Schaeffer's Daily Market Blog Features: Hewlett-Packard, General Motors, Salesforce.com, Cisco...

CINCINNATI -- Among the stocks featured in the August 17 edition of Schaeffer's Market Blog are Hewlett-Packard (NYSE:HPQ), General Motors (NYSE:GM), Salesforce.com (NYSE:CRM), Cisco Systems (NASDAQ:CSCO), and Stage Stores (NYSE:SSI). Schaeffer's Market Blog is just one of the many free market

commentaries written every day 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=PROB13M&PAGE=1 .

Schaeffer's Market Blog for Thursday, August 17, 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=PROB13C&PAGE=1 .

Posted 10:07 AM Hewlett-Packard Vaults Higher

Yesterday, Dow component Hewlett-Packard (NYSE:HPQ) posted fiscal third-quarter earnings of 48 cents per share. Excluding charges and one-time accounting items, the computer company would have earned 52 cents per share, topping the consensus estimate by five cents per share. These results impressed analysts, who noted that the third quarter is typically one of HPQ's weaker business periods. HPQ's most profitable division was printing and imaging, which earned $884 million and revenue of $6.2 billion. The company's personal systems group earned $275 million on $6.9 billion in revenue. The company also announced that personal computer shipments increased 14 percent in the quarter.

In the first half-hour of trading, HPQ is more than five percent higher thanks to the news. What is more important is that the shares have jumped through long-term resistance in the 34-35 region. Now that this resistance has been broken, there is little overhead to hold the shares down. Keep an eye on the stock today, as my colleague Ed Stenson noted last week, "watch for a clear break above 34." It appears that has happened.

Posted 10:44 AM GM Downgraded

Earlier this morning J.P. Morgan downgraded American automaker General Motors (NYSE: GM) to "neutral" from "overweight." The brokerage cited valuation as the reason for the downgrade, stating, "we suspect the stock will be range-bound through year-end. But on an 18 to 24 month view, another step-change increase in equity value could arise if significant concessions are extracted from the 2007 labor contract."

Technically, it certainly appears (to me) that the range the shares are in is an uptrending channel. In fact, the stock seems to have pulled back to the lower rail of this channel and is rebounding. Now, GM certainly faces some overhead resistance, but the support of its 10-week moving average has held as staunch support. The last time the equity finished a month below this trendline was in the middle of April, and the stock appears to be bouncing off its support yet again.

Posted 1:16 PM Forcing Its Way Higher

The largest advancer in the market as of 1:00 PM is Salesforce.com (NYSE:CRM). The equity is more than 20 percent higher after topping expectations and upping its financial forecast for the fiscal year. CRM posted a net loss of $145,000, breaking even on a per-share basis. Excluding the costs of stock options and other items, CRM would have earned six cents per share. On average, the Street expected earnings of four cents per share. The company saw strength in demand across geographic regions and its average selling prices remained roughly even with the previous quarter. If you would like more information on CRM, check out Jocelynn Drake's Upon Further Review observation.

Posted 1:21 PM Cisco May be Running Into Resistance

Cisco Systems (NASDAQ:CSCO) could be getting a bit toppy right now in the short-term. The networking sector is one of the strongest performing sectors of the day, but their flagship member is actually off half of one percent. This comes amid a ton of call option activity on the stock. The CSCO September 22.50 call options are quite popular today, and total call activity on the shares has been well over six times put option activity each of the past two trading sessions. Optimism might be a little out of hand right now, and the shares could be running out of gas because of it.

Posted 1:37 PM SSI Drops

Turning to the opposite side of the performance spectrum, we have Stage Stores (NYSE:SSI) and its loss of more than 11 percent. The stock plunged more than 20 percent earlier today after announcing that it would delay the release of second-quarter results. SSI added that it will issue a downward revision of its financial statements from the past three years and the first quarter. Completing the bad news trifecta, SSI also warned that internal earnings forecasts were no longer valid. If all these statements weren't bad enough, SSI also said that it needs to perform an internal review of its inventory valuation methodology.

As a result of this bad news, SSI is now poised to finish August below its 10-month and 20-month moving averages. If this happens, it would be the first time the equity finished below this tandem support since April 2003.

For more information on these stocks or any stock in your portfolio, feel free to visit our Schaeffer's Equity Scorecard feature. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB13C&PAGE=1.

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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 .