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by 1/18/2001 9:05 AM
Stocks quoted in this article:
Discount-broker Charles Schwab (SCH - 28-1/4) reported earnings that missed estimates by a penny this morning, $0.11/share vs expectations of $0.12.

This earnings report could make it very difficult for the shares to close above 30 by Friday expiration. The 30 strike is the site of peak call open interest in the January series, home to over 7,000 calls. Peak put open interest is at the 25 strike, site of 6,000 contracts in the January series. <

by 1/18/2001 8:54 AM
Stocks quoted in this article:
Caterpillar (CAT - 44-5/8) will be one of several stocks to watch today, as the company reported earnings this morning that beat analysts' estimates. CAT said fourth-quarter earnings were $0.76/share versus estimates of $0.65 share. This is the company's fifth straight earnings suprise, and fourth-quarter earnings were 13.4% ahead of the fourth quarter of last year.

However, CAT warned 2001 will be challenging for the industry and expects that net will be 5-10% below 2000.

This earnings announcement comes at an interesting time from a technical perspective, as CAT has just retraced 50% of its May 1999 peak at 67-7/16 and its October 2000 low of 29-9/16. This 50% retracement level is around the 47 area, and the shares peaked in early January at 49. In December, the shares experienced their first monthly close above its 20-unit monthly moving average since October 1999. While this is encouragin, the equity is threatening to move back below this declining trendline, currently sitting at 44.

While the shares have a put/call open interest ratio that exceeds 1.0, be careful in your interpretation of this. While sentiment is negative, the fundamental outlook may justify such negativity and thus is not as bullish in its implications. <

by 1/17/2001 4:37 PM
Stocks quoted in this article:
While the Nasdaq Composite's (COMP – 2682.7) opening was very strong after a slew of earnings reports, one cannot be too impressed with the follow-through (or lack thereof) as the late morning and afternoon progressed. The COMP experienced a slow, but orderly, 2.7-percent decline from its intraday peak into the close.

Intel (INTC – 30-1/2) began the day strong after reporting earnings that beat analysts' estimates by a penny per share. It opened higher by 1-5/8 points (+5.1 percent) but closed down 7/8 point, or -2.8 percent. Some options speculators may have seen the reversal coming, or perhaps they jumped in as the reversal developed. The most heavily traded January option was the 32-1/2 put, with volume of over 20,000 contracts, compared to open interest of 45,418. <

by 1/17/2001 3:54 PM
Stocks quoted in this article:
Mired by the downgrades of four different analysts, Macromedia (MACR – 30-9/16) has fallen more than 30 percent in trading today on volume of 12 million shares. Investors remain concerned over MACR's decision to buy Allaire (ALLR – 8-3/4) for $360 million in cash and stock.

The short interest ratio for MACR continues to climb, currently resting at 2.22. While this may be a two-year high for the security, this ratio is still low enough to make it highly unlikely that a near-term rally is possible.

On the options front, MACR's January 35 call is today's volume leader with 774 contracts trading on open interest of only five contracts.

by 1/17/2001 3:15 PM
Stocks quoted in this article:
Is it the January effect? Some beaten-down technology stocks have experienced huge percentage increases in the past week. One example is Superconductor Tech (SCON – 7-13/32), a company that provides filters for wireless telecom products. You may remember this as the company that rose from 10 to 115 within a few weeks last spring. Then it took a nosedive of staggering proportions, falling below three last month. Most likely, this issue did experience some end-of-year tax selling at that time. But now the price has again taken on new life, as it has more than doubled since January 8. Some say it is just a short squeeze. The shares could fall right back again, but it is interesting enough to consider watching.

Options have been moderately active on this issue. May options show over three thousand open puts at the 5 strike. Today, 222 contracts of the February 10 call have changed hands at prices of one or less.

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