Schaeffer's Upon Further Review Highlights the Following Stocks: Caterpillar, Dynamic Materials, Encysive Pharmaceuticals, and SeaChange International.

CINCINNATI -- Today's "Upon Further Review" from Schaeffer's Investment Research focuses on Caterpillar (NYSE:CAT), Dynamic Materials (NASDAQ:BOOM), Encysive Pharmaceuticals (NASDAQ:ENCY), and SeaChange International (NASDAQ:SEAC). "Upon Further Review" is a report that analyzes newsworthy stocks that are generating a lot of attention on Wall Street. "Upon Further Review" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PRSC12M&PAGE=1 .

Upon Further Review:

Caterpillar : Caterpillar (NYSE:CAT) finds itself in an interesting technical pinch that could end to the benefit of the bears. The equity is down almost one percent today on no news. From a technical perspective, the shares have been ushered lower by their declining 10-day moving averages since falling below it on May 12. On the other hand, the shares are desperately clinging to staunch support at the 72 level. Since March 15, the stock has finished only one day below 72. So, what has me believing that the 72 level will finally break for CAT? The security is currently poised to close the week below its 20-week trendline for the first time since mid-November. After a stellar run higher, CAT may be due for a pullback to long-term support at its 10-month trendline at the 66 level - a drop of more than eight percent from its current level.

Click the following link to see a daily chart of CAT since January 2006 with 10-day moving average: http://www.schaeffersresearch.com/wire?ID=16142 .

Dynamic Materials: A positive initiation by one brokerage firm helped spark a strong rally in Dynamic Materials (NASDAQ:BOOM) today. However, it appears to be short covering that is keeping the fire burning. JP Morgan started coverage of the stock at "overweight" today, helping the stock to gap above the 30 level at the open. Yet, short sellers had loaded up on bearish bets toward the security. As of the May reporting, 2.4 million BOOM shares were sold short, accounting for more than 44 percent of the security's float. As these bears jump in to close out their short positions, it helps to drive the shares higher, feeding the equity's momentum.

Click the following link to see a daily chart of BOOM since November 2005: http://www.schaeffersresearch.com/wire?ID=16142 .

Encysive Pharmaceuticals: Encysive Pharmaceuticals (NASDAQ:ENCY) is another equity benefiting from another short-squeeze situation. The Committee for Medicinal Products for Human Use of the European Agency for the Evaluation of Medicinal Products issued a positive opinion recommending Thelin 100 milligram tablets as a once-daily oral treatment for patients with pulmonary arterial hypertension. The shares gapped higher on the positive news, and with the exception of a very brief jump up to seven, the equity is holding onto its gains. Ahead of the report, nearly 14 percent of the security's total float was sold short. One interesting sidenote: ENCY can be an extremely volatile stock. As you can see in the daily chart below, it is prone to making large gaps. Approach with caution.

Click the following link to see an intraday chart of ENCY for June 2, 2006: http://www.schaeffersresearch.com/wire?ID=16142 .

PHLX Semiconductor Index: I want to take a moment to step back and look at an interesting technical development for a sector index. The PHLX Semiconductor Index (SOX) is sitting on strong support in the 450 area. This region is buoyed by the index's 20-month moving average. Furthermore, if you connect the index's lows from October 2002, April 2005, and October 2005, the trendline rests in the 455 region. Also, a third layer of support is coming from the 450 level itself. This area served as resistance in December 2004 and March 2005, and should now act as support.

Click the following link to see a monthly chart of SOX since January 2004 with 20-month moving average: http://www.schaeffersresearch.com/wire?ID=16142 .

SeaChange International: We have one last short-squeeze situation to look at today. SeaChange International (NASDAQ:SEAC) posted lackluster first-quarter earnings last night but stated that it expects to return to profitability in the second quarter. Heading into the report, investors were extremely bearish on the shares, as more than 12 percent of the security's float was sold short. What's more, this accumulation of bearish bets is almost 14 times the stock's average daily trading volume. This morning's pop higher in the shares sent the bears scrambling to buy back their pessimistic positions in an effort to stem their losses, thus adding to the buying pressure on the shares. Technically speaking, a close above the seven level today could prove to be critical for SEAC, as it would mark the stock's first weekly finish above its 10-week trendline since early March.

Click the following link to see a weekly chart of SEAC since February 2006 with 10-week moving average: http://www.schaeffersresearch.com/wire?ID=16142 .

The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRSC12M&PAGE=1 .

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 .