Schaeffer's Street Chatter Highlights the Following Stocks: Apple Computer and Walt Disney.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Apple Computer (NASDAQ:AAPL) and Walt Disney (NYSE:DIS). "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.

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 .

Street Chatter:

Apple Computer

It's another exciting session of trading for this Monday. Today's Street Chatter columns will dissect a pair of firms that appeared in the earnings confessional bright and early this morning. However, Apple Computer (NASDAQ:AAPL) will start things off for us today, as the company has become the center of attention on the message boards after Barron's suggested that the firm could buy Walt Disney (NYSE:DIS) after AAPL CEO Steve Jobs becomes the leading DIS shareholder.

The news hasn't done much to further AAPL in trading today, as the shares are up a modest 0.50 percent. DIS meanwhile, has added more than one percent on the news. Turning back to AAPL, the security appears to have found a sticking point in the 72 area, having been capped by this level since breaking below it on February 2. However, the stock continues to find support at its rising 20-week moving average, which it last closed a week below in early July 2005.

On a monthly basis, AAPL still has quite a bit of gumption left. The shares are still clinging to key support at the round-number 70 level, and are waiting for the support of their 10-month and 20-month moving averages to finally catch up. A bit of consolidation should come as no surprise for AAPL investors, as the equity recently tagged a new all-time high in January. A period of digestion could still be in the works for the security, barring any advancement of the DIS buyout speculation.

On the sentiment front, AAPL is fairly mixed. Short-term options players are apparently betting on a continued decline in the shares, as the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.11 indicates that puts easily outnumber calls in the front three months of options. Furthermore, this ratio ranks above all of those taken during the past year, hinting that the short-term speculator has never been more bearish at any point during the past year.

Wall Street is also in the bearish boat, as Zacks reports that eight of the 17 covering analysts rate the shares a "hold." The lack of "sell" ratings makes me a bit cautious, as it increases the chances of downgrades from the brokerage bunch. However, at this point I feel more comfortable with predicting upgrades than downgrades for the security at the moment.

One concern for AAPL is the lack of short interest being levied against the stock. During January, (February short-interest data is set to be released any day now), the number of AAPL shares sold short increased moderately to 25.7 million shares. However, while more than three percent of the stock's total float is sold short, it would still take less than one day to buy back these bad apples. This lack of short interest leaves AAPL in the lurch when it comes to any form of short-covering support; this is not a good contrarian indicator for a long position.

All in all, however, the lingering pessimism and technical prowess has earned AAPL a Schaeffer's Equity Scorecard rating of 6.0 out of 10. This rating is not an overly bullish one from our contrarian point of view, but it does offer up hope for the shares going forward, should pessimism continue to build on the shares.

Click the following link to see a daily chart of Monthly Chart of AAPL Since April 2003 with 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=15409 .

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 .