Schaeffer's Daily Market Blog Features Alcoa, Overland Storage, Taiwan Semiconductor,...

CINCINNATI -- Among the stocks featured in the January 10 edition of Schaeffer's Market Blog are Alcoa (NYSE:AA), Overland Storage (NASDAQ:OVRL), Taiwan Semiconductor (NYSE:TSM), Neurocrine Biosciences (NASDAQ:NBIX), and Adolor (NASDAQ:ADLR). 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=PROB12M&PAGE=1 .

Schaeffer's Market Blog for Tuesday, January 10, 2006:

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 .

10:53 AM Alcoa Falls on Disappointing Earnings

I wrote about Alcoa (NYSE:AA) and heavy call activity in this space last Friday. There was a significant amount of out-of-the money call buying at the February 32.50 call (AA BZ). With AA reporting disappointing earnings yesterday after the close, those options are now essentially worthless unless AA were to rise above 32.50 before February's option expiration. But for now they're bid 0.05. Calls and puts were very active yesterday as well. More than 28,000 calls and 10,000 puts traded yesterday. The January 32.50 call (AA AZ) saw its open interest increase to 38,292 from 33,303 on volume of more than 12,700 contracts. AA is currently trading down 5.7 percent at 28.82.

11:09 AM Overland Storage Gains on Upside Earnings Guidance

According to Yahoo! Finance, Overland Storage (NASDAQ:OVRL) delivers data protection solutions designed for backup and recovery to ensure business continuity. This morning before the market open, OVRL guided earnings for Y07 and Y08 higher. The company sees Y07 earnings per share of 35 to 40 cents per share, versus the consensus estimate for a loss of six cents. The company also sees revenues coming in higher than previously expected at $280-285 million, versus the consensus estimate of $192.5 million. For Y08, OVRL sees earnings of 75 to 85 cents per share on revenues of $320-330 million. This positive earnings revision has sent shares of OVRL rocketing 22 percent higher to $10.00.

11:48 AM Investors Add Puts on Taiwan Semiconductor

Yesterday, puts traded briskly on Taiwan Semiconductor (NYSE:TSM). Investors added more than 5,260 new positions of open interest at the February 10 put (TSM NB). Implied volatility on the contract increased 13 percent, suggesting that the contracts were purchased. This morning, Morgan Stanley lowered their rating on TSM from "overweight" to "equal weight," citing "little room for positive surprises" in the company's near-term outlook.

Technically speaking, TSM has been strong recently. A check on its weekly chart reveals that the stock broke out to a new 52-week high in late January. Market players should keep a close eye on TSM to see if today's analyst downgrade is able to put a damper on the stock's recent momentum.

2:54 PM Biotech Still Strong

One sector that has been strong and continues to look great is biotech. A few names that we've played here at Schaeffer's over the past month from this group are Amylin Pharmaceuticals (AMLN), Celgene (CELG), and Vertex Pharmaceuticals (VRTX). Those three have had great runs and very well might have more room left to run, but today I looked for some names that hadn't yet moved - in other words, I'm looking for them to play catch-up. Two that really stand out are Neurocrine Biosciences (NASDAQ:NBIX) and Adolor (NASDAQ:ADLR). Should biotech remain strong, I think these two could be nice plays.

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 .