Schaeffer's Street Chatter Highlights the Following Stocks: Whirlpool, Maytag, Merrill Lynch, and BlackRock.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Whirlpool (NYSE:WHR), Maytag (NYSE:MYG), Merrill Lynch (NYSE:MER), and BlackRock (NYSE:BLK). "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:

Whirlpool

Whirlpool (NYSE:WHR) was down two percent at last check on news reported by The Wall Street Journal that the Department of Justice might sue the company over its planned $1.7 billion acquisition of Maytag (NYSE:MYG).

"The deal has been seen as a bellwether for antitrust enforcement by the Bush administration," the Journal said. "Combining Whirlpool and Maytag would create a market giant producing half of the nation's dishwashers and more than 70% of clothes washers and dryers."

The shares fell this morning, breaching the support of WHR's 10-day moving average. That 10-day trendline made a bullish cross of its 20-day counterpart soon after the company announced strong fourth-quarter results on February 2. But now there's a possibility that the stock might fall back to the 20-day moving average in search of support.

On the weekly chart, we can see some room for a pullback to the 10-week or 20-week trendlines too, though if the 10-week holds, the decline will not be very significant. The stock made an all-time high last week, so a few days of consolidation shouldn't surprise anyone.

From Zacks I see that analysts award:

--2 "strong buys"

--0 "buys"

--3 "holds"

--1 "sell"

--0 "strong sells"

This coverage is rather thin. It leaves room for upgrades or for further coverage, both of which might lend some lift to the stock.

Short interest fell a couple of percent last month but nearly 10 percent of the stock's float is sold short, and it would take 12.3 days to cover the 6.6 million WHR shares sold short. We monitor short interest because sometimes good news comes along and pushes a stock's price up sharply. This might shake out some of the short sellers, who suddenly see that it will cost more money to buy their stocks back than they tucked under the mattress when they originally sold the positions. If these turncoat short sellers suddenly transform into buyers, they can push the stock price yet higher and perhaps provoke further short covering. We usually take note when the short-interest ratio passes five.

The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.78 indicates that calls outnumber puts by a small margin in the February and March series of options. WHR does not trade April options yet. This ratio is higher than just 22 percent of readings taken during the past year, so it suggests optimism in the options pits.

So there we have it. The stock has had its ups and down since the turn of the millennium. The trend is to the upside overall, but it's been a rough ride at times. In recent days, the stock has been advancing, but today's pullback below the 10-day moving average is a concern, and I'd like to see a recovery before the end of the day.

There's enough short interest to offer fuel for a short-covering rally, and there's room for analyst upgrades to drive the price higher, but the optimism in the options pits means that the stock will have to advance merely to meet expectations. Overall, the stock earns itself a Schaeffer's Equity Scorecard rating of 8.0 out of a possible 10, which suggests that the path of least resistance leads to the upside. But remember that we recalculate the scorecard for every stock every day.

Click the following link to see a Daily Chart of WHR Since October 2005 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=15288 .

Maytag

Earlier today in Street Chatter I talked about Whirlpool. Now I'm back with a look at Maytag (MYG), the other firm involved in this acquisition story. MYG was already in a short-term downtrend before The Wall Street Journal broke its story. Earlier this month, the stock was rejected by its 10-day and 20-day moving averages, and the past few days have seen it move consistently lower.

From Zacks I see that analysts award:

--1 "strong buy"

--0 "buys"

--5 "holds"

--1 "sell"

--0 "strong sells"

With six out of seven analysts rating the stock a cautious "hold" or worse, this coverage has to be considered pessimistic. From our contrarian perspective, this is a sign that the stock might rise on good news. Remember that "hold" is sometimes a rather euphemistic rating, for brokers whose grandmothers never taught them that "if you can't say anything nice, don't say anything at all."

Short interest jumped 14.4 percent during January, and it would take 10.4 days to cover the eight million MYG shares sold short. There's enough fuel here for quite a short-covering rally.

The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.39 indicates that puts outnumber calls in the February, March, and April series of options. This ratio is higher than 86 percent of readings taken during the past year, so it is reassuringly pessimistic. From our contrarian perspective, we see low expectations as a good thing.

The stock earns itself a Schaeffer's Equity Scorecard rating of 7.0 out of a possible 10. Scores close to 0.0 suggest a downside move, and scores close to 10.0 suggest an upside move. If the WHR offer goes through, the MYG shares will change hands for $21 each, remember, and today they dropped as low as $15.50.

Click the following link to see a Daily Chart of MYG Since June 2005 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=15292 .

Merrill Lynch

Earlier today in Street Chatter I talked about Whirlpool and Maytag. Now, I'm back with a look at our third stock of the day. Our final stock of the day is Merrill Lynch (NYSE:MER), which made the news on reports that it is in advanced talks to acquire a substantial stake in money manager BlackRock (NYSE:BLK) for approximately $8 billion, according to those famous "people familiar" with what's going on behind closed doors. If the deal goes through, it will create a $1 trillion fund-management firm, making the merged company the largest retail brokerage firm in the United States. We're hearing that a deal could be announced as soon as tomorrow.

So how does MER look at the moment? From a technical perspective, the stock is in a clear uptrend, though just now it is squished between support from its 20-day moving average and resistance at its 10-day moving average.

Also, it is poised to challenge an all-time high set in January 2001.

From Zacks I see that analysts award:

--3 "strong buys"

--5 "buys"

--4 "holds"

--0 "sells"

--0 "strong sells"

With eight out of 12 analysts rating the stock a "buy" or better, we have to recognize a risk of downgrades here.

Short interest is very modest, and with less than 1.5 percent of the stock's float sold short, it's hard to imagine any short-covering support. The Schaeffer's put/call open interest ratio (SOIR) for MER is 0.84, higher than 61 percent of readings taken during the past 12 months. The stock earns itself a Schaeffer's Equity Scorecard rating of 7.0 out of a possible 10, suggesting more gains to come.

Click the following link to see a Daily Chart of MER Since June 2005 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=15296 .

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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 .