Today’s “Behind the Headlines” from Schaeffer’s Investment Research focuses on Barnes & Noble (NYSE:BKS), DJO Inc. (NYSE:DJO), Sony (NYSE:SNE), and Whirlpool (NYSE:WHR). “Behind the Headlines” is a report that analyzes newsworthy stocks that are generating a lot of attention on Wall Street. “Behind the Headlines” is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.
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Behind the Headlines:
Barnes & Noble: The shares of Barnes & Noble (NYSE:BKS) have shot higher this afternoon following an upgrade from "sell" to "neutral" at Goldman Sachs. The brokerage firm stated that it expects the bookseller to exceed its third-quarter guidance and consensus forecasts. Today's jump has taken out resistance at the 37 level, which had capped the shares since mid-June. What's more, the equity has hurdled former resistance at its declining 20-week moving average, which has guided the stock lower since mid-May. Furthermore, the security could see additional upside as pessimism continues to unwind. The stock's Schaeffer's put/call open interest ratio has drifted lower for more than a month, as options players have shifted from an extremely bearish stance toward more bullish leanings. However, the current reading of 0.61 is still higher than 73.7 percent of those taken during the past 52 weeks, indicating that there is still room for investors to grow more bullish, adding buying pressure to the shares.
Click the following link to see a Weekly Chart of BKS since March 2006 with 20-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=17412 .
DJO Inc.: Before the open, DJO Inc. (NYSE:DJO) said Monday it expects revenue for the third quarter to be at least at the upper end of its previous forecast of between $106 million and $108 million. The security has popped almost 10 percent higher this afternoon on the news. However, I find myself wondering if today's rally is going to mark another near-term top for the shares. The equity spiked sharply higher on May 4 and again on August 3, only to roll lower during the next few weeks. From a longer-term perspective, the stock has consolidated into support at its ascending 10-month moving average, which has guided DJO higher since December 2004. What's more, DJO has enjoyed the tandem support of its 10-month and 20-month trendlines since April 2003. This long-term support could help the shares finally break out of their trading range.
Click the following link to see a Monthly Chart of DJO since February 2003 with 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=17412 .
Sony: Sony (NYSE:SNE) continues to come under fire, literally. The firm reported that it is looking into the details of a ThinkPad laptop computer fire, including whether the laptop was equipped with a Sony-made battery. Last month, both Dell (DELL) and Apple Computer (AAPL) recalled notebook batteries made by SNE due to problems. The shares of SNE have pulled back on the news, but have rebounded off support at the 40.50 level. The 40-40.50 region has helped to buoy the shares on several occasions during the past few months. What's more, this area is home to the equity's ascending 80-week moving average. The stock has not finished a week below this trendline since November 2005. A bounce off this trendline could shake out some of the bears and add some lift to the shares.
Click the following link to see the Weekly Chart of SNE since December 2004 with 80-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=17412 .
Whirlpool: Citigroup slashed its rating on Whirlpool (NYSE:WHR) from "hold" to "sell," stating that it believes the appliance market could be tougher than expected in 2007. The negative news caused the shares to gap lower this morning, tagging support at the 83 level, which is the site of former resistance for the shares. The stock has since rallied back above the 85 level, which has served as a region of support for WHR in the past. What's more, the 83 level is home to the stock's 20-month moving average, while the 85 level is the site of the stock's 10-month moving average. These trendlines have helped to guide the shares higher since May 2005.
Click the following link to see a Monthly Chart of WHR since August 2004 with 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=17412 .
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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.