Schaeffer's Street Chatter Highlights the Following Stocks: Rambus, Schlumberger, KeyCorp.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Rambus (NASDAQ:RMBS), Schlumberger (NYSE:SLB), and KeyCorp (NYSE:KEY). "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:

Rambus

After the close last night, Rambus (NASDAQ:RMBS) posted a fourth-quarter profit of $9.38 million, or nine cents per share, besting its year-ago gain of $6.54 million, or six cents per share. Sales for the three-month period jumped 7.7 percent to $41.59 million. The firm reported that its quarterly per-share earnings and net income reflect a pretax gain of $5.4 million resulting from the repurchase of notes during the period.

The shares have tacked on roughly one percent this morning on the positive news, and continue to consolidate into support at their rising 10-day moving average. In fact, the security has been in a strong uptrend since mid-October and enjoyed a number of gaps higher this month on a string of positive announcements ranging from a deal with Advanced Micro Devices (AMD) to positive court rulings. The equity is now approaching levels not seen since January 2004.

Despite the security's recent gains, investors maintain a pessimistic stance toward the firm. The equity's Schaeffer's put/call open interest ratio (SOIR) has climbed since mid-November, as puts are added at a faster pace than puts in the front three months of options. The current reading of 0.48 is higher than 63 percent of all those taken during the past 52 weeks.

What's more, short sellers continue to add to their bearish bets. In December, short interest for RMBS crept two percent higher to 10.6 million shares. This buildup of pessimistic positions accounts for roughly 12 percent of the stock's total float and is nearly five times its average daily trading volume. An unwinding of these positions could fuel a significant rally in the shares.

RMBS is currently flying below the Street's radar. According to Zacks, only two analysts offer up ratings on the security, awarding one "strong buy" and one "hold." As the stock continues to rise, it could begin to catch the eye of more brokerage firms. Any new coverage could help boost the security higher.

Overall, the stock's impressive technical strength and pessimistic backdrop earn it a Schaeffer's Equity Scorecard of 7.0 out of 10. This relatively high reading indicates that RMBS may still have additional upside ahead of it as the last of the bears scramble to jump on the stock's bandwagon.

Click the following link to see a daily chart of RMBS since September 2005 with 10-day and 20-day moving averages: http://www.schaeffersresearch.com/wire?ID=15048 .

Schlumberger

Schlumberger (NYSE:SLB) slipped into the earnings confessional this morning, posting a fourth-quarter profit of $661 million, or $1.08 per share, compared to its year-ago gain of $330 million, or 55 cents per share, and the Street estimate of 96 cents per share. Operating revenue for the firm spiked 31 percent to $4.02 billion. The company expects similar top-line growth in 2006 as in 2005. As if to whet the appetite of investors, the company announced last night that its board has approved a two-for-one stock split for shareholders of record as of March 1. The payment date is set for April 7. Furthermore, SLB boosted its quarterly dividend by 19 percent to 25 cents from 21 cents per share, on a pre-split basis. The dividend is payable April 7 to shareholders of record as of March 1. The dividend will be paid only on shares outstanding prior to the stock split. On the post-split number of shares outstanding, the dividend is equivalent to 12.5 cents a share.

The equity has been a strong performer since April 2003, climbing higher along the support of its 10-week and 20-week moving averages. In fact, today's positive earnings news has pushed the shares to a new 52-week high. The stock has also benefited from the support of its 10-month moving average since April 2003. During this time period, the equity has not closed a month below this long-term trendline and has gained more than 237 percent.

Sentiment remains deeply entrenched in the bears' camp, as investors attempt to call a top to the security's gains. The equity's SOIR rests at 1.00, as open put positions equal open call positions in the front three months of options. The current reading is also higher than 88 percent of all those taken during the past 52 weeks.

Short sellers are being squeezed from their bearish positions, as the number of shorted SLB shares rolled over from a multi-year high to 15.4 million. As investors continue to buy back their pessimistic positions, the stock could enjoy a boost higher.

Meanwhile, Wall Street has begin to come around to SLB, though there is still room for some upgrades. According to Zacks, 11 brokerage firms currently rate the shares a "buy" and seven award it a "hold."

This combination of stellar technicals and pessimistic sentiment has garnered the security a Schaeffer's Equity Scorecard ranking of 9.0 out of 10. Such a lofty reading indicates that the shares still have room to run higher as the bears scramble to unload their losing positions.

Click the following link to see a monthly chart of SLB since October 2002 with 10-Month moving average: http://www.schaeffersresearch.com/wire?ID=15048 .

KeyCorp

Banking institution KeyCorp (NYSE:KEY) also made its quarterly earnings announcement this morning. The bank announced fourth-quarter net income of $296 million, or 72 cents per share, an improvement over last year's per-share profit of 51 cents. Revenue rose 11.2 percent to $1.31 billion. Analysts had been targeting per-share results of 67 cents per share on revenue of $1.25 billion, according to Thomson First Call.

On the heels of this news, KEY has been boosted over its 10-day and 20-day moving averages and through the 34 level, which has served as short-term technical resistance since mid-November. The stock was trading up as much as 4.83 percent earlier today but is currently higher by 3.35 percent.

While today's action is positive for KEY's short-term outlook, the long-term picture is a bit more discouraging. KEY has failed to make a solid long-term break above the 34-35 region since early 1998. Other than a brief dalliance above this level in May 1999, the stock has been contained beneath this region for more than seven years. On the plus side, the more often a resistance zone is tested, the weaker it becomes, and KEY has been butting up against this area for more than a year.

Some investors have become fed up with waiting for KEY to break out, which could bode well for the stock from a contrarian perspective. The equity's SOIR of 1.07 is currently higher than 93 percent of the past year's readings, but watch for this indicator to shift come Monday morning when January options are no longer part of the equation.

What's more, KEY short interest exploded of late, rising 45 percent in December to result in a short-interest ratio of nearly eight days to cover. Should the equity's earnings-catalyzed rally ensue, some anxious bears could pull their shorted positions off the table, supplying additional buying fuel to the shares.

Finally, a solid break through the 34-35 zone could generate some attention on Wall Street. At present, only three of the 20 analysts following KEY deem it worthy of a "buy," leaving 14 "hold" ratings and three outright "sells." Any upgrade activity would likely have positive short-term repercussions on KEY.

Click the following link to see a daily chart of KEY since October 2005 with 10-day and 20-day moving averages and a monthly chart of KEY since August 1998: http://www.schaeffersresearch.com/wire?ID=15048 .

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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 .