Schaeffer's Midday Options Update Features InfoSpace, Air Products, Corinthian Colleges, Temple-Inland, and Cisco Systems.

CINCINNATI -- Today's Schaeffer's Midday Options Update features InfoSpace (NASDAQ:INSP), Air Products (NYSE:APD), Corinthian Colleges (NASDAQ:COCO), Temple-Inland (NYSE:TIN), and Cisco Systems (NASDAQ:CSCO). 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. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1 .

Options Update: Will the Cisco Kid Ride Again?

The market got off to a bit of a slow start thanks to the Commerce Department's durable goods data. In March, U.S. durable goods orders declined 2.8 percent, marking the largest drop since September 2002. According to analysts surveyed by MarketWatch, durable goods orders were expected to see a 0.3-percent rise. This is the third straight decline for durable-goods orders. What's more, February's data was revised to a drop of 0.2 percent from its original reading of an increase of 0.3 percent.

Information Overload 

A disappointing second-quarter earnings forecast has helped usher InfoSpace (NASDAQ:INSP) lower by more than 20 percent. The Internet phone directory reported first-quarter earnings of $2.52 per share compared to last year's same-quarter earnings of $1.16 per share. This year's first-quarter earnings received a boost from a sizeable legal settlement, excluding this gain, earnings came in at 45 cents per share. The consensus estimate for INSP's earnings was 37 cents per share. Revenue for the quarter saw an 81-percent gain, from $48.1 million last year to $87 million this year. INSP then turned its attention to the second quarter, forecasting a profit between 36 and 29 cents per share on revenue between $83 million and $85 million. The Street believes INSP will see earnings of 42 cents per share on revenue of $91.7 million in the quarter.

Hot Air

Air Products (NYSE:APD) reported second-quarter earnings that rose 24.1 percent, totaling 75 cents per share with revenue that checked in 7.9-percent higher at $2 billion. APD cited higher gas volumes and higher chemicals pricing for the rise in profit. Unfortunately, the flame of strong earnings was quickly extinguished by a strong puff of air from the Street, which expected earnings of 76 cents per share. APD expects to earn between 77 and 82 cents per share in the third quarter and between $3 per share and $3.15 per share for the full-year 2005. Analysts expect earnings of 82 cents per share in the third quarter and $3.13 per share in full-year 2005.

Thou Shalt Not Forecast Lower-Than-Expected Earnings

Corinthian Colleges (NASDAQ:COCO) reported third-quarter earnings of 24 cents per share, which fell in line with the average analyst recommendation. Revenue trekked 17-percent higher than last year's $217.3 million in revenue. Unfortunately, the $254 million in revenue fell short of the consensus estimate for $259.6 million. COCO then drew the wrath of the economic gods by forecasting fourth-quarter earnings of 20 to 22 cents per share, lower than the analysts' projected earnings of 24 cents per share. Investors have smited COCO, to the tune of a drop of more than 14 percent.

Earnings With Heart

Temple-Inland (NYSE:TIN) showed no need for the oil can today in its first-quarter earnings report. The firm reported earnings of 39 cents per share compared to last year's earnings of 11 cents per share. After adjusting for special items, the TIN man creaked ahead to earnings of 52 cents per share. This topped the consensus estimate of 47 cents per share. Revenue in the quarter rose to $1.2 billion from last year's reported revenue of $1.15 billion. Investors have taken the earnings to heart, as TIN has gained more than two percent in trading thus far.

Most-Active Options Update

At 1:36 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,202.6) has moved 0.51 percent higher, followed by the S&P 500 Index (SPX - 1,158.57), which has gained 0.59 percent. The Nasdaq Composite (COMP - 1,934.8) was higher by 0.38 percent. By 1:34 p.m., 1,639,797 calls and 1,795,271 puts had crossed the tape, for a composite put/call ratio (across all six options exchanges) of 1.09. The CBOE put/call volume ratio for equity options stood at 1.16.

Cisco Systems

Cisco Systems (NASDAQ:CSCO) dominates the landscape of equipment used to link networks and power the Internet. According to Hoover's, CSCO relies on routers and switches, which includes equipment based on Ethernet, Gigabit Ethernet, Token Ring, and ATM technologies. CSCO also produces remote access servers, IP telephony equipment used to transmit data and voice communications over the same network, optical networking components, and network service and security systems. The lord of token rings primarily sells its products to large enterprises and telecommunications service providers, however, it also has products designed for small businesses and consumers. Yesterday, it was reported that CSCO is going to buy privately held Sipura Technology for $68 million in cash. CSCO plans on using Sipura's technology to integrate more voice features into products from its Linksys home-networking division. CSCO plans on using Sipura's technology to help develop its Voice over Internet Protocol (VoIP) technology to develop more VoIP functionality.

So far today, 4,721 of CSCO's May 17.5 put (CYQ QW) have crossed the tape, more than doubling the company's Schaeffer's put/call open interest ratio (SOIR). Yesterday, CSCO's SOIR checked in at 1.04, while today, the sultan of switches sports a healthy SOIR of 2.18. CSCO's percentile ranking moved from 77 yesterday to 100 today. Further optimism is evident in the unwinding of pessimism found in the company's short interest backdrop. The 15.62-percent decrease results in a paltry short-interest ratio of 0.87, so don't expect a pop from a short-covering rally. According to our sentiment indicators, this bearish SOIR is the only thing going for CSCO.

This flock of pessimism from the options pits is not echoed by the analyst community. According to Zacks, CSCO earns 11 "strong buy," nine "buy," and 10 "hold" rankings from the almighty analysts. Should this oogle of optimists decide to change their lubby-dubby feelings toward CSCO, watch for a bit of a pessimistic push. This uber-optimistic analyst sentiment mixes with trepidation from the options community to give us a rather skeptical backdrop toward CSCO.

Where would we like to start on the technical problems for CSCO? Let's go short to long, daily to monthly, on the charts. CSCO's daily chart shows that the company is currently being pushed lower by its 10-day and 20-day trendlines. These moving averages have been acting as resistance toward the shares for the better part of the past five months. Yes, CSCO has rebounded off the 17 level and is currently above its 10-week trendline, but the 20-day looms overhead ready to push the stock lower. More resistance is found on CSCO's weekly chart. Since February 2004, the firm has been able to mark only eight weekly closes above both these trendlines. Currently, CSCO is not only receiving resistance from both of its trendlines, but the 18 level looks to push CSCO lower should the stock breach its 10-week trendline. The 18 level acted as support at different times last year, so watch for this level to now continue its role of resistance toward the stock. Finally, we have CSCO's monthly chart. After stretching to hit a near-term high of 29.39 in January 2004, CSCO has steadily decreased until finding support at the 17 level. This level survived a test two months ago, however, the security's 10-month trendline has descended toward the 18 level and looks to force CSCO lower. What's more, CSCO's 10-month trendline has completed a bearish cross of its 20-month trendline, so watch for this downtrend to continue.

Click on the following link to see the Monthly Chart and Equity Scorecard of CSCO since January 2003 with 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=13051 .

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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 .