Schaeffer's Street Chatter Highlights the Following Stocks: Charles Schwab, Microsoft, and Pfizer.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Charles Schwab (NYSE:SCH), Microsoft (Nasdaq:MSFT), and Pfizer (NYSE:PFE). "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. Brokerage name Charles Schwab (NYSE:SCH) made the pages of The Wall Street Journal today as the newspaper reported that UBS AG may be looking to acquire Schwab's capital markets unit and Soundview Technology's stock-research division for a combined buyout offer of $265 million.

Despite this news, SCH has dropped two percent and is trading beneath its 10-day moving average for the first time in several sessions. The stock is, however, clinging to longer-term support from its 20-week trendline. SCH hurdled atop this moving average during the week ended August 20 after spending more than six months languishing beneath the intermediate-term trendline.

The sentiment picture is currently unclear on SCH. Schaeffer's put/call open interest ratio (SOIR) for SCH stands at 0.55, which is higher than 60 percent of the past year's worth of readings and therefore fails to offer a definitive read. There are 20 million SCH shares sold short at the present juncture, which equates to a short-interest ratio of three days to cover, which is neither remarkably high nor notably low.

A look at analysts' ratings indicates a hint of bearish sentiment from the Wall-Street crowd. Of 14 analysts following the stock, only one has given SCH a "buy" rating, while five list it as a "sell" and eight name it a "hold."

Click the following link to see the Weekly Chart of SCH Since February 2004 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=10971.

2. Microsoft (Nasdaq:MSFT) announced some news today about its newest operating system, currently being developed under the code name Longhorn, which is expected to hit shelves in 2006. The software giant revealed today that this latest generation in the Windows line will come without the data-storage technology known as WinFS.

From a technical perspective, MSFT has been bounding between levels of resistance and support for the past two years. On the upside is the 29-30 region, which has capped all rally attempts in the shares since October 2002. From below is an ascending trendline, currently perched at the 26 mark, defined by higher lows in the shares. These two trendlines have created a three-and-a-half point (or 13 percent) range for the equity. MSFT will likely resolve this consolidation at some point in the near future, either by dropping below the ascending trendline or surging beyond the 30 mark. Currently, the security is trading near the mid-point of this range.

The SOIR for MSFT has been surging higher since early April, which implies an increased desire for put positions (which are typically bearish in nature). The sentiment indicator now weighs in at 0.58, which is only 12 percent shy of an annual peak. Contrarily, the number of shorted MSFT positions dropped lower last month to 13.5 million, resulting in a trivial short-interest ratio of less than two days to cover. This factor suggests a note of complacency among the investing public. Finally, outright bullishness exists on Wall Street, as evidenced by the 23 "buy" or "strong buy" ratings on MSFT. There is currently just one "hold" rating on the stock along with one outright "sell."

Click the following link to see the Weekly Chart of MSFT Since September 2002: http://www.schaeffersresearch.com/wire?ID=10971.

3. Pfizer (NYSE:PFE) earned U.S. Food and Drug Administration approval for its Simplicef product, which is an antibiotic used for treating canine skin infections. PFE is following the broader market lower today and has dropped more than half a percent. This slight pullback was enough to send the stock below its 10-week moving average, which the stock overcame in last week's trading. PFE shares are still hovering above their 10-day and 20-day moving averages, which recently completed a bullish crossover after PFE surged above them earlier this month.

The equity's SOIR has been spiraling lower since mid-July, indicating falling pessimistic sentiment from the options crowd, as exemplified by a lessening degree of put positions. Specifically, the SOIR stands at 0.42, which is lower than 87 percent of the past year's worth of readings. Falling pessimism is also reflected in the stock's short-interest numbers, which dropped 35 percent last month to 27.9 million, which is less than one percent of the equity's total float. Wall Street is cheery on the stock, with 16 "buys," six "holds," and zero "sells," according to Zacks (www.Zacks.com).

Click the following link to see the Weekly Chart of PFE Since March 2004 With 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=10971.

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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.