Business Editors
CINCINNATI--(BUSINESS WIRE)--Nov. 12, 2003
Today's Street Chatter from SIR focuses on: General Electric (NYSE:GE), Pfizer (NYSE:PFE), and Tyco International (NYSE:TYC).
Street Chatter focuses on three stocks that are generating a lot of attention on Internet message boards and is published every day at SchaeffersResearch.com . For additional information about this report or to have it delivered to you via email everyday click on the following link: http://www.schaeffersresearch.com/addinfo .
Street Chatter:
1. General Electric (NYSE:GE) announced this morning that its Healthcare Financial Services division will be acquiring HPSC, a provider of financing for medical and dental practices, for $72.4 million, or $14.50 per share. This represents a premium of nearly 60 percent for HPSC stock compared to its closing price yesterday. GE officials say the acquisition will be completed later this year or in early 2004. GE shares have risen slightly today but continue to battle with their 10-week and 20-week moving averages, which are perched overhead and are nearing a bearish crossover. On the sentiment front, Schaeffer's put/call open interest ratio (SOIR) for GE has been rising sharply since early September. The indicator currently stands at 0.77, which is just a percent away from a new annual peak. On the other hand, optimistic sentiment is on the rise among the short-selling crowd. The number of GE shares sold short declined by 17 percent last month to 41.2 million, which is merely two times the equity's average daily volume. In today's trading, options players are honing in on the January 30 and January 2005 30 calls, trading almost 8,000 and just over 7,000 on these out-of-the-money positions, respectively.
Click the following link to see the Weekly Chart of GE Since January 2003 With 10-Week and 20-Week Moving Averages:
http://www.schaeffersresearch.com/wire?ID=8866 .
2. New studies have found that Pfizer's (NYSE:PFE) cholesterol-lowering drug, Lipitor, is also useful in preventing plaque build-up on arteries, according to a report released this morning. PFE has climbed around two percent higher today, aided by this news, but the stock is now perched near potential double-top resistance at the 32.50 mark, which is the site of the stock's September peak. The shares have been slumping since June and continue to struggle with their 10-month moving average, which is located just overhead. The equity has not managed a monthly close above this long-term trendline since November 2001. Meanwhile, options players are turning to the bullish camp, as Schaeffer's put/call open interest ratio (SOIR) for PFE has been declining of late after reaching an annual high on October 21. Additionally, the number of shorted PFE shares dropped 10 percent during the last reporting period to 53.3 million, amounting to a short-interest ratio of 2.97. PFE options pits are active today, as speculators are trading the November and December 32.50 calls, both of which are already the sites of heaviest open interest in their respective series.
Click the following link to see the Daily Chart of PFE Since June 2003:
http://www.schaeffersresearch.com/wire?ID=8866 .
3. Troubled Tyco International (NYSE:TYC) said this morning that it plans to delist its shares from the London Stock Exchange as of December 12, citing low trading volume and high maintenance costs. Technically speaking, the shares have been making some headway of late following their sharp decline in early 2002. TYC recently moved above its 10-month and 20-month moving averages, which themselves have completed a bullish crossover. These phenomena are technical indicators that often point to additional strength in the underlying stock's future. Schaeffer's put/call open interest ratio (SOIR) for TYC weighs in at 1.08, with near-month puts slightly outweighing near-term calls. This indicator, which shot higher after October options expiration, is currently higher than 96 percent of all the past year's worth of data. Historically speaking, when the equity's SOIR reflects this degree of pessimism, the equity has been likely to outperform its typical price action over the subsequent 20 trading days. On the short-interest front, pessimism is rampant, as illustrated by the nearly 73 million TYC shares sold short, for a hefty short-interest ratio of more than eight times.
Click the following link to see the Monthly Chart of TYC Since October 2000 With 10-Month and 20-Month Moving Averages:
http://www.schaeffersresearch.com/wire?ID=8866 .
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