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by 9/19/2000 11:56 AM
Stocks quoted in this article:
Clear Channel Communications (CCU – 57-3/8) has plunged over five percent so far today despite the fact that a brokerage firm began coverage of the stock at a "strong buy" rating. Today's drop has taken the shares to their lowest level since March 1999. The security is now trading well below all its key moving averages.

Not surprisingly, option activity on CCU has taken on a more pessimistic tone. Schaeffer's put/call open interest ratio (SOIR) jumped from a reading of 0.5 on Friday. After adjustments for September options expiration, the SOIR now stands at 0.89. Today's action is also slanted to the put side. The October 65 put has seen volume of 1,010 contracts so far today. This activity crossed the tape late, making it difficult to assess the investors' intentions. <

by 9/19/2000 11:15 AM
Stocks quoted in this article:
The S&P Retail Index (RLX – 830.5) is struggling this morning, as it has wilted by more than 20 points, or over two percent. This retreat has taken the RLX back below its 20-day moving average, as the index appears ready to log its fifth consecutive losing session.

Top index underperformers so far today include Kohl's (KSS – 57-7/8), down 4.7 percent; Lowe's Companies (LOW – 47-3/16), down 3.3 percent; Costco Wholesale (COST – 33), down 3.3 percent; and Wal-Mart Stores (WMT – 49-1/2), down 3.1 percent. Like the RLX, KSS is now trending back beneath its 20-day moving average.


by 9/19/2000 11:12 AM
Stocks quoted in this article:
Broker/dealer Goldman Sachs Group (GS – 115-1/2) reported this morning that its third-quarter earnings came in at $1.62 per share, surpassing Street projections by 11 cents per share. In response to this positive earnings surprise, the equity rose as high as 121-1/4 before scaling back and is now down over three points in late-morning action.

With this decline, the shares have breached their ascending 10-week moving average, a trendline that has offered perfect support on a weekly closing basis since early June. GS remains beneath both its 10-day and 20-day moving averages, which appear on the verge of a bearish crossover. Such a technical development could have bearish implications for the security's near-term prospects.

In GS's options pit this morning, 1,000 contracts have crossed the tape on the out-of-the-money October 100 put.


by 9/19/2000 10:48 AM
Stocks quoted in this article:
After a 34-percent run from its late-July lows to its early-September all-time high, Halliburton (HAL – 50-9/16) has pulled back to test its 10-week moving average.

It appears that a possible strangle has been initiated using the October 55 call and the October 50 put. Both options have seen over 3,000 contracts cross the tape this morning in large block transactions. A strangle involves either the purchase or sale of the equivalent number of call and put options with the same expiration but different strikes. Both of these contracts are among the most active on the CBOE. <

by 9/19/2000 10:47 AM
Stocks quoted in this article:
This morning, FedEx Corp. (FDX – 38.29) reported fiscal first-quarter earnings of 58 cents per share, four cents ahead of expectations. The company said that "fuel remains a concern." Higher fuel prices pushed fuel costs up $55 million compared to the prior-year period.

The stock is having a subdued response to this news and is currently down fractionally. The shares have been mired in a long-term trading range between 33 and 47 since early August 1999.

Perhaps behind the muted response to the company's positive earnings surprise is overly high expectations. Schaeffer's put/call open interest ratio (SOIR) on FDX is showing high levels of optimism with a low reading of 0.32. This means that call open interest outweighs put open interest by a margin of over three to one for options expiring within the next three months. For more information on SOIR, please visit Schaeffer's Daily Sentiment. <

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