Schaeffer's Street Chatter Highlights the Following Stocks: Hewlett-Packard, General Electric, and TASER International.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Hewlett-Packard (NYSE:HPQ), General Electric (NYSE:GE), and TASER International (NASDAQ:TASR). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

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Street Chatter:

Hewlett-Packard

Hurd's herd, Hewlett-Packard (NYSE:HPQ) stepped into the earnings spotlight yesterday afternoon, and onto the minds of the message boards today. In the fourth quarter, HPQ earned 51 cents per share, excluding $1.57 billion in restructuring charges and other one-time items, besting the Street's estimate by five cents per share. The quarterly earnings were driven higher by strong sales of its personal computers, servers, and storage gear.

As expected, this news was received warmly by the investing community, with HPQ shares increasing more than one percent. The only factor holding the shares in check would be peak open call interest at the 30 level. With November options expiring after the close today, I took open interest from December through February, where this strike has open interest of 86,571 contracts. Of course, this level will come under fire as the shares continue to gain along their 10-week moving average. This trendline has acted as support throughout HPQ's recent run.

Further support will come from the equity's 10-month trendline as it challenges this options-related resistance. The shares have finished below this support once since December 2004. What's more, this trendline has completed a bullish crossover of its 20-month counterpart, which can be an indication of an impending uptrend.

Should any of these layers of resistance falter, the shares should find support from the 27.50 level, which is the site of peak front-month put open interest (64,601 shares). If this layer of support gives, the 25 level may step up as support, reversing its prior role as resistance.

While HPQ has enjoyed a nice run of late, the options pits have seen pessimism grow. HPQ's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.88, in the 38th percentile. No, this is not inherently bearish, but it is one of the highest readings taken during the past month.

According to Zacks, one half of the 24 analysts covering HPQ rate it a "hold" or worse. This ratings configuration could have pushed the shares lower on an earnings disappointment, but the impressive results could move the bears to the bullish side. If this situation comes to fruition, the shares should see a bit of upside pressure.

The lone caveat to HPQ is the general lack of short-covering support. It would take less than three days to cover the shorted shares, so today's good news has little chance of sparking a short-covering rally. However, this is the only downside I see to the shares.

HPQ has spent the better part of this year outperforming its peers in the Dow Jones Industrial Average (DJIA). However, this solid performer is the subject of some pessimistic sentiment, resulting in a Schaeffer's Equity Scorecard rating of 7.0 out of a possible 10. This rating indicates that the shares may continue to gain as sideline money decides to join the game.

Click the following link to see a Monthly Chart of HPQ Since January 2003 With 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=14634 .

General Electric

This morning, General Electric (NYSE:GE) announced that it is going to jettison a substantial portion of its Insurance Solutions reinsurance division. Don't worry about the Insurance Solutions; it won't be left out in the cold. Swiss Re is purchasing the group for $3.7 billion in cash and notes, $1.17 billion in assumed debt, and more than $3 billion in Swiss Re shares. Reportedly, GE is taking a loss of $2.8 billion on the sale, reflective of the decline in the book value of the Insurance Solutions unit, considered a goodwill write-off and taxes.

Investors have generally applauded this deal, as the conglomerate has seen its stock rise more than two percent in today's trading action. What's more, this news has sent the shares through peak call open interest at the 35 strike for the December and January series. While resistance at the 35 level has been temporarily broken, let's not get too excited here, the shares have yet to advance through the 36 level. The 36 level has rejected repeated advances by the shares dating back as far as 2004. It will take quite a push to get these shares through the 36 level.

Furthermore, GE has generally underperformed its fellow DJIA members throughout the past year. Despite today's jump, I see struggles for this weak performer. Options players would more than likely agree with me as GE's SOIR of 1.07 rates in the 89th percentile.

Notice that today's jump isn't gigantic? That is because GE enjoys little in the way of fuel for a short-covering rally. It would take less than two days to cover the shorted GE shares . . . so 35.75 (GE's intraday high thus far) may be the closest it gets to 36.

Analysts would more than likely beg to differ with my classification of GE as a weak performer. According to Zacks, 85 percent of the analysts covering GE (17 of 20) rate it a "buy" or better. This overwhelming love leaves one way for the shares to go . . . down.

Basically, I think today's rally may continue, but no further than 36. Will the shares be able to hold the 35 level? We shall see, it is the site of peak put open interest in the next two months' series.

Click the following link to see a Weekly Chart of GE Since January 2003: http://www.schaeffersresearch.com/wire?ID=14634 .

TASER International

What would a week of Street Chatter be if I didn't revisit one of my favorite whipping boys, TASER International (NASDAQ:TASR)? After this past Tuesday's closing bell sounded, TASR announced that it will restate its first- and second-quarter earnings results in order to correct its accounting for legal fees and other professional expenses. The company reported that the correction will shift the expenses among the first three quarters of 2005, with expenses expected to increase in the first quarter and decrease in the second. The firm forecast that the restatements will cut its third-quarter expenses to $6.9 million from a previously forecast $7 million.

Before this announcement, the shares were consolidating into their 10-day trendline. This announcement sent the shares below this trendline, which is now capping any advances.

My guess is that TASR can't wait to sing a little Auld Lang Syne when Father Time passes through, as the shares have been bullied lower by their 10-week and 20-week moving averages throughout 2005. Notice how the sparks of life shown by the shares were quickly extinguished by their 20-week trendlines? I don't expect this to stop any time soon.

Again, I find that the options players agree with me, as TASR's SOIR checks in at 1.10, in the 83rd percentile.

What's more, according to Zacks, only one analyst covers the shares. This pittance of coverage affords ample opportunity for the shares to be pushed lower by downgrades . . . of course, the inverse is always possible.

The one area that would concern my inner TASR bear is short interest. TASR's shorted shares comprise nearly 29 percent of the company's total float, boosting the chance for a short-covering spurt. The fuel doesn't stop there, it would take nearly seven days to cover the shorted shares, which heightens the chance of a short-covering rally. Of course, it may take some extremely good news to spook the bears out of their pessimistic positions in order to start said short-covering rally.

Click the following link to see a Weekly Chart of TASR Since November 2004 With 10-Week and 20-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=14634 .

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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 .