Schaeffer's Trading Floor Blog

Not Much Happening Out There

by 5/27/2005 11:25 AM
Stocks quoted in this article:
Well I must say, so far today is going pretty much as expected. The major indexes are all near break-even levels and volume is running light. Once lunch is over expect volume to completely disappear and more blah price action. Internals are mixed with the NYSE Advance/Decline line checking in at 1.43, while on the Nasdaq it's down at 0.86. Interestingly, two beaten down groups are doing great today and those two would be gold and steel. I'm not saying their vicious downtrends are over, but one look at the charts and a bottom could very well be forming. <

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In the yesterday's Trading Floor Blog, Richard discussed Metris Companies (MXT: scorecard, quote, chart) . MXT rates a perfect 10.0 on our proprietary Equity Scorecard. However, for those market players that may be seeking out some short ideas or looking for put plays, the following equities receive "imperfect" scores of 0.0 on our Equity Scorecard: Commercial Capital Bancorp (CCBI: scorecard, quote, chart) , Illinois Tool Works (ITW: scorecard, quote, chart) , Lexmark International (LXK: scorecard, quote, chart) , and Radio One (ROIA: scorecard, quote, chart) .

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Biotech Craze

by 5/27/2005 10:42 AM
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Every day I prepare a report that finds stocks in several of the more volatile sectors with interesting option activity. What is interesting, you say? That could be a large move in implied volatility or simply a large increase in option volume. A few days after the biotech concern Able Laboratories (ABRX: scorecard, quote, chart) dropped 75 percent of its value, options speculators have rushed in in an attempt to make quick profits on either a rebound in the shares or a further deterioration in the stock's value. However, mostly the former. Call option open interest has increased fifteen-fold to more than 12,000 contracts. This compares with about 4,000 put contracts. Today, the shares are up seven percent, but still well below their close on the day of the initial 75 percent drop. I don't think I'd try and go with the crowd on this one.

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Pfizer (PFE: scorecard, quote, chart) has stumbled almost two percent lower in trading this morning on news that the Food & Drug Administration (FDA) is examining reports of blindness among some men who had used the company's impotence drug Viagra. This type of blindness is called NAION, or non-arteritic anterior ischemic optic neuropathy and can appear in men who are diabetic or have heart disease. These same conditions that can cause impotence and thus lead to Viagra use. The FDA is working with the pharmaceutical giant to determine if any new information should be added to the drug's label, which already has a handful of warnings. Viagra was approved by the FDA in 1998 to treat erectile dysfunction. Shares of the firm are facing former resistance at the 29 level and have dropped below support at their 10-day moving average in trading this morning.


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C'est Chic

by 5/27/2005 9:06 AM
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Earnings season is winding down, but a few more companies, especially those in the retailing sector, have yet to take their turn in the earnings confessional. Last night, Chico's FAS reported first-quarter earnings of $327.3 million, or 26 cents per share. This compares to year-ago results of $256.8 million, or 20 cents per share. Additionally, the firm's figures outpaced Wall Street estimates by a penny. Same store sales rose 10.8 percent during the period, and company officials expect double-digit comparable sales growth in the second quarter as well. The apparel retailer is fresh from a retest of technical support at its 10-day moving average. With an Schaeffer's Equity Scorecard rating of 8.0, and a hefty short-interest ratio of 12.49 days to cover, the equity's uptrend could continue …

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