Schaeffer's Daily Market Blog Features Juniper Networks, Seagate Technology, Caterpillar,...

CINCINNATI -- Among the stocks featured in the April 20 edition of Schaeffer's Market Blog are Juniper Networks (NASDAQ:JNPR), Seagate Technology (NYSE:STX), Caterpillar (NYSE:CAT), Best Buy (NYSE:BBY) and Intel (NASDAQ:INTC). Schaeffer's Market Blog is just one of the many free market

commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1M&PAGE=1

Schaeffer's Market Blog for Wednesday, April 20, 2005:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

9:53 AM Juniper Networks Beats by a Penny, Revenue Doubles

Juniper Networks (NASDAQ: JNPR) announced first-quarter earnings results of 16 cents per share last evening, beating the consensus estimate of 15 cents per share. First-quarter revenue came in at $449 million, more than double the $224 million during the same period last year. The company also raised its earnings guidance for the current quarter. Analysts were expecting 16 cents per share on revenue of $458 million. JNPR projected earnings of 17 cents on revenue between $470 million and $475 million.

Heading into the announcement, the sentiment toward JNPR was mixed, with options traders showing pessimism, short sellers showing signs of optimism, and analysts remaining neutral. The Schaeffer's put/call open interest ratio (SOIR) was at 0.83, which is higher than 92 percent of the readings for the past year. The short-interest ratio was at 2.71 with a 19-percent decrease in the number of shares sold short last month. Of the 27 analysts rating the stock, 13 rated it a "buy", 13 rated it a "hold", and one rated it a "sell." Merrill Lynch upgraded the stock from "neutral" to "buy" this morning. JNPR shares were up 9.5 percent at last check.

10:30 AM Seagate Technology Surprises Street

Hard drive manufacturer Seagate Technology (NYSE: STX) reported third-quarter earnings results that beat estimates by eight cents per share. The company earned 45 cents per share compared to the 37 cents per share that analysts were expecting. Revenue increased for STX by 44 percent over the same period one year ago. Option traders were pretty bullish on the firm, as evidenced by the Schaeffer's put/call open interest ratio (SOIR) of 0.29. This reading is lower than 96 percent of the readings for the past year. The short sellers had taken a strong interest in STX as the short-interest ratio stood at 9.08 as of the latest reporting period. Analysts seem to like the stock, but not love it. Out of 18 analysts, 10 rated STX as a "buy," seven rated it a "hold," and one rated it as a "sell." STX is up 4.7 percent in early trading.

12:03 PM Schaeffer's Small-Cap Series

A new alert series has launched at Schaeffer's Investment Research, and we are thrilled by its potential, as we know that the very best things can often come in small packages. Schaeffer's Small-Cap Series is an options service designed to capitalize on the solid momentum, the quick movement, and the long-term outperformance in the small-cap sector.

1:55 PM Call Activity at 90 May Hold Back the Cat

Caterpillar (NYSE: CAT) reported quarterly earnings that handily topped Wall Street's estimate, and lifted its future earnings and sales guidance. Despite the good news, extreme optimism in the form of call option buying could be putting a lid on more upside for the shares. There is currently front-month (May) call volume of more than 14,000 contracts versus about 3,500 contracts of May put volume. Especially important is the most active contract, the May 90 call. This level of call interest could act as resistance for the shares at 90. The intraday chart of CAT shows how the stock gapped up to near 90 and then pulled back to around 88. The stock then rallied again, only to fail around 89.75. The shares are currently trading at $89.45, up $4.50, or 5.3 percent.

2:27 PM Pessimism Rising Toward Best Buy

Pessimism has been on the rise toward electronics retailer Best Buy (NYSE: BBY) recently. Today's volume put/call ratio on the security is currently 4.37, which means that 437 put option contracts have traded for every 100 calls. Pessimism in the form of option activity has been rather high lately. The current Schaeffer put/call open interest ratio (SOIR) on BBY is 1.35, which is higher than 87 percent of all readings over the past year. If any good news comes along to trigger a change of mood, the stock could find some short-term support from this extreme pessimism.

2:36 PM More Weakness this Afternoon

After two days of a low-volume bounce, the market is back to selling off this afternoon. All three major markets are near their lows for the day, mainly thanks to a weak Beige Book report at 2:00 p.m. Eastern time. More troubling is the action we're seeing from Intel (NASDAQ: INTC) and Caterpillar (NYSE: CAT). Both of these names gapped higher at the open thanks to strong earnings, but have since steadily sold off, and are now near their lows for the day. Today's action suggests that last Friday's bottom might be broken and new lows could be right around the corner.

3:09 The S&P 500 Runs into Resistance

One trendline that we follow pretty closely is the 200-day moving average. This one tends to be a good area of support or resistance, as numerous firms will use it to load up or sell. Now check out the S&P 500 Index (SPX) and its 200-day trendline. The shares sliced right through this level last week during the sell-off and have attempted a weak-volume bounce the past two days, but today they have been stymied at this level. Watch closely, because if the market can't get over this level soon and on stronger volume, we can expect more selling soon.

The above are just a few of today's Daily Market Blog entries. Click here to read all of today's Daily Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

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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