Schaeffer's Street Chatter Highlights the Following Stocks: Wireless Holders Trust, Nokia, and RF Micro Devices.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Wireless Holders Trust (AMEX:WMH), Nokia (NYSE:NOK), and RF Micro Devices (NASDAQ:RFMD). "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:

Wireless Holders Trust

We have a theme for today's edition of Street Chatter: telecommunication stocks, specifically companies related to the wireless end of the spectrum. As such, I thought it would be worthwhile to take a quick look at the exchange-traded fund Wireless Holders Trust (AMEX:WMH), which just happens to hold among its members both of today's focus stocks.

Technically speaking, WMH has ground higher during the past couple of years. Until recently, the trust has ping-ponged between support at the 52 level and resistance at the 62 level. That all changed during the week of March 17, when WMH broke out of its doldrums with a solid upside move. Riding the support of its rising 10-month and 20-month moving averages, the trust is now trading at levels not seen since December 2001. There seems to be a bit of long-term resistance lingering overhead at the 65 level, but if the stock can manage a break out to the upside once again, we could see quite a surge in the sector as a whole.

Quick Facts on WMH

--Percent of analysts tracked by Zacks who rate the stock with a "buy": N/A

--Number of analysts tracked by Zacks: N/A

--Short interest as a percent of float: N/A

--Short-interest ratio: 23.78

--Schaeffer's put/call open interest ratio (SOIR): 0.89

--SOIR percent rank: 74%

--Overall Schaeffer's Equity Scorecard rating: 8.0

This upside breakout on the technical charts arrives amid some rather pessimistic sentiment on the investor front. Obviously, there is ample fuel for a short-covering rally for WMH, as it would take more than 23 days to buy back this pile of pessimistic positions. Furthermore, options players are heavily bearish on the trust. With this type of background and potential for gain in the sector as a whole, we move on to our focus stocks of the day.

Click the following link to see a Monthly chart of Wireless Holders Trust since November 2001 with 10-month and 20-month moving averages: http://www.schaeffersresearch.com/wire?ID=15678 .

Nokia

The world's largest manufacturer of mobile phones, Nokia (NYSE:NOK), kicked off the latest round of speculation in the telecommunications sector today when it upped its 2006 global mobile device volume forecast due to strong subscriber growth. The company also lifted its forecast for worldwide handset sales, stating that it now sees growth of 15 percent or more for 2006, up from a previous view of 10-percent growth.

On the news, NOK hit a fresh 52-week high, and while the shares have since pulled back from that precipice, they are still up more than three percent on the day. Looking at a weekly chart, the security has been locked in an uptrending channel for the better part of the past two-and-a-half years. What's more, NOK still enjoys the support of its 10-week and 20-week moving averages as it attempts to overcome long-term resistance at the 21 level. This is a major hurdle for NOK, as the shares have not breached this region on a weekly basis since April 2002.

Quick Facts on NOK

--Percent of analysts tracked by Zacks who rate the stock with a "buy": 61%

--Number of analysts tracked by Zacks: 23

--Short interest as a percent of float: 0.45 %

--Short-interest ratio: 1.72

--Schaeffer's put/call open interest ratio (SOIR): 0.97

--SOIR percent rank: 75%

--Overall Schaeffer's Equity Scorecard rating: 7.0

It may seem as if there are quite a few detractors from a long position on NOK, but I would argue that much of this optimism is warranted on the stock at this point. That said, the indicators that seem most beneficial for the equity lie in the options pits and on Wall Street. The brokerage bunch? Yes, those analysts have only doled out 14 "buys" compared to eight "holds," and one "sell." While I have marked the percentage of "buys" above with a red flag, I still feel that there is more room for upgrades given the lingering pessimism on the rest of the Street. For example, the bears are on the run in the options pits, as NOK's SOIR has steadily declined during the past several weeks. This unraveling of pessimistic sentiment is what gives me a bit of hope for a continued rally in the shares.

Ok, so it's option pick time, and you may be groaning that a NOK call just doesn't suit you right at the moment; especially following today's run higher. That's fine, but I'm going ahead with it anyway. You see, peak call open interest for the front three months of options lies at the now in-the-money 20 level. With little in the way of overhead options-related resistance, I feel rather comfortable taking an intermediate-term call position at the 22.50 strike. For those of a more conservative nature, you might check out a long-term call at the 20 level just for security purposes.

Click the following link to see a Weekly chart of Nokia since April 2002 with 10-week and 20-week moving averages: http://www.schaeffersresearch.com/wire?ID=15678 .

RF Micro Devices

If it's good for the goose, it must be good for the gander, right? Well, that seems to be the case for RF Micro Devices (NASDAQ:RFMD). The firm is one of the leading component manufacturers for NOK, and today's news of increased demand has boded well for the shares. In an unrelated announcement, RFMD announced an $80 million wafer fabrication expansion to increase manufacturing capacity, resulting in the addition of 300 new positions. Seems to me that business is good.

RFMD also tagged a new 52-week high today, taking out former resistance at the 8.50 level. The shares have rallied sharply higher since May 2005, adding more than 129 percent along the support of their 10-week and 20-week moving averages. There could be some resistance coming to bear on the shares at the nine level, as RFMD has pulled back to support at the 8.50 level today, but with its weekly and daily trendlines screaming higher to catch up, it could be only a matter of time before the equity makes a serious run at this region.

Quick Facts on RFMD

--Percent of analysts tracked by Zacks who rate the stock with a "buy": 51%

--Number of analysts tracked by Zacks: 16

--Short interest as a percent of float: 8.24%

--Short-interest ratio: 2.88

--Schaeffer's put/call open interest ratio (SOIR): 0.22

--SOIR percent rank: 5%

--Overall Schaeffer's Equity Scorecard rating: 5.0

Not all stocks are created equal in the eyes of the investor-sentiment figures. Such is the case with RFMD. It seems that many have caught on to the recent success of the equity, and have responded accordingly. There is still some complacency on Wall Street, with room for upgrades from the eight "hold" or worse ratings out there. And short interest is considerable, accounting for more than nine percent of the stock's total float. However, with so much optimism from the options crowd, resulting in a rush of call activity at the 10 strike in the front three months of options, I suspect that RFMD will need to gather some strength here before moving higher.

Click the following link to see a Monthly chart of RF Micro Devices since January 2004 with 10-month and 20-month moving averages: http://www.schaeffersresearch.com/wire?ID=15678 .

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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 .