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by 10/16/2000 12:30 PM
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Since peaking on October 5, Rational Software (RATL – 52-1/2) has dropped 25 percent. However, support at the stock's 20-week moving average continues to hold.

Early October also marked a peak in pessimism on RATL. Its Schaeffer's put/call open interest ratio (SOIR) dropped from an annual high of 1.14 on October 4 to today's reading of 0.77. For more information on SOIR, please visit Schaeffer's Daily Sentiment.

Contributing to this falling SOIR was a 4,900-contract increase to open interest on the January 35 call. This was one of the most-active calls on the CBOE on Friday. <

by 10/16/2000 11:22 AM
Stocks quoted in this article:
Brokerage titan Merrill Lynch (MER – 57-3/16) is castigating some of its peers today, announcing a series of earnings estimate reductions shortly before the open. The firm reduced its 2000 and 2001 earnings estimates for Goldman Sachs Group (GS – 100-1/4), Lehman Brothers Holdings (LEH – 118-7/8), and Morgan Stanley Dean Witter (MWD – 77-5/16). Additionally, MER cut its earnings estimate for Citigroup (C – 49-11/16) for 2001 only.

MER's 2000 earnings estimate for GS was reduced from $6.45 to $6.20, while its 2001 estimate fell from $6.65 to $6.30. For LEH, MER trimmed its 2000 estimates from $13.10 to $12.65, and 2001 earnings are now expected at $12.05 rather than $12.50. MWD saw its 2000 earnings expectations fall from $5.10 to $4.95, while 2001 earnings were reduced to $4.70 from $4.80. For C, MER nudged its expectations lower from $3.10 to $3.05 (all numbers indicated are on a per-share, full-year basis).

All four downgraded names are trading lower today, albeit slightly.

by 10/16/2000 11:21 AM
Stocks quoted in this article:
Photographic equipment manufacturer Polaroid (PRD – 8-15/16) has fallen over 22 percent today after issuing a negative earnings surprise. Before the open today, the company announced third-quarter results of 40 cents per share, a far cry from the Street's expectations of 54 cents per share. PRD's CEO added fuel to the equity's downward bias, saying that fourth-quarter earnings would likely be unchanged compared to last year.

PRD has subsequently recorded a low of 8-1/2 today, the lowest point the shares have achieved in over 15 years. In September, the shares breached the 17 level, a significant region of technical support. This area offered support to the equity in October 1987 and throughout 1999 and 2000. Needless to say, the security is sitting beneath all of its short-term and long-term moving averages. <

by 10/16/2000 11:20 AM
Stocks quoted in this article:
The AMEX Biotechnology Index (BTK – 691.9) has stepped up by nearly 17 points, or more than two percent, so far today. This upswing has lifted the index back above its 10-day moving average, a trendline it hasn't finished a session above since September 29. The BTK is also presently perched right on its 20-week moving average.

Top index performers this morning include Human Genome Sciences (HGSI – 89-1/8), up nine percent; Bio-Technology General (BTGC – 10-5/16), up 8.2 percent; and IDEC Pharmaceuticals (IDPH – 169-15/16), up 4.4 percent. HGSI announced that SmithKline Beecham (SBH – 64-9/16) exercised its first option to jointly develop and commercialize repifermin, a protein with several potential therapeutic applications.

by 10/16/2000 11:18 AM
Stocks quoted in this article:
Qualcomm (QCOM – 74-5/8) has gained over six percent in mid-morning trading following reports that China's second-largest mobile phone company will build a wireless network using QCOM's wireless technology. In response, the security is trading back above its 20-day moving average and is sitting right on its 20-month trendline

In QCOM's options pit this morning, 1,447 and 1,728 contracts have crossed the tape on the out-of-the-money October 75 and 80 calls, respectively. The October 75 call has open interest of 17,980 contracts, while open interest on the October 80 call stands at 14,985 contracts.


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