Schaeffer's Option Activity Watch Features: Coca-Cola, Integrated Device Technology, and IAC/InterActiveCorp.

CINCINNATI -- Today's Schaeffer's Option Activity Watch Features: Coca-Cola (NYSE:KO), Integrated Device Technology (NASDAQ:IDTI), and IAC/InterActiveCorp (NASDAQ:IACI). The Option Activity Watch is a report that takes a closer look at three equities appearing in our most unusual option activity report from the previous day. The Option Activity Watch is published on 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=PROAW1M&PAGE=1 .

Schaeffer's Option Activity Watch:

Coca-Cola

Option activity spiked on Coca-Cola (NYSE:KO) calls yesterday, as more than 11,313 of these bullishly oriented options crossed the tape at the stock August 45 strike. Despite the high volume, only 6,610 calls actually translated into new open positions, pushing open interest at this front-month strike to 34,377 contracts. The stock's Schaeffer's put/call open interest ratio (SOIR) took a hit from this optimistic activity, dipping from 0.81 in the 84th percentile to today's perch at 0.74 in the 71st percentile.

Our other sentiment indicators for the sultan of soft drinks are rather mixed. While short interest increased by 26 percent during July, it would still take a paltry 2.37 days to cover the 13.4 million KO shares sold short. Meanwhile, Wall Street has doled out seven "buys" and seven "holds," according to Zacks. With this configuration, brokerages are poised for a move to either side of the bull/bear equation.

Technically speaking, KO has put together a nice run higher during the past several weeks, rising along the support of its 10-day moving average since July 7. However, the stock has been in a long-term downtrend for quite some time, setting a series of lower highs and lower lows. Looking at the monthly chart, this trend becomes painfully obvious. Furthermore, KO must now contend with its descending 20-month moving average, a trendline that has caused the stock trouble in the past.

Click the following link to see a Monthly Chart of KO since December 2002 with 20-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=13747 .

With a positive short-term technical trend, a negative long-term technical trend, and a mix of sentiment data, it should come as no surprise that KO has earned a Schaeffer's Equity Scorecard rating of 5.0 out of 10.0.

Integrated Device Technology

According to Yahoo! Finance, Integrated Device Technology (NASDAQ:IDTI) engages in the design, development, manufacture, and marketing of semiconductor solutions that help accelerate packet processing for network services. Calls were pouring in for this semiconductor concern in the options pits yesterday, as open interest at the stock's September 12.50 call surged by 5,322 contracts to 5,420. This activity had a profound effect on IDTI's SOIR, as this ratio plunged overnight from 0.71 in the 56th percentile to today's reading of 0.43 in the 13th percentile.

Prompting this run higher in optimism was a Street-beating earnings performance after the close on Wednesday, when IDTI bested the consensus estimate for first-quarter earnings by a penny per share. Naturally, the stock itself gapped higher on the open and proceeded to rally more than eight percent higher, drawing its 10-day and 20-day trendlines into a bullish cross. However, while the stock was just cresting its 10-week and 20-week moving averages for the first time since early June, the shares hit a snag at resistance in the 11.50 area. This troublesome region has proven to be a point of resistance and congestion for the equity in the past.

Click the following link to see a Daily Chart of IDTI since April 2005 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=13747 .

Turning back to the stock's sentiment outlook, we find very little that is encouraging from a contrarian standpoint. Despite the fact that short interest rocketed 151 percent higher during July, it would still take less than two days to cover the resulting 12.3 million IDTI shares sold short. Elsewhere, Zacks reports that five of the eight covering analysts rate the shares a "buy" or better, leaving ample room for potential downgrades. As a result of this heavy degree of optimism amid a rather uncertain technical outlook, IDTI has earned the lowest Schaeffer's Equity Scorecard rating of zero out of 10.

IAC/InterActiveCorp

We round out today's option coverage with IAC/InterActiveCorp (NASDAQ:IACI). Yahoo!Finance reports that IACI operates a diversified portfolio of brands in the travel, retailing, ticketing, personals, media, financial services, real estate, and teleservices industries worldwide. The stock was also the target of heavy call volume during yesterday's session. Some 5,119 calls were added to the security's August 27.50 strike, pushing open interest at this front-month option higher to 7,452 contracts. This optimism is rather prevalent for IACI, as its SOIR of 0.40 ranks below 87 percent of all those taken in the past year.

Technically speaking, IACI has rallied nicely along the support of its 10-day and 20-day moving averages recently - despite a brief hiatus below this tandem support in late June/early July. However, during this period, the equity managed to find support at its rising 10-week trendline. Furthermore, the security is even poised to log its first monthly close above its 10-month and 20-month moving averages since October 2003.

Click the following link to see a Daily Chart of IACI since May 2005 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=13747 .

On the sentiment front, things are a bit mixed, but a plethora of short positions could be just what the stock needs to push higher. Despite a six-percent decline in short interest during July, the 55.2 million IACI shares sold short still account for more than 22 percent of the stock's total float and would take 11.78 days to cover. This collection of bearish bets could be ample fuel for a short-covering rally on any positive news for the equity. Meanwhile, Wall Street is firmly entrenched in the bullish camp, as 10 of the 15 covering analysts rate the shares a "buy" or better. While this could be a concern for IACI, the stock's recent uptrend and large accumulation of short positions have earned it a Schaeffer's Equity Scorecard of 7.0 out of 10.

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is 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 .