downward revisions to the originally reported data. Most-Active Options Update At 1:44 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). - 12,150.5) has added 15.9 points, while 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. - 1,386.06) is up 3.84 points. 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. (COMP - 2,367.4) has added 10.8 points. At 1:45 p.m. Eastern Time, 3,205,345 calls have changed hands compared to 2,380,151 puts, equaling a single-day put/call volume ratio of 0.74. The CBOE's equity put/call volume ratio stands at 0.74, while the ISE's ratio weighs in at 0.80. Cypress Semiconductor Boy, oh boy! Did I ever call a top to Cypress Semiconductor (NYSE:CY) back on October 12? The stock was struggling with overhead resistance at the 20 level following a long run higher, and all the sentiment indicators Sentiment indicators The general feeling of investors about the state of the market, such as whether they are bullish or bearish. pointed to the possibility that CY could eventually break above this region. That's not to say that this isn't still the case, just that the stock has a longer trek ahead of it now. For a bit of a recap, I've listed the sentiment indicators that I was looking at on October 12 below: Sentiment Rundown Rundown A summary of the amount and prices of a serial bond issue that is still available for purchase. rundown A list of available bonds in a municipal issue of serial bonds. for CY from October 12: * Percent of analysts tracked by Zacks who rate the stock with a "buy": 25% * Number of analysts tracked by Zacks: 12 * Short interest as a percent of float: 8.50% * 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. : 5.46 * Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ): 0.66 * SOIR percent rank: 94% * Schaeffer's Equity Scorecard: 8.0 This sentiment backdrop has changed quite significantly since October 12, though not everyone has grown more 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 following the company's disappointing trip to the earnings confessional. Current Sentiment Rundown for CY: * Percent of analysts tracked by Zacks who rate the stock with a "buy": 33% * Number of analysts tracked by Zacks: 12 * Short interest as a percent of float: 13.19% * Short-interest ratio: 2.52 * Schaeffer's put/call open interest ratio (SOIR): 0.52 * SOIR percent rank: 70% * Schaeffer's Equity Scorecard: 5.0 Despite the post-earnings decline of more than 11 percent, it seems that investors have become more bullish on CY. Options players have added calls at a faster rate than puts during this time frame, a fact evidenced by today's volume of more than 11,000 calls at the stock's November 17.50 strike. Open interest at this front-month contract stands at roughly 15,000 contracts, so if today's interest from options speculators continues at this pace, we could see open interest at this strike rise following translation. Meanwhile, optimism crept higher among Wall Street analysts, with CY garnering an upgrade despite its recently disappointing fundamental and technical performance. Further confusing matters is the fact that the stock's short-interest ratio declined, while the float/short ratio jumped to more than 13 percent. Basically, there was more activity for CY shares last month, with much of that activity resulting in more shorted CY shares. This does indicate that the stock has more potential covering support/rally fuel, but I would need to see some technical life from the security before I jumped on the bullish bandwagon. Technically, CY's earnings plunge halted at the 16 level, where the shares have enjoyed long-term support/resistance. This region is also home to the stock's ascending 10-month moving average, which is obviously lending a supportive hand. While I believe that CY could rebound from this area, the shares must first overcome resistance in the 17.50 area. This region is home to some technical resistance and a preponderance pre·pon·der·ance also pre·pon·der·an·cy n. Superiority in weight, force, importance, or influence. Noun 1. preponderance of call open interest, making an upside move more difficult, but not impossible. Personally, CY is still a good buy or hold at this point. Looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a bearish take? Watch for a breach of support at 16. I would see this as a definite reason to sell CY if you haven't jumped ship already. Click here to see a Monthly chart of CY since September 2004 with 10-month and 20-month moving averages: http://www.schaeffersresearch.com/wire?ID=17628 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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