Schaeffer's Street Chatter Highlights the Following Stocks: Citigroup, Birch Mountain Resources, and Rambus.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Citigroup (NYSE:C), Birch Mountain Resources (AMEX:BMD), and Rambus (NASDAQ:RMBS). "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.

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=PRSC12M&PAGE=1 .

Street Chatter:

Citigroup

Early this morning, Citigroup (NYSE:C) stated that its Shanghai branch received approval from China's regulators to be an interbank foreign exchange market maker. Separately, the company is reportedly leading a consortium offering $3 billion for a stake in Chinese bank Guangdong. Despite the news, however, C is pulling back with the rest of the market today, and was last seen down nearly 0.5 percent.

Technically speaking, C has begun to stall considerably lately. The shares struggled with resistance in the 50 area, and have now begun to consolidate beneath the resistance of their 10-day and 20-day moving averages. Furthermore, these trendlines have just completed a bearish crossover - a negative technical formation that often portends additional weakness in the shares.

Pulling back a bit further, we can see that C has largely been trapped between the 50 level and the 43 level since April 2004. And while the shares appear to have found the support of their 10-week trendline recently, prior performance reveals that this moving average merely forestalls an inevitable pullback to the lower rail of this range.

Sentiment toward C rests on rather shaky ground. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.08 indicates that puts outnumber calls in the front three months of options. However, this ratio ranks just below the midpoint of its annual range, arriving in the 43rd percentile.

Elsewhere, short interest jumped 26 percent during December, adding to the 39-percent increase from the prior month. However, despite these gains in the number of share sold short, it would still take a measly three days to cover the 50 million C shares sold short, leaving very little in the tank for short-covering support.

Since C is a large-cap, blue-chip stock, we can naturally expect Wall Street to be extremely bullish on the shares. Checking in with Zacks (www.Zacks.com) confirms this suspicion, as 12 of the 17 covering analysts covering the stock rate it a "buy" or better. Any downgrades would certainly not work in C's favor.

Click the following link to see a Daily chart of C since October 2005 with 10-day and 20-day Moving averages and a weekly chart of C since April 2004 with 10-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=14902 .

Birch Mountain Resources

I decided to take a look at a relatively unknown stock for our second pick of the day. Birch Mountain Resources (AMEX:BMD) has garnered some rather heavy message-board attention today, despite a lack of any news crossing the wire. According to Hoover's, BMD was exploring and developing precious metal properties, but is now concentrating on industrial mineral properties (primarily lime and concrete aggregate) in the Athabasca region of northern Alberta. Formed in 1994, the company has three major divisions: Mineral Exploration, Mineral Technology, and Industrial Minerals. In 2004 Birch Mountain Resources announced the Hammerstone limestone project, which is waiting regulatory approval.

As I suspected when I selected BMD, sentiment is a bit on the thin side. There isn't enough options data for an annual percentage rank on its SOIR, but the reading has risen rather sharply from its December 2 reading of 0.08 to today's perch at 0.36. As you know, rising pessimism is viewed as a positive indicator from our contrarian perspective.

I also wasn't able to dig up December short interest figures for BMD, but the stock saw a rather impressive 456-percent increase in bearish bets during November. However, the security is apparently trading pretty quickly right now, as it would take less than one day to cover this wealth of pessimism on the shares.

Zacks (www.Zacks.com) reports that no one on Wall Street has yet added BMD to their cover list, and this could be a boon for the equity. Any positive initiations from fresh coverage could be just what BMD needs to attract some additional buying power.

Turing to the technicals, I find it hard to believe that very few investors have taken notice of BMD. The shares have rallied more than 300 percent along their 10-week and 20-week moving averages since May. The stock has pulled back a bit recently, feeling the drag of the overall market selling pressure. But its 10-week moving average appears poised to support BMD. Should the shares bounce from this intermediate-term trendline and continue to move higher, a trip into the double digits may just garner that added attention and send BMD skipping higher.

Click the following link to see a weekly chart of BMD since May 2005 with 10-week and 20-week moving averages: http://www.schaeffersresearch.com/wire?ID=14902 .

Rambus

Our final stock of the day is semiconductor concern Rambus (NASDAQ:RMBS) , and I will try to avoid the obvious legal and court room puns for once. Until recently, RMBS had enjoyed a nice run higher along its 10-day and 20-day moving averages. This run began when the shares rebounded off support in the 10 area back in September.

However, the shares were stymied in the 18 region, and have since begun to pull back, breaking below their 10-day and 20-day trendlines in the process. The stock has found some support in the 16 region, which could be bolstered by its rising 10-week moving average. RMBS has not closed a week below this intermediate-term trendline since September.

Sentiment on RMBS remains rather mixed. The security's SOIR of 0.30 indicates that calls more than triple puts in the front three months of options. What's more, this ration ranks below 91 percent of all those taken in the past year. However, the roughly 10 million RMBS shares sold short account for more than 11 percent of the stock's total float and would take nearly six days to cover at its average daily trading volume.

Wall Street, however, has decided to ignore the shares, handing out a mere two "hold" ratings. Those who are familiar with investing in RMBS know that it is a rather rough ride with dealing with the shares. The thing that concerns me at this point, despite the potential for negative news from the court room, is that the security's SOIR has not reversed course despite the recent weakness in the shares. I think we could see a correction for RMBS in the near term, taking some of the steam out of the equity's recent bullish strength.

Click the following link to see a weekly chart of RMBS since September 2005 with 10-week and 20-week moving averages: http://www.schaeffersresearch.com/wire?ID=14902 .

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. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRSC12M&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 .