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Schaeffer's Option Activity Watch Features Bank of America, Johnson & Johnson, QUALCOMM.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 2, 2003

Today's Schaeffer's Option Activity Watch features Bank of America (NYSE:BAC), Johnson & Johnson (NYSE:JNJ), and QUALCOMM (NASDAQ:QCOM). The Option Activity Watch is a report that takes a closer look at three equities appearing in our most unusual option activity report from the previous day. The Option Activity Watch 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. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo.

Schaeffer's Option Activity Watch:

1. Bank of America (NYSE:BAC) popped back above its 10-day moving average this morning. The stock has successfully pulled back to test support at its rising 20-week trendline and is moving higher. In fact, the security has outperformed the S&P 500 Index (SPX) since November 2000. Options players piled into BAC calls on Friday, pushing open interest for its September 75 strike from 2,921 to 7,275 contracts. This gives the issue a Schaeffer's put/call open interest ratio (SOIR) of 0.69. This reading is lower than 65 percent of those taken over the past 12 months. What's more, short interest continues to shrink and is now less than four times its average daily trading volume. Wall Street is even enamored of this company, as 17 of the 21 analysts following BAC rate it a "buy" or better. Any downgrades from this optimistic bunch could spell trouble.

Click the following link to see the Weekly Chart of BAC since February 2003 with 20-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=8367 .

2. Johnson & Johnson (NYSE:JNJ) is also seeing some heavy call activity, as open interest at its September 50 strike added more than 10,000 contracts over the weekend. Optimism reign supreme on the consumer goods company. Its SOIR of 0.63 is lower than 84 percent of those taken over the past year and its short-interest ratio is a paltry 2.42 days to cover. Only Wall Street is demonstrating some hesitance, as 10 of the 19 covering analysts rate it a "hold." Technically speaking, the shares are consolidating into resistance at their declining 10-week moving average. JNJ has not enjoyed a weekly close above this trendline since the beginning of May. In fact, the security's relative-strength measure versus the SPX has declined since March. This stock may have further losses in its future as this extreme optimism unwinds.

Click the following link to see the Weekly Chart of JNJ since March 2003 with 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=8367 .

3. Checking in with some heavy put trading is QUALCOMM (NASDAQ:QCOM). This tech giant had more than 3,300 change hands on Friday to bring open interest up to more than 8,000 contracts. However, bullish bets have been on the rise for this security, as its SOIR has been declining since early August. The ratio of 0.66 is now lower than 71 percent of those taken over the past 52 weeks. Furthermore, short interest plunged 13 percent over the most recent reporting period to 22 million shares. This is only 2.17 times its average daily trading volume, reducing the likelihood of a covering rally. From a technical perspective, QCOM has broken through former resistance at the 40 level and is enjoying the support of its rising 10-week moving average. What's more, the stock is trading above heavy front-month call open interest at the 37.50 and 40 strikes. The remaining overhead call open interest is light, offering little in the way of options-related resistance.

Click the following link to see the Weekly Chart of QCOM since January 2002 with 10-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=8367.

The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo.

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 .
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Date:Sep 2, 2003
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