Schaeffer's Trading Floor Blog

Broker Breakdown

by 5/2/2005 11:41 AM
Stocks quoted in this article:

At the open, I noted the sluggish action in brokerage stocks and mentioned some downgrades. I just checked in on those stocks - Merrill Lynch (MER), Goldman Sachs Group (GS), and Lehman Brothers Holdings (LEH) - and found they are still searching for an intraday bottom. I dug into the sentiment data (listed below) and found very little in the way of overall skepticism. With complacency the dominant emotion, it may be worthwhile to keep a cautious eye on how this develops...

Quick Facts on MER

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 77%
  • Number of analysts tracked by Zacks: 17
  • Short interest as a percent of float: 1.0%
  • Short interest ratio: 2.222
  • Put/call ratio percent rank: 35.3%

Quick Facts on GS

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 83%
  • Number of analysts tracked by Zacks: 18
  • Short interest as a percent of float: 3.9%
  • Short interest ratio: 3.548
  • Put/call ratio percent rank: 98.4%

Quick Facts on LEH

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 60%
  • Number of analysts tracked by Zacks: 15
  • Short interest as a percent of float: 2.9%
  • Short interest ratio: 2.556
  • Put/call ratio percent rank: 9.9%


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Stocks quoted in this article:

Continuing the discussion on utilities, I thought you might be interested in this data from the sector scan scorecard drilldown on the utility sector...

  • DTE 9
  • D 9
  • PEG 8
  • PCG 7
  • FPL 7
  • ETR 7
  • ED 7
  • DUK 7
  • CNP 7
  • AEP 7
  • TXU 6
  • SO 6
  • FE 6
  • EXC 6
  • EIX 6
  • AES 6
  • AEE 5.5
  • XEL 4
  • NU 4
  • PGN 3

I took the stocks on the list and sorted them based on their overall scorecard readings. I like to do this to get a quick sense for the overall profile. As you can see, there is a bias toward higher readings as just a few stocks are neutral or lower. I would take this as an encouraging sign.

I am now going to start checking out some of the individual names....


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Stocks quoted in this article:

As usual, this table lists stocks that have at least 10 percent of their float sold short and then shows the top ten based on the previous day's gain. The last field shows how the stock is performing in today's session. This can be a useful tool for finding situations where stocks with heavy short interest have begun to move. All returns are shown in percentages.

Note - more information on short interest can be found by clicking here.

Company Yesterday's
Gain
Percent of Float
Sold Short
Yesterday's
Close
Today's
Return
NETGEAR, Inc. (NTGR) 24.5 18.5 16.13 3.97
Martek Biosciences Corporation (MATK) 17.8 23.7 38.27 -1.62
First Horizon Pharmaceutical Corporation (FHRX) 10.6 22.7 18.11 0.72
Bone Care International, Inc. (BCII) 9.1 12.6 25.81 0.70
Alliance Gaming Corporation (AGI) 8.8 12.4 11.40 3.95
SafeNet Inc (SFNT) 8.5 13.5 27.95 5.90
USG Corporation (USG) 7.9 51.8 41.99 1.48
Quality Systems, Inc. (QSII) 7.4 14.6 47.58 4.96
Pre-Paid Legal Services, Inc. (PPD) 5.8 50.4 35.71 1.34
Gander Mountain Company (GMTN) 5.4 44.8 10.40 0.38
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At the Open

by 5/2/2005 9:47 AM
Stocks quoted in this article:

The trading week has officially begun and here is what I see...

As indicated by the pre-open futures action, we see a positive bias at the open....housing is taking the lead but it is a very close race...semis and internet lagged Friday's action so it is worth watching to see if this morning's bounce holds...brokers are under pressure as turmoil at MWD continues and UBS downgrades a number of major players...gold stocks have yet bounce from their recent lows...

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Stocks quoted in this article:

Stuart says...in a manner of speaking... - "Take a look at the utilities group...Take a look at the utilities group...Take a look at the utilities group..."

My response - Actually, he sent me a string of emails pointing to the performance and profile of a number of utility stocks. At times, I can be "less-than-astute" so his persistence was needed. Later on today I will delve into a few stocks from the group, but I wanted to start by noting the weekly chart of the Utilities HOLDRS (UTH)...


Created with SuperCharts by Omega Research

I have added in the red channel and the 20-week moving average to help describe the recent trend. There aren't too many sectors that I can think of that show such a steady uptrend in this environment. Also note how the group has been consolidating near the upper edge of the channel.

In theory this should act as an area of resistance but the fact that the group has not been rejected may hint that buying pressure is building relative to what has been the case in this trend. In other words, the group may be poised for a breakout...

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