Schaeffer's Street Chatter Highlights the Following Stocks: eResearch Technology, Gap and Wendy's International.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: eResearch Technology (NASDAQ:ERES), Gap (NYSE:GPS), and Wendy's International (NYSE:WEN). "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. eResearch Technology (NASDAQ: ERES) is a biotechnology research firm offering computer software and scientific research services to pharmaceutical and medical device firms. This morning, Advest downgraded its rating on the shares to a "buy" from a "strong buy." The brokerage firm said that the U.S. Food and Drug Administration's latest guidance for the cardiac safety assessment services market may hinder ERES's progress in procuring new contracts.

ERES is reacting negatively to this news, plunging more than 18 percent to a new annual low. The stock has dropped beneath its 20-month moving average for the first time since October 2001 and has breached support at the 14 level.

The short-selling community, which had a vested interest in the equity's pullback, may be celebrating today. Following the latest reporting period, the number of shorted ERES shares reached 9.6 million, accounting for 22 percent of the stock's total float and equaling a short-interest ratio of nearly seven times the equity's average daily volume.

Options players, on the other hand, took the opposite route. Following September options expiration, the stock's Schaeffer's put/call open interest ratio (SOIR) plunged to 0.61, which is near the bottom one-third of the past year's worth of SOIR data.

Click the following link to see the Weekly Chart of ERES Since June 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=11289.

2. Apparel retailer Gap (NYSE: GPS) is also down in the dumps today following a brokerage downgrade from Wall Street. First Albany reduced its rating on GPS to a "neutral" from a "buy," saying it expects sluggish sales to continue for the retailer as we advance into the fourth quarter. Prior to this downgrade, GPS was named a "buy" at eight brokerage houses, while 12 rated the stock a "hold."

The shares have been in decline mode for about three months since reaching a new annual peak the week of June 25. Recently, the stock attempted to charge at its 10-week moving average and was subsequently rebuffed by this descending trendline.

On the sentiment front, the stock's SOIR has been on the rise since mid-April. The indicator currently weighs in at 1.33, which means that total put open interest (for options in the front three-months series) outweighs total call open interest by a fairly hefty margin. This is higher than 60 percent of the past year's worth of readings. The number of GPS shares sold short dropped by 15 percent last month to 24 million, but it would still take more than four days to cover all of these positions in the event that GPS surges higher on good news or an altered technical trend.

Click the following link to see the Weekly Chart of GPS Since October 2002 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=11289.

3. Wendy's International (NYSE: WEN) is hosting its annual analyst briefing today. The fast-food concern is hoping to build some confidence into the Wall Street community after lagging same-store sales figures and a recent lowered earnings-per-share guidance. One UBS analyst reported that the firm's margins have declined since five years ago. In other news, WEN will roll out new side choices for its combo meals in an effort to offer healthier alternatives.

After moving along a parabolic course during August, WEN suffered a bearish gap earlier this month after the aforementioned earnings news. Since then, the shares have shown little signs of recovery, shuffling sideways below their 10-day and 20-day moving averages.

Not surprisingly, quantitative indicators are showing a fair amount of pessimism toward the stock. The equity's SOIR has moved to 0.93, which is near a six-month high and in the 94th annual percentile. The security's short interest levels surged 55 percent last month to about two million. As far as Wall Street is concerned, there are seven "buy" ratings on the stock, eight "holds," and a solitary "sell" designation.

Click the following link to see the Daily Chart of WEN Since July 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=11289.

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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.