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by 3/28/2001 1:10 PM
Stocks quoted in this article:
Gillette (G 31.58) announced plans today to spend $100 million on advertising and marketing this year, a 40-percent jump from last year, to bolster the company's sagging Duracell battery unit. G suffered a sharp drop in sales when competitors Energizer (ENR 23.48) and Rayovac (ROV 17.36) cut prices and issued rebates. G still controls 40 percent of the battery market despite a five-percent drop in overall sales last year.

Options players are very pessimistic on the shares as G's Schaeffer's put/call open interest ratio rests at 1.19, which is in the 98.8 percentile. This means that less than two percent of the readings taken over the last 52-weeks were more bearish. The stock continues to battle its 10-week moving average. G has not had a weekly close above this trendline since late December.

Be careful about reading too much into this high p/c ratio as far as this being a contrarian buy signal. The industry fundamentals (lower battery prices) and the stock being in bear mode (as is evident by the failure to overtake its downtrending 20-month moving average) in January warrants a high p/c ratio and thus is not bullish in its implications as compared to a stock with a high p/c ratio amid bullish fundamentals and technicals. <
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by 3/28/2001 12:45 PM
Stocks quoted in this article:
M.D.C Holdings (MDC 39.82) expects first-quarter earnings to beat Street estimates. The Denver homebuilder anticipates earnings of $1.01 per share, versus analysts' expectations of 97 cents per share. MDC stated the surge in profits was due to "record" first-quarter home closings, continued higher home sell prices, and increased options sold by design centers. The stock has gained more than 11 percent in trading so far today, but is battling staunch resistance at the 40 level. In the history of the shares, MDC has managed only one close above this level.
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by 3/28/2001 12:35 PM
Stocks quoted in this article:
Arch Coal (ACI 30.43) announced that it expects first-quarter earnings of 10 to 15 cents per share, trouncing Street estimates of four cents per share. The coal producer cites small volume coal sold in spot market and income tax benefits related to depletion. The stock set a new annual high today, breaking above the 30 level for the first time since December 1997.
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by 3/28/2001 12:21 PM
Stocks quoted in this article:
After a long and tortuous road to the Street, Agere Systems (AGR'A - 6.05) finally got their Initial Public Offering (IPO) out the door. The optoelectronics unit of Lucent Technologies (LU - 10.19) originally filed with the SEC to sell 370.3 million shares to be priced between 15-20 dollars per share. In order to get the deal to market, underwriters had to settle on a 6-dollar-per-share offer and increased the number of shares offered to 600 million. If you follow the IPO markets, you know that a deal is not likely to be successful if the terms have to be adjusted lower.

Furthermore, one has to question why the offer was not pulled in the face of this difficult market environment. After all, there are a lot of low-priced stocks out there with track records that are still selling off!

As of noon, the infant traded as high as $6.14 (a 2.33 percent first-day pop). Two subsequent tests of the 6.00-price level bore witness to buyers entering the field. This seems like interested parties entering the field to support the stock from trading below the offer price; a sort of face saving, if you would. Over 90 million shares have already changed hands.
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by 3/28/2001 12:03 PM
Stocks quoted in this article:
Walt Disney (DIS 27.5) is trading nearly six percent lower this morning, contributing 11 negative points to the Dow Jones Industrial Average (.INDU 9721.2). Citing weakness in the economy, the Mouse said it is trimming its workforce by three percent, to the tune of 4,000 jobs. The downsizing will reportedly save the company between $350 million and $400 million per year.

Technically speaking, DIS has been struggling for quite some time. The shares have been trading beneath their 20-month moving average since November and have been continually struggling with resistance overhead in the form of their 10-week and 20-week moving averages.

Pessimism has been slowly building on the equity, as evidenced by Schaeffer's put/call open interest ratio (SOIR) for the shares. Over the past couple of weeks, this has increased to 0.54 from a reading of 0.47 as recently as March 19. DIS's SOIR now stands among the top 30 percent of all SOIR readings collected over the past 12 months. <
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