Schaeffer's Street Chatter Highlights the Following Stocks: NIKE, TiVo, Yahoo!, and Sony.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: NIKE (NYSE:NKE), TiVo (NASDAQ:TIVO), Yahoo! (NASDAQ:YHOO), and Sony (NYSE:SNE). "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:

NIKE

J.P. Morgan downgraded sneaker maker NIKE (NYSE:NKE) to "neutral" from "overweight" this morning, on concerns over shrinking market share. The broker estimated "high-single digit" near-term earnings growth, with "limited upside." J.P. Morgan quotes NKE's global market share at 35 percent, a level that it says is "approaching its limit."

It looks as if investors had beaten J.P. Morgan to this conclusion. From an all-time high last December at 92.43, well short of the round-number 100 level, the stock has languished. This month, it is resting on the support of its 10-month moving average, but the 10-month and 20-month trendlines seem on course for a bearish cross. For five years starting in 1997 the stock relied on support at the 40 level, and now it appears to be playing the same game with the 80 level, double the former support. If so, the bulls could be in for a very long wait before NKE goes for a run again.

I see multiple resistance levels: 88, 90 and 92 all look to be hurdles for the stock, and 86 has been resistive as often as supportive, so it is something of a fair-weather friend. The 10-week and 20-week trendlines recently made a bullish cross which is often a good sign, but in this case I'm looking for a stronger signal before I start to get excited.

We track a large number of sentiment indicators, but we frequently focus on three key areas:

-- Analyst ratings, to gauge Street sentiment

-- Equities sentiment, in the form of short selling 

-- Options sentiment, in the form of put/call ratios and trends, and peak open interest

From Zacks I see that analysts award:

-- 7 "strong buys"

-- 2 "buys"

-- 3 "holds"

-- 0 "sells"

-- 0 "strong sells"

There is certainly scope for damaging downgrades here.

In the options pits, sentiment seems to be appropriately pessimistic toward NKE. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 1.16, in the 96th percentile. In other words, this reading, which is higher than 96 percent of all those taken over the past year, is close to a pessimistic extreme. From our contrarian perspective, signs of lingering optimism would be more interesting, perhaps making a strong case for price drops if the optimists change their minds, so I see NKE trending sideways rather than falling.

Short interest on NKE amounts to just 2.2 percent of the stock's float, and all the shorted shares would take just 1.2 days to buy back, so the chances we'll see any short-covering support are minimal. Interestingly, short interest fell 29.9 percent last month, a sign perhaps that short sellers are moving on to look for better opportunities in the belief that support for NKE will hold.

Our Schaeffer's Equity Scorecard rating of 5.5 out of a possible 10 for NKE confirms my opinion that this stock is range bound. To equities investors it is not appealing, but there are options strategies that could bring profits; put selling, covered or naked call selling, and short straddles are all possible here.

Click the following link to see a Weekly Chart of NKE Since November 2004: http://www.schaeffersresearch.com/wire?ID=14644 .

TiVo

Turning to TiVo (NASDAQ:TIVO), we're hearing that the company will allow users to download TV shows from their TiVo box to an Apple iPod or a Sony Playstation.

The stock gapped up this morning, its second notable leap this month. Remember that on November 7 it gave a pop when Yahoo! (NASDAQ:YHOO) announced plans to add its services to TiVo. Additionally, though perhaps coincidentally, the stock thumbed its nose at the 80-day moving average today, and it would be nice to see it remain above this descending trendline.

The 80-week moving average is presenting overhead resistance, too. This stock has been in decline since July 2003 and I'd like to see a clear break above some of these long-term trendlines. If they continue to decline and continue to hold sway, TIVO's in trouble.

Turning to the main sentiment indicators, from Zacks I see that analysts award:

-- 2 "strong buys"

-- 1 "buy"

-- 6 "holds"

-- 0 "sells"

-- 6 "strong sells"

With 12 out of 15 ratings at "hold" or worse (including six rare "strong sell" condemnations), there is ample room for upgrades here, a good sign from our contrarian perspective.

In the options pits, sentiment is dangerously optimistic. People are expecting good things from TIVO - if it fails to deliver this time around, perhaps we can expect trouble. It all depends on one factor: how much will it take to worry the optimists? The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.38 indicating that calls outnumber puts by almost three-to-one. This reading is higher than 66 percent of all those taken over the past year, so it is neutral to slightly bearish.

Short interest on TIVO amounts to 22.8 percent of the stock's float, and to buy back all the shorted shares would take 9.4 days, so there is definitely a chance of short-covering support if something came along to trigger a buying spree.

Click the following link to see a Daily Chart of TIVO Since March 2005 With 80-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=14644 .

Sony

And finally... Sony (NYSE:SNE). If TiVo boxes are going to plug into Playstations, it might pay to see what SNE stock is doing today. It gapped up nicely this morning, establishing a foothold at the 36 level, although the daily chart still looks a little ugly. SNE has a long way to go, and I can see more resistance levels than you could shake a stick at. Nevertheless, the last few days have seen it smash through resistance from the 80-day and 160-day moving averages, which is good.

Let's take a look at the sentiment. From Zacks I see that analysts award:

-- 0 "strong buys"

-- 0 "buys"

-- 2 "holds"

-- 0 "sells"

-- 1 "strong sell"

This is remarkably thin coverage for such a high-profile company.

In the options pits, sentiment seems to be optimistic toward SNE. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.32, indicating that calls outnumber puts by more than three-to-one. This lies in the 4th percentile. In other words, this reading is lower than 96 percent of all those taken over the past year.

Short interest on SNE amounts to just 0.25 percent of the stock's float, and all the shorted shares would take just 3.0 days to buy back, so the chances we'll see any short-covering support are small.

Our Schaeffer's Equity Scorecard rating of 2.0 out of a possible 10 suggests that the path of least resistance is to the downside.

Street Chatter focuses on stocks that have seen action on discussion boards; but, have you noticed that we have our own discussion boards? Schaeffer's is giving you a chance to discuss what you have read here in further depth and see other readers' reactions. Check out the yellow box at the bottom of this page, or click this link to go to our discussion board home page. Who knows, you might even pick up a trading idea or two from other Schaeffer's regulars.

Click the following link to see a Daily Chart of SNE Since March 2005 With 80-Day and 160-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=14644 .

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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 .