Schaeffer's Midday Options Update Features FedEx and Oracle.

CINCINNATI -- Today's Schaeffer's Midday Options Update features FedEx (NYSE:FDX) and Oracle (NASDAQ:ORCL). 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: FedEx Delivers Gains to Stockholders

A couple of economic reports have come down the pipe this morning. First, U.S. initial jobless claims rose 7,000 during the week ended September 16, narrowly exceeding analysts' expectations for a rise of 6,000. Continuing claims in the September 9 week dropped 29,000 to 2.46 million.

At 10:00 a.m., the U.S. Conference Board reported that its composite index of leading indicators dropped 0.2 percent in August, matching expectations, to a reading of 137.6. This index has posted a decline in five of the past eight months. The index of coincident indicators edged 0.1 percent higher, while the index of lagging indicators rose 0.3 percent. For a brief reminder, leading indicators tend to change ahead of general economic activity, such as stock prices or average work hours. Lagging indicators trail behind the economy, and include the unemployment rate and consumer-price numbers. Finally, coincident indicators fall hand-in-hand with economic activity, and include payroll and personal-income figures.

Most-Active Options Update

At 1:40 p.m. Eastern Time, the Dow Jones Industrial Average (DJIA - 11,544.6) is currently down 0.59 percent and the S&P 500 Index (SPX - 1,320.00) has lost 0.39. Meanwhile, the Nasdaq Composite (COMP - 2,241.4) has given back 0.51 percent. At 1:40 p.m. Eastern Time, 2,565,984 calls have changed hands compared to 2,255,832 puts, equaling a single-day put/call volume ratio of 0.87. The CBOE's equity put/call volume ratio stands at 0.82, while the ISE's ratio comes in at 0.90.

Option Activity Follow-Up

In this column yesterday, I looked at some heavy options action on Oracle (NASDAQ:ORCL). The stock held onto most of yesterday's gains and, at last check, it was up a further 0.17 percent today at $17.96.

FedEx

FedEx (NYSE:FDX) is proving popular in the pits today, with its October 95 put (FDX VS) trading 9,252 contracts by the time we grabbed our figures. Open interest on that contract was 11,372 before the day's trading began. At last check, the stock was trading at $105.79, so these puts are quite a way out of the money.

From a technical perspective, FDX entered an uptrend after it found support at its 80-week moving average in August. Since then, it has added more than eight percent.

So, is it time to buy in? Let's look at the sentiment. Of the 15 covering analysts listed on Zacks, seven see FDX as a "strong buy" and eight see it as a "hold." Now, "hold" is generally seen as a rather cautious rating, so there's room for upgrades, but there's certainly room for downgrades. Overall, analyst sentiment is split.

Just 1.3 percent of the stock's float is sold short, so there isn't much fuel for a short-covering rally. It would take just 1.5 days to cover those short positions at the stock's average daily trading volume, so we're not hoping for any short-covering support.

However, sentiment in the options pits is more skeptical, which is a good sign from our contrarian perspective. The stock earns a Schaeffer's put/call open interest ratio (SOIR) of 1.24, higher than 92 percent of readings taken during the past year, and indicating that sentiment amongst options enthusiasts is close to an extreme of pessimism. What does this mean? There might be some sideline money after all, waiting to pile in and push up the price further.

On our Schaeffer's Equity Scorecard, FDX earns 7.0 out of 10 thanks to this mixed sentiment. Remember that scores close to zero suggest that the path of least resistance lies to the downside, and scores close to 10 point to the upside.

Click here to see a Weekly Chart of FedEx Since October 2005 with 80-week moving average: http://www.schaeffersresearch.com/wire?ID=17389 .

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 .