Schaeffer's Upon Further Review Highlights the Following Stocks: Home Depot, Talbots,...

CINCINNATI -- Today's "Upon Further Review" from Schaeffer's Investment Research focuses on Home Depot (NYSE:HD), Talbots (NYSE:TLB), Williams-Sonoma (NYSE:WSM), and FLIR Systems (NASDAQ:FLIR). "Upon Further Review" is a report that analyzes newsworthy stocks that

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Upon Further Review:

Home Depot : Blue-chip retailer Home Depot (NYSE:HD) continues to suffer from technical woes. The shares have declined under their 10-day and 20-day moving averages since March 28, shedding more than 19 percent. What's more, the security has logged only a handful of closes above both of these trendlines during this time period. The stock caught my eye today because it has breached what should have been strong support at the 35 level. Not only has this region buoyed the equity on a number of occasions since October 2003, but it is also the site of peak put open interest in the July series. This breakdown could result in some sharp losses for the shares as they search for the next layer of support.

Click the following link to see a Daily Chart of HD since March 2006 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=16394 .

Talbots : This morning, Talbots (NYSE:TLB) narrowed its earnings range for the second quarter and lifted its estimate for cost savings from its J. Jill integration efforts. Considering the 19-percent jump in the stock's price, you would have expected the company to move its forecast from a loss to a profit for the quarter. However, in the face of negative earnings news from the likes of Gap (GPS) and Williams-Sonoma (WSM), a little good news from the retail sector was most likely appreciated by investors. Also helping the security today is a bit of short covering. In June, the number of TLB shares sold short jumped 24 percent to a multi-year high of 3.7 million shares, or 14.5 percent of the security's float. As these bears rush to buy back their pessimistic positions, the stock enjoys a flood of fresh buying pressure.

Williams-Sonoma : While we're on the topic of retailers, Williams-Sonoma (NYSE:WSM) updated its forecasts for the second quarter and year to reflect the departure of its chief executive, "challenging" business trends, and extra income related to unredeemed gift cards. The shares have lost nearly five percent this morning and have hit a new annual low. However, today's doesn't mark the start of the shares' underperformance. WSM has declined under its 10-day and 20-day moving averages since May 11, relinquishing roughly a quarter of its value. This downtrend is likely to continue considering the equity's sentiment backdrop. The stock's put/call open interest ratio is in the bottom one-quarter of all reading taken during the past 52 week and short interest is on the decline. This combination of lingering optimism and technical weakness often has bearish implications from a contrarian perspective.

Click the following link to see a Daily Chart of WSM since April 2006 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=16394 .

FLIR Systems: FLIR Systems (NASDAQ:FLIR) received a boost this morning on news that Textron's (TXT) Bell Helicopter unit selected FLIR's BRITE Star II airborne stabilized multi-sensor system for the U.S. Army's armed reconnaissance helicopter program. The shares of FLIR are up more than 20 percent today, boosted by a little short-covering action. In June, short interest spiked by 20 percent to 6.4 million shares, or 9.9 percent of the security's float. However, it is interesting that the stock's gains have been stopped short by resistance in the 26.50 region. This area has capped the security since it gapped lower on April 18. Should the shares fail to break through this region, there is a good chance it could consolidate between resistance at 26.50 and support at the 25 level until potential support in the form of its 10-day moving average catches up with the shares.

Click the following link to see a Daily Chart of FLIR since January 2006 with 10-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=16394 .

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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 .