Schaeffer's Street Chatter Highlights the Following Stocks: Neoware Systems, Broadcom, Microsoft, Activision, and Atari.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Neoware Systems (NASDAQ:NWRE), Broadcom (NASDAQ:BRCM), Microsoft (NASDAQ:MSFT), Activision (NASDAQ:ATVI), and Atari (NASDAQ:ATAR). "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:

Activision

Atari (NASDAQ:ATAR) announced yesterday that it has signed a licensing agreement with Activision (NASDAQ:ATVI) to include two of their classic video game hits, Pitfall!(R) and River Raid(R) in Atari's forthcoming Atari(R) Flashback 2. The Atari Flashback 2 game line-up includes more than 40 games spanning a variety of 8-bit genres. Developed by Atari, the Atari Flashback 2 is scheduled to ship in August for under $30 at retailers nationwide. ATVI also recently released a video game based on Marvel Enterprises comic book characters the Fantastic Four.

Technically speaking, the shares have rallied back into resistance at the 18 level after a brief pullback to support. This region has halted the stock's ascent since early February. However, the equity has recently regained the support of its 10-week and 20-week moving averages, pulling them into a bullish cross. Furthermore, this resistance level has allowed the security to consolidate into support at its rising 10-month moving average. In fact, ATVI has vaulted forward along its 10-month and 20-month trendlines since June 2003.

Click the following link to the Weekly Chart of ATVI since August 2004 with 10-Week and 20-Week Moving Averages: www.schaeffersresearch.com/commentary/observations.aspx?ID=13613 .

From a sentiment standpoint, there are still some signs of pessimism following the shares. The equity's Schaeffer's put/call open interest ratio (SOIR) of 0.47 is higher than more than three-quarters of the readings taken during the past 12 months. Furthermore, short interest shot 35 percent higher in June to 5.7 million shares. On the other hand, the equity's short-interest ratio rests at 2.25 days to cover, offering only light short-covering support. Wall Street hasn't completely jumped on the stock's bandwagon either. According to Zacks, 11 analysts give the equity a "buy" rating and seven still rate it a "hold." Any upgrades from these remaining holdouts could push the equity through resistance at the 18 level.

Looking ahead, Zacks gives ATVI's estimated earnings release date as July 20. Analysts are currently forecasting a loss of three cents per share for the quarter compared to its year-ago gain of six cents per share. Historically, the firm has been a stellar performer in the earnings confessional. ATVI has surpassed the consensus estimate in each of the past five quarters by an average of 64 percent. Another strong report and/or outlook for the rest of the year could also help shove the shares higher.

Broadcom

This morning, Alacritech, Microsoft (NASDAQ:MSFT), and Broadcom (NASDAQ:BRCM) today announced that they have entered into agreements that settle all outstanding disputes between Alacritech and MSFT, as well as provide MSFT and BRCM access to Alacritech's patent portfolio relating to scalable networking. Collectively, the agreements enable the three companies to work together to further expand the range of customer solutions available for scalable networked systems.

From a technical perspective, the stock has broken through resistance at the 37 level and resumed its uptrend along its 10-day and 20-day moving averages. What's more, BRCM has clawed its way higher along the support of its 10-week trendline since early May. From a longer-term perspective, the security has broken back above its 10-month and 20-month trendlines, leaving them poised for a bullish cross.

Click the following link to see the Daily Chart of BRCM since April 2005 With 10-Day and 20-Day Moving Averages: www.schaeffersresearch.com/commentary/observations.aspx?ID=13613 .

Sentiment toward the security is somewhat mixed at the moment. The stock's SOIR rests at 0.57 and is lower than 60 percent of the readings taken during the past 52 weeks. While it's still far from an extreme, option players are clearly leaning toward the bulls' camp. Meanwhile, short interest edged five percent higher in June to 11.5 million shares. However, the stock's short-interest ratio rests at a paltry 1.48 days to cover, offering little in the way of potential support. Checking in on Wall Street, we find that the brokerage firms following BRCM are evenly split. Zacks reports that 12 analysts award the company a "buy" rating, while 10 give it a "hold" and two rate it a "strong sell." A continuation of the stock's uptrend could win over some of the remaining pessimistic brokerage houses, leading to fresh upgrades. However, a break below short-term support could send many of the bulls in the stock's sentiment backdrop stampeding for the exits.

On the fundamental front, BRCM is slated to step into the earnings spotlight on July 21 after the market close. The Street is expecting a 25-cent profit for the quarter, down a dime from its year-ago gain. However, the company has surpassed the consensus estimate in each of the past five quarters by an average of seven percent.

Neoware Systems

According to Hoover's, Neoware Systems (NASDAQ:NWRE) makes Linux- and Windows-based thin-client computers. The firm's terminals rely on centrally managed servers for computing power, eliminating the need for local storage drives and individual software installations and updates. NWRE offers remote management applications and emulation software, as well as consulting and training services. The company announced this morning that it expects higher fiscal fourth-quarter revenue compared with a year ago due to strong demand for its thin-client products. NWRE projects fourth-quarter revenue of about $22 million, up from $17.1 million a year earlier. The Street is predicting sales of $21.7 million. For the quarter, the company still expects a gross profit margin of 40 percent to 45 percent. NWRE anticipates continued revenue growth as it enters fiscal 2006, due in part to its momentum at the end of the current year. The company plans to issue its fourth-quarter earnings in early September.

Technically speaking, NWRE has surged higher during the past several days, breaking through resistance in the 10.30 area. The equity has also gained ground on the support of its 10-day moving average and left its weekly trendlines poised for a bullish cross. Pulling out for a longer-term view, we find that the equity has broken above its 10-month and 20-month moving averages, drawing them into a bullish cross.

Click the following link to Daily Chart of NWRE since May 2005 With 10-Day and 20-Day Moving Averages: www.schaeffersresearch.com/commentary/observations.aspx?ID=13613 .

The stock continues to draw little notice from investors. There are currently only 733 options contracts open in the front three months of options. What's more, there are just three brokerage firms following the security, awarding it two "buy" and one "hold." Meanwhile, short interest has steadily decreased, leaving the total number of NWRE shares sold short at a two-year low. However, with a short-interest ratio of 28.61 days to cover, a short-squeeze situation could result in a sharp rally in the shares.

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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 .