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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 684.84+0.6%4:00 PM EST
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To: Logain Ablar who wrote (40550)2/17/2004 2:30:29 PM
From: Johnny Canuck  Read Replies (4) of 69173
 
In another example of the conflicting sentiment on the tech sector, Rambus (Nasdaq:RMBS) saw put activity pop at its 22.50 strike in the February series. Options traders added 8,497 contracts to the strike, causing RMBS's SOIR to surge to 0.52 over the weekend. This ratio now stands above 78 percent of all such readings taken over the past year. Short interest toward the stock has been leaning towards the optimistic end of the spectrum, however, as the more than four million shares shorted leave investors with approximately a day to cover their positions. Wall Street has all but ignored this semiconductor maker, with only two analysts covering the stock (both maintaining a "strong buy" rating).

RMBS is yet another company to fall victim to the elevated expectations on the tech sector. The stock has been falling under pressure from its declining 10-day moving average since breaking below the trendline after posting fourth-quarter earnings that bested the Street's estimate. Further pain was inflicted on the security when the European patent office revoked one of RMBS's semiconductor patents, smacking the stock for a six-point loss. The good news for the shares lies at their 10-month moving average, from which they are currently rebounding. What's more, despite recent troubles, RMBS has still managed to outperform the COMP since June 2002. Additional analyst coverage and the indication of rising pessimism could play out in RMBS's favor in the coming months.

Click the following link to see the Monthly Chart of RMBS since November 2002 with 10-Month Moving Average:

schaeffersresearch.com .
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