Schaeffer's Midday Options Update Features SanDisk.CINCINNATI -- Today's Schaeffer's Midday Options Update features SanDisk (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SNDK). 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: SanDisk Overcomes a Key Line in the Sand Another trading week, another all-time high for the Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance Industrials. The blue-chip index tip-toed higher out of the gate and is currently clinging to marginal gains as it eyes the 12,000 millennium mark. Other market averages have also edged into the black. Checking out crude futures, which are always widely watched, black gold is edging slightly higher today after members of OPEC OPEC: see Organization of Petroleum Exporting Countries. OPEC in full Organization of the Petroleum Exporting Countries Multinational organization established in 1960 to coordinate the petroleum production and export policies of its scurried off to an emergency meeting to deal with the recent slide in oil prices (Goodness forbid we pay under $2.00 at the pumps, right?) At last check, November futures were 13 cents higher at $58.70 per barrel after rising more than one percent during Friday's session. Today's session is a virtual ghost town ghost town, term for any once flourishing American community that has been abandoned, generally for economic reasons. While most of the towns have little or no population, they often contain old buildings, which may serve as tourist attractions. when it comes to economic news. New York's Federal Reserve Bank did say early this morning that its manufacturing index rose to 22.92 in October compared to 13.84 the previous month. This was well above the median expectation among economists, who forecast a modest increase to 15.0. The new orders index edged lower to 11.75 from 13.96, but shipments rose to 22.54 from 20.50. The employment index stretched up to 19.39 from 12.47. The bank noted in a statement that "conditions for New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of manufacturers improved at an accelerated pace in October." Most-Active Options Update At 1:17 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). - 11,975.2) is currently higher by 0.12 percent, or nearly 15 points. 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. - 1,367.74) has edged two points higher, enough to score a new multi-year high for the group. Meanwhile, 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 - 2,364.8) has added 0.35 percent. At 1:17 p.m. Eastern Time, 2,858,988 calls have changed hands compared to 1,952,731 puts, equaling a single-day put/call volume ratio of 0.68. The CBOE's equity put/call volume ratio stands at 0.84, while the ISE's ratio totals 0.69. SanDisk Catching my eye in today's list of notable options activity is SanDisk (NASDAQ:SNDK), a top supplier of flash memory chips. The company is expected to head into the earnings confessional on Thursday evening; First Call targets per-share results of 55 cents on $733 million in sales. As earnings approaches, the stock has the second-highest rating from Zacks (www.Zacks.com), suggesting solid bullish momentum. With no real news moving the shares in Monday's session, SNDK has gained nearly four percent today, hurdling short-term resistance at the 60 level to reach its highest point since mid-May. The shares had been previously thwarted thwart tr.v. thwart·ed, thwart·ing, thwarts 1. To prevent the occurrence, realization, or attainment of: They thwarted her plans. 2. by the 60 mark in mid-September as well as earlier this month. Last Thursday, SNDK was in the news for closing higher on the day despite a brokerage downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. from CIBC CIBC Canadian Imperial Bank of Commerce CIBC Centres Interinstitutionnels de Bilan de Compétences CIBC Commonwealth Institute of Biological Control (Trinidad) CIBC Commercial International Brokerage Company . The 60 mark was formidable from an options-related perspective as well, standing as the site of heaviest open interest in the October series; there were more than 32,000 open call positions at this now in-the-money call (SWF See Flash. (filename extension) swf - /S W F/ The filename extension for Adobe Shockwave Flash animated vector graphics files, common on the World-Wide Web. A rarely used alternative expansion is "Small Web Format". JL) at the outset of today's session. The stock's ability to hurdle through this wall of potential structural resistance is a testament to its strength. These positions will expire on Friday, so SNDK could see some roll-outs to a later series during this expiration week. In today's options trading, however, SNDK has been the focus of some put trading, as contracts have changed hands at the stock's October 60 put (SWF VL) strike. More than 6,000 contracts had traded at the time we grabbed our active-options figures, on open interest of just over 9,000 contracts. Blocks of varying size, from one to 750 contract(s) have crossed the tape today. This activity could be the result of nervous put traders who are bailing out as expiration approaches and the stock overcomes key options-related resistance. A look at tomorrow morning's open-interest translations and implied-volatility shifts will let us know for sure. As the open-interest configuration chart above may suggest, calls are the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae force at work in the SNDK options pits. Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ) for the stock currently stands at 0.79, with 79 open puts for every 100 open calls. This reading, which derives from call and put activity in the October and November series, is lower than 78 percent of the past year's readings, but all could change in a matter of days, when October options are a thing of the past. While the options crowd maintains a preference for the bullish camp, short sellers are a little more skeptical. During the last reporting period, the number of shorted SNDK shares swelled by more than 21 percent to the highest level sine October 2004. This move brought the company's short-interest-to-float ratio above 11 percent, laying the foundation for some short-covering support. Just as today's options activity could be resultant from nervous put buyers heading for the exits, today's dramatic move higher could force the hand of some short sellers. Although CIBC issued its upgrade last week, SNDK remains well-liked up and down Wall Street. The most recent Zacks data reveals 11 "buy" ratings (nine of which are of the "strong" variety), eight "holds," and no "sells." While this limits the chance of a rash of upgrades transpiring tran·spire v. tran·spired, tran·spir·ing, tran·spires v.tr. To give off (vapor containing waste products) through the pores of the skin or the stomata of plant tissue. v.intr. 1. in the wake of the company's earnings report, bullish sentiment is not yet at an extreme. Finally, SNDK earns a Schaeffer's Equity Scorecard rating of 7.0, suggesting the potential for further upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside . Keep an eye on the 60 level to reverse its recent role and act as support over the near term. A positive turn in the earnings confessional could spur additional gains for the shares. Click here to see a daily chart of SNDK since July 2006 and a chart of SNDK short interest since March 2004: http://www.schaeffersresearch.com/wire?ID=17555 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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