Schaeffer's Street Chatter Highlights the Following Stocks: Home Depot, Millennium Pharmaceuticals, and Stelmar Shipping.

Business Editors

CINCINNATI--(BUSINESS WIRE)--May 18, 2004

Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Home Depot (NYSE:HD), Millennium Pharmaceuticals (Nasdaq:MLNM), and Stelmar Shipping (NYSE:SJH). "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. Early this morning, Home Depot (NYSE:HD) reported record-setting first-quarter earnings of 49 cents per share, which eased past Wall Street's consensus view of 43 cents and topped year-ago results by a dime per share. Same-store sales surged 7.7 percent during the reporting period, while revenue increased 16.2 percent to $17.55 billion. HD officials boosted the firm's 2004 earnings-per-share guidance to an increase of 10-14 percent.

On the heels of this positive earnings surprise, HD began to charge higher. The stock hurdled its 10-day moving average for the first time since last month, but was quickly stopped short at its 20-day trendline. HD also remains beneath its 10-week and 20-week moving averages, as well as its 10-month trendline. In other technical news, HD has been underperforming the S&P 500 Index (SPX), in terms of relative strength, since November.

The HD May 35 call and put are both notably active today. Almost 11,000 contracts changed hands on the call, while about 6,000 contracts have traded on the put. Prior to today's activity, Schaeffer's put/call open interest ratio (SOIR) for HD stood at 0.66, which is just eight percent shy of an annual peak, indicating a fair amount of pessimism from the options crowd. This pessimism is unsurprising, given the equity's weak price action of late. (Remember, a contrarian indicator only works when the sentiment runs counter to the underlying equity's trend).

What's more, Schaeffer's Sentiment PowerTools (http://www.schaeffersresearch.com/powertoolsobs) indicates that HD has boasted SOIR readings between 0.61 and 0.71 an more than 700 occasions since November 1989. The historical effect for such an SOIR signal has been moderate underperformance over the ensuing 20-trading-day period.

On another sentiment front, 14 of the 24 analysts following HD (58 percent) continue to name the stock a "buy" or better. There are 10 "hold" ratings on the equity and zero outright "sells." The potential for downgrades, therefore, is fairly good.

Click the following link to see the Daily Chart of HD Since March 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=10175 .

2. Today's technical picture for Millennium Pharmaceuticals (Nasdaq:MLNM) is strikingly similar to that of Home Depot, as the stock rallied strongly above its 10-day moving average only to be summarily rebuffed by its 20-day trendline. At one point this morning, MLNM was trading 13.6 percent higher, but is now up by just 6.6 percent. Spurring the heavy-volume rally in MLNM shares was news that the firm's Velcade chemotherapy treatment for blood and bone-marrow cancers significantly prolongs life, according to the latest studies. The survival benefit is considerably higher in trials than patients treated with dexamethasone.

A glance over the equity's sentiment landscape reveals some signs of creeping pessimism. The SOIR for MLNM has been on the rise since mid-April and currently weighs in at 0.46, which stands among the top two-thirds of the past 12 months' worth of SOIR readings. This suggests that options players are increasingly more interested in bearish put positions. In today's action, speculators are circling the May 15 call and put. The stock topped the 15 mark earlier today, but is now perched below it (the aforementioned 20-day moving average is located at 15.50). Nearly 2,000 contracts have traded on the front-month put, while almost 2,300 have changed hands on the call position. As these expire on Friday, today's action could be the result of liquidations.

Wall Street is planted in the wishy-washy camp, as 12 of the 13 analysts following MLNM have named it a "hold." The lone holdout lists MLNM as a "buy."

Click the following link to see the Daily Chart of MLNM Since April 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=10175 .

3. Stelmar Shipping (NYSE:SJH) shares gained more than 10 percent yesterday amid reports that the company was likely to merge with OMI Corp. Today, SJH, a company which transports oil and petroleum in its fleet of 41 tankers, said it hasn't received such an offer, despite claims from OMI. The rumored deal, which would give SJH shareholders control of 40.5 percent of the combined company, is not out of the question and would be discussed if an official offer was made, said SJH officials.

The shares have charged almost 20 percent higher over the past two days following a successful test of their 10-month moving average, coupled with this intriguing news from the fundamental front. SJH is now back above its 10-week and 20-week moving averages (delaying a bear cross in these intermediate-term trendlines) and is challenging its all-time high of 29.48, which was originally achieved in mid-April.

SJH is not an optionable stock and short sellers have not been drawn to the stock. There are currently just 0.07 million STJ shares sold short, for a paltry short-interest ratio of less than twice the stock's average daily volume.

Click the following link to see the Weekly Chart of SJH Since May 2003 With 20-Week and 50-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=10175 .

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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 .