Schaeffer's Option Activity Watch Features Biomet, MedImmune,

Business Editors
Today's Schaeffer's Option Activity Watch features
Biomet (Nasdaq:BMET), MedImmune (Nasdaq:MEDI), and Nokia (NYSE:NOK).
The Option Activity Watch is a report that takes a closer look at
three equities appearing in our most unusual option activity report
from the previous day. The Option Activity Watch is published on - the home of Bernie Schaeffer and
Schaeffer's Investment Research. For additional information about this
report or to have it delivered to you free via email every day click
on the following link: . 
Schaeffer's Option Activity Watch: 
1. Biomet (Nasdaq:BMET) produces reconstructive products (such as
hips, knees, and shoulders), fixation devices, orthopedic support
devices, dental implants, and operating room supplies. The company was
the center of some heavy put trading on Wednesday, with open interest
at its March 35 strike jumping from 2,475 to 4,800 contracts. This
front-month option is now the site of peak put open interest and could
help to support the shares should they pull back. Pessimism has been
growing toward this stock recently. The security's Schaeffer's
put/call open interest ratio (SOIR) checks in at 2.20, as puts more
than double calls in the front three months of options. In addition,
this reading is the highest of all those taken over the past 52 weeks.
Furthermore, short interest skyrocketed 39 percent in February to 5.5
million shares. Wall Street has its doubts as well, with 12 of the 22
analysts following the firm rating it a "hold" or worse. Any upgrades
could boost the security higher. 
This overwhelming pessimism seems out of place considering that
BMET has rallied higher since August along its 10-week and 20-week
moving averages. The equity's climbs appears to have slowed as it
waits for its intermediate-term trendlines to catch up. Looking ahead,
the company's earnings announcement on March 17 could act as a
catalyst to rejuvenate the shares. The Street is currently
anticipating a profit of 32 cents per share - a 14-percent improvement
over earnings for the same period a year ago. In fact, BMET has met or
surpassed the consensus estimate for the past five quarters. Another
positive report could help to springboard the shares higher as
investors rush to unwind their bearish bets. 
Click the following link to see the Weekly Chart of BMET since May
2003 with 10-Week and 20-Week Moving Averages: . 
2. Meanwhile, the technical picture for MedImmune (Nasdaq:MEDI)
has been less than impressive. The stock has underperformed the Nasdaq
Composite since March and was recently rejected by staunch resistance
at its declining 20-week moving average (at the 25 level). MEDI has
not logged a weekly close above this trendline since September.
Investors have shown their displeasure with the company, as pessimism
remains high. While the equity's March 25 call added more than 2,200
contracts yesterday, its SOIR is still higher than 90 percent of all
those taken over the past year. Furthermore, the number of MEDI shares
sold short increased by 11 percent in February to eight million
shares. However, these positions can be covered in less than two days
of trading, offering up little in the way of potential fuel for a
covering rally. Wall Street is entrenched in the bearish camp, with 14
of the 23 analysts following MEDI rating it a "hold" or worse. With
the combination of technical and potential options-related resistance
at the 25 level (site of peak March call open interest), the shares
could continue their downtrend as pessimism grows. 
Click the following link to see the Weekly Chart of MEDI since
July 2003 with 20-Week Moving Average: . 
3. Nokia (NYSE:NOK) has managed to rebound off support at its
20-day moving average this morning. The shares have additional support
below at their rising 10-week and 20-week moving averages (at 20.50
and 19, respectively). Sentiment toward the security is mixed. The
equity saw more than 2,700 contracts added to its April 22.50 call
yesterday, however, its SOIR is still higher than 75 percent of those
taken over the past year. Elsewhere, short interest plunged 20 percent
over the most recent reporting period to 12.6 million shares. The
equity's short-interest ratio now sits at a paltry 1.32 days to cover,
providing little hope of a covering rally boosting the stock. Wall
Street is enamored of the company as well, with 23 of the 28 analysts
following NOK rating it a "buy" or better. Traders should keep an eye
on the stock's 22.50 level. This area is currently the site of peak
front-month call open interest with roughly 29,200 contracts and could
easily serve to halt any rally attempts. A rejection here and/or a
break below its intermediate-term trendlines could force some of these
optimistic analysts to rethink their ratings. 
Click the following link to see the Daily Chart of NOK since
November 2003 with 20-Day Moving Average: . 
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About Schaeffer's Investment Research ( 
Schaeffer's Investment Research, founded by Bernie Schaeffer in
1981, is financial information and trading resources company. It
publishes Bernie Schaeffer's Option Advisor, the nation's leading
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Tom Godich, 513-589-3800
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