Schaeffer's Street Chatter Features Hewlett-Packard
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CINCINNATI, Aug. 20 /PRNewswire/ -- Today's Schaeffer's Street Chatter features Hewlett-Packard (NYSE: HPQ), Krispy Kreme Doughnuts (NYSE: KKD), and Walt Disney (NYSE: DIS). A new daily feature available on SchaeffersResearch.com is Street Chatter. Every day, we'll focus on three stocks that are generating a lot of attention on Internet message boards. We hope this will effectively offer information on equities that are popular in the investing world and will be a beneficial resource for our readers. For additional information about this report or to have it delivered to you free via email every day click on the following link. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo .
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Schaeffer's Street Chatter:
Leading personal computer maker Hewlett-Packard surprised the Street last night when it issued its third-quarter earnings report. The company earned $297 million for the period, a welcome change from the $2.02 billion loss suffered by HPQ during last year's third-quarter reporting period. However, earnings came in at 23 cents per share, three cents below analysts' estimates. HPQ officials also reported the loss of 1,300 jobs, which were in addition to 3,500 job eliminations in the second quarter. After reaching a new annual high in yesterday's trading, HPQ has dropped almost 10 percent lower today on heavy volume. The stock has breached its 10-day and 20-day moving averages, which were on their way to a bullish crossover before today's setback. HPQ could benefit from long-term support, however, in the form of its 20-week moving average. The shares are currently hugging this trendline, which has not been violated on a closing basis since the beginning of May. Not surprisingly, HPQ options pits are active today, most notably at the September 22.50 call and the September 20 call and put strikes.
Click the following link to see a Daily Chart of HPQ Since April 2003 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=8299 .
Krispy Kreme Doughnuts
Krispy Kreme Doughnuts continues to fly high, although some analysts are not impressed. An article in this weekend's Barron's expressed concern over the stock's recent rally, saying it might have a turnaround on the horizon. Sentiment indicators, however, suggest otherwise. Options players have begun to flock to the bullish camp, as Schaeffer's put/call open interest ratio (SOIR) for KKD declined after expiration from last week's reading of 1.54 (in the 86th annual percentile) to its present weighting of 0.94, in the 39th percentile. There is still ample room on the bullish bandwagon, however, among the speculative crowd. What's more, KKD remains a heavily shorted stock. After the last reporting period, there were more than 11 million shares sold short, for a short-interest ratio of more than 12 times. Although some of the stock's recent gains have been attributed to short-covering activity, there remains the possibility of additional covering boosting the equity further. The stock has been holding at its new all-time high for the past week, digesting some of these recent gains and pulling toward support at its five-day moving average.
Click the following link to see a Daily Chart of KKD Since May 2003 with 5-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=8299 .
Walt Disney is in the news today after Smith Barney removed the stock from its recommendation list, saying the equity's 32.50-percent advance since February may have essentially been too far, too fast. In separate news, the firm's broadband service debuted in Spanish markets earlier today. DIS's aforementioned rally has taken the form of a steadily uptrending pattern of higher lows. The equity has turned marginally lower today but is clinging to potential support at its 20-day moving average. On the options front, Schaeffer's put/call open interest ratio (SOIR) for DIS stands at 0.55, in the 42nd annual percentile. Quantifying this result, I tested the equity's SOIR on Schaeffer's Sentiment PowerTools (http://www.schaeffersresearch.com/powertoolsobs ). When the security's SOIR percentile stands between 40 and 45 percent, DIS has subsequently endured slight underperformance compared to at-any-time results. In other sentiment news, there are presently more than 57 million DIS shares sold short, amounting to a short-interest ratio of nearly 6.5 times.
Click the following link to see a Daily Chart of DIS Since March 2003 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=8299 .
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About Schaeffer's Investment Research (www.SchaeffersResearch.com ):
Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .
Contact: Tom Godich at Schaeffer's, Phone: ; Email:
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