Schaeffer's Midday Options Update Features IBM, Watson Pharmaceuticals, Nextel Communications, Clear Channel Communications.Business Editors CINCINNATI--(BUSINESS WIRE)--Sept. 8, 2003 Today's Schaeffer's Midday Options Update features IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) (NYSE NYSE See: New York Stock Exchange :IBM), Watson Pharmaceuticals Watson Pharmaceuticals, Incorporated (NYSE: WPI) is the 5th largest pharmaceutical company in the United States based on number of prescriptions dispensed. Based in Corona, California, Watson's Generics division markets over 150 pharmaceutical product families, including one of the (NYSE:WPI WPI - Worcester Polytechnic Institute ), Nextel Communications (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :NXTL), and Clear Channel Communications Not to be confused with clear channel radio stations, which are AM radio stations with certain technical parameters. Clear Channel Communications (NYSE: CCU) is a media conglomerate company based in the United States. (NYSE:CCU CCU abbr. 1. coronary care unit 2. critical care unit CCU critical care unit. CCU Critical care unit, see there ). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most active calls and puts for the day. The Midday Options Update is published every day at 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. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). (a $49.95 value). http://www.schaeffersresearch.com/addinfo. Schaeffer's Midday Options Update The market has rebounded nicely today following Friday's rather bleak session. Technology stocks are soaring higher after several upgrades and positive comments from brokerage firms. The chip equipment sector was upgraded from "market weight" to "overweight" due to a rise in industry fundamentals and improving economic conditions. Another firm lifted its 2003 projections for worldwide personal computer shipment growth from 6.3 percent to 8.4 percent. Digging a little deeper into the tech sector, IBM (NYSE: IBM) was upgraded from "neutral" to "outperform" and the brokerage house raised its 2004 earnings guidance for the company. Altera and Xilinx also enjoyed upgrades from "neutral" to "buy." In other news, Watson Pharmaceuticals (NYSE:WPI) announced that it received final approval for its generic form of the pain reliever Percocet (which is manufactured by Endo Pharmaceuticals). The stock is up almost five percent in trading this afternoon. Nextel Communications (NASDAQ:NXTL) is also skipping higher after reporting that it is on track to meet its full-year financial target due to strong revenue and subscriber growth. At 12:52 p.m. eastern time, the Dow Jones Industrial Average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. (DJIA DJIA See Dow Jones Industrial Averager (DJIA). - 9569.4) is up 0.70 percent and the S&P 500 Index (SPX (Sequenced Packet EXchange) The transport layer protocol in the NetWare operating system. Similar to the TCP layer in TCP/IP, it ensures that the entire message arrives intact. SPX uses NetWare's IPX as its delivery mechanism. - 1028.91) is higher by 0.74 percent. The Nasdaq Composite (COMP - 1879.5) is higher by 1.15 percent. At 12:54 p.m. in the options pits, 1,280,997 calls and 654,428 puts traded for a composite put/call ratio across all five exchanges of 0.51. The CBOE CBOE See: Chicago Board Options Exchange CBOE See Chicago Board Options Exchange (CBOE). put/call ratio for equity options weighed in at 0.57. Clear Channel Communications (NYSE:CCU) is a diversified media company with business segments in broadcasting, outdoor advertising, and live entertainment. The stock is seeing some heavy trading this afternoon at its September 45 put. More than 2,600 contracts have crossed the tape on open interest of only 516 contracts. However, optimism continues to dominate on this issue. Its Schaeffer's put/call open interest ratio has dropped from 1.04 on August 21 to its current reading of 0.64. This ratio is lower than 65 percent of those taken over the past year. In addition, the number of CCU shares sold short plunged 18 percent over the past month to 18.8 million. I advise caution, though, as this is still more than five times its average daily trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. and could fuel a covering rally. Wall Street continues to favor the company, with 15 of the 20 analysts following CCU rating it a "buy" or better. Any downgrades from this optimistic bunch could spell trouble for the security. After surging through former resistance in the 44 region, the stock is now pulling back to potential support at its rising 10-day moving average. Potential overhead resistance resides at the 45 level. This area has troubled the shares since June 2002 and may succeed in capping the shares again. Click the following link to see the Daily Chart of CCU since December 2002 with 10-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=8407. The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo. 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. |
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