Schaeffer's Street Chatter Highlights the Following Stocks: CIENA, ImClone Systems, and NetEase.com.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: CIENA (NASDAQ:CIEN), ImClone Systems (NASDAQ:IMCL), and NetEase.com (NASDAQ:NTES). "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:

1. CIENA (NASDAQ:CIEN) has been the talk of the Street today, thanks to its first-quarter earnings report. The telecommunications concern reported a loss of 10 cents per share, down from last year's first-quarter loss of 16 cents per share. CIEN's revenue marked a 43-percent increase thanks to strong growth in its core-optical transport, core switching, and data networking. Excluding one-time items, CIEN would have matched the consensus estimate of a loss of five cents per share. CIEN also announced that it expects revenue to rise between five and seven percent for the second quarter.

Turning toward CIEN's technicals, we see that the firm has been wallowing beneath continued resistance. Since January 2002, the stock has been stuck below the resistance of its 10-month and 20-month moving averages. What's more, the equity's weekly chart shows that the resistance of its 10-week trendline consistently pushed CIEN lower from February 2004 to October 2004. In January, CIEN slipped back below the resistance of this trendline and has rebounded off of support at the 2.50 level to test this resistance.

When looking at the firm's technical indicators, it may be no surprise to see that the analysts are less than enthusiastic about CIEN. According to Zacks, the titan of light transmission receives 11 "holds," four "sells," and seven of the extremely pessimistic "strong sell" ratings. One could assume that today's favorable earnings report could cause this plethora of pessimists to change their minds. While this is a distinct possibility, a short-covering rally can not be assumed since CIEN's short-interest ratio stands at a minute 0.76 days to cover.

Turning to the company's Schaeffer's put/call open interest ratio (SOIR), we see that options players are more optimistic than the analysts. CIEN's SOIR comes in at 0.29, in the 79th percentile. Optimistic call contracts outnumber puts nearly four to one in the front three months of options.

Click the following link to see the Weekly Chart of CIEN Since December 2003 With 10-Week Moving Average:

http://www.schaeffersresearch.com/wire?ID=12579 .

2. ImClone Systems (NASDAQ:IMCL) is making waves today, thanks to a coverage initiation at "overweight" from Morgan Stanley. The brokerage also started IMCL with a target price of $57. Turning to last week's news, IMCL reported that Philip Frost, M.D., Ph.D., was joining the firm as Executive Vice President, Chief Scientific Officer. It was also announced that Eric K. Rowinsky, M.D., will join IMCL as Senior Vice President, Chief Medical Officer. Prior to that news, IMCL had been reiterated at "neutral" by Prudential.

Options players hold the biotech firm in high regard, as its SOIR reads 0.48, lower than 65 percent of the readings taken over the past year. What's more, the company's short interest dropped 13 percent last month to hit 7.4 million shorted shares. As a result, IMCL's short-interest ratio moved to 5.19, more than enough time to spark a short-covering rally. Analysts are also optimistic toward IMCL, according to Zacks, Martha Stewart's favorite stock receives five "strong buys," one "buy," five "holds," and one "sell" and "strong sell."

IMCL's weekly chart shows that it has been fighting resistance at its 10-week and 20-week trendlines since the middle of July. This has resulted in the equity falling back to its January 2004 level of support in the 35-40 region. On the rare occasion that IMCL has moved above the resistance of the shorter-term 10-week, it has been battered lower by resistance at the 20-week trendline. Further resistance is evident when looking at the firm's monthly chart. IMCL has found resistance at its 10-month and 20-month moving averages. In August, the firm fell below the 10-month and was subsequently pushed below the resistance of its 20-month trendline by October. One final level of resistance can be found on the company's daily chart. IMCL's 10-day moving average is poised to make a bearish cross of its 20-day moving average. While its 10-day trendline is currently acting as support, a move of this sort is often the harbinger of an impending downtrend.

Click the following link to see the Weekly Chart of IMCL Since January 2004 With 10-Week and 20-Week Moving Averages:

http://www.schaeffersresearch.com/wire?ID=12579&obspage=2 .

3. Chinese web portal NetEase.com (NASDAQ:NTES) is also making news. The web wizard reported fourth-quarter earnings of 45 cents per share, compared to last year's earnings of 38 cents. NTES beat the consensus estimate of 43 cents per share. The company announced that it saw $31.6-million worth of sales in the fourth quarter, matching the Street's expectation. The firm's sales were driven by its online game division, which accounted for $23.8 million of the company's sales. NTES then announced that it plans to focus on its Westward Journey online version and its Fantasy Westward Journey online games. Focusing on these games throughout the year, rather than launching new games, will allow NTES to continue its rapidly growing game trajectory, while there will be little increase in market spending. This news prompted Pacific Growth Equities analyst, Jason Brueschke, to raise his sales projection for 2005 to $177 million from his previous estimate of $164 million. Brueschke also raised his full-year 2005 profit estimate for NTES to $2.47 from $2.13 per share. Looking ahead, the Internet interest announced that it expects sales of $34.5 million to $35.5 million (including a wireless-sales decline), along with earnings between 44 and 46 cents per share.

Options players have jumped on the NTES bandwagon, as its SOIR of 0.51 is in the 96th percentile. This optimism is also reflected in the company's short-interest activity. Pessimism NTES unwound as the stock saw a 10-percent decrease in short interest and, as a result, its short-interest ratio stands at 4.93. This allows enough time to spark a short-covering rally should a further unwinding of pessimism occur.

The raging optimism from options players is mirrored by the analysts. According to Zacks, five analysts cover NTES, four of whom rate the company a "strong buy," while one rates it a "buy." This allows for a move to the negative side of the sentiment spectrum.

The good news of the past two days has pushed NTES through resistance at its 10-day and 20-day moving averages. These trendlines had bullied NTES consistently lower after a bearish cross in early January. Throughout November 2004, the firm moved higher thanks to the dual support of these trendlines. Additional resistance for NTES can be seen on its weekly chart. The equity's 10-week trendline completed a bearish cross of its longer-term 20-week trendline two weeks ago. As mentioned earlier, this kind of move hints at a future downtrend. This notion is supported by the stock's action in May 2004, when a similar bearish cross was seen. After this cross was completed, NTES's trendlines served to move the company lower until a bullish cross moved the company higher. The firm seems poised to test the resistance of its 10-week moving average, but can this positive news provide enough fuel for NTES to break through?

Although NTES is enjoying a bit of a renaissance thanks to recent news, the company can still be considered an underperforming stock. This combination of underperformance and rampant optimism results in a bearish Schaeffer's Equity Scorecard (available on Schaeffer's Gold) ranking of 2.0 out of a possible 10.0.

Click the following link to see an Equity Scorecard and the Weekly Chart of NTES Since February 2004 With 10-Week and 20-Week Moving Averages:

http://www.schaeffersresearch.com/wire?ID=12579&obspage=2 .

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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 .