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A developer of advanced television services including digital video recorders (DVR), TiVo Inc. (TIVO – Analyst Report), announced that its third-party marketing vendor, Epsilon has been impacted by a massive security breach.

TiVo has warned its customers not to provide any personal information to anyone sending e-mail using the company’s name.

According to TiVo, Epsilon’s database including e-mail addresses of some TiVo customers was hacked by an unauthorised person.

TiVo employs the marketing services of Epsilon, a unit of Alliance Data Systems Corp. (ADS – Snapshot Report), which sends more than 40 billion emails annually and has more than 2,500 clients including seven of the Fortune 10 companies.

According to TiVo, Epsilon does not have access to service or credit card details, so all such data remains secured. However, TiVo will conduct its own internal investigation in order to verify (JPM)Epsilon’s information.

Banking and retail hotshots JP Morgan Chase & Co. (JPM – Analyst Report),  Citigroup Inc. (C – Analyst Report), Capital One Financial Corp. (COF – Analyst Report) and Kroger Co. (KR – Analyst Report)  were the other victims of this security breach. Drugstore chain Walgreen Co. (WAG – Analyst Report) and specialty apparel retailer New York & Co. were also affected.

Epsilon is conducting a full investigation and reported that the breach happened on March 30, 2011.

The wide-ranged sophisticated computer attacks reflect the growing risk that companies and governments face from cyber crime. Countries are concerned regarding the growing number of attacks on information technology systems as hackers look to steal data, intellectual property, money and even sensitive government information.

Most recently, EMC corp. (EMC – Analyst Report) reported a highly sophisticated cyber attack using a method called “advanced persistent threat” (APT) to extract information about its RSA product used to secure web-based services, called SecurID two-factor authentication.

This is the same type of attack that compromised systems at Google Inc. (GOOG – Analyst Report) and as many as 100 other companies in late 2009.

IBM Corp.’s (IBM – Analyst Report) latest X-Force 2010 Trend and Risk report mentioned more than 8,000 new vulnerabilities, a 29.0% increase from 2009.

Web applications continued to be the category of software affected by the largest number of vulnerability disclosures, representing 49.0% in 2010. According to IBM’s report, a targeted attack technique known as “spear phishing” grew in importance in 2010.

The IBM X-Force report stated that in 2010 nearly a quarter of all financial phishing emails targeted banks located in Europe.  It also identified the UK, Germany, Ukraine and Romania among the top 10 countries sending spam in 2010.

According to the UK security minister, cyber attacks on government, businesses and individuals are expected to have a yearly impact of at least £27.0 billion on the country’s economy.

In the recent past, US Corporations were favorite targets for hackers. According to cyber security firm McAfee, Chinese hackers had hacked US fuel companies for years. The campaign, codenamed “Night Dragon” has been in full effect since 2009 and could have begun as early as 2007.

According to M86 security labs, the exploding smartphone tablet device market, the rise in online banking and a shift from using simple exploit kits to more sophisticated Malware-as-a-Service (Maas) model by hackers are the primary concerns for 2011.

Recommendation

We believe this security breach at Epsilon will have no significant effect on TiVo’s business in the near term. However, we expect TiVo to adopt new security solutions that will increase its operating expenses, thus hurting its profitability over the long term.

Moreover, TiVo may also stop using third-party marketing services to tackle security concerns. However, this will be an additional burden and can hurt its core operations going forward.

We maintain our Neutral rating over the long term (6-12 months). Currently, TiVo has a Zacks #4 Rank, which implies a Sell rating on a short-term basis.

View the original article here

Andrea Kramer (akramer@sir-inc.com)

Achillion Pharmaceuticals, Inc. (ACHN – 7.18) skyrocketed to a new multi-year high of $7.50 today, after the firm announced positive mid-stage trial results for its chronic hepatitis C treatment.

More specifically, the company said 75% to 81% of patients who took its ACH-1625 in combination with their current standard of care showed notable antiviral activity in the fourth week. Furthermore, the firm said the drug showed a promising tolerability and safety profile, and expects to report complete early virology response data from the trial by the end of 2011.

In light of the encouraging news — and the stock’s resulting surge — call traders have piled onto ACHN. In early afternoon trading, the drug maker has already seen nearly 1,900 calls cross the tape – more than 11 times its anticipated daily call volume. In comparison, fewer than 100 ACHN puts have changed hands so far.

Most active has been the equity’s April 5 call, which has seen 1,550 contracts traded on open interest of just 1,525, suggesting new positions are being added here today. However, the bulk of the calls traded between the bid and ask prices, meaning we can’t yet say for certain that investors are buying bullish bets.

At last check, ACHN has chipped away at its early lead, with the stock up 1.7% to explore the $7.18 region.

View the original article here

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Analyst Blog  Noble Halts Drilling at Leviathan By: Zacks Equity Research April 04, 2011 | Comments: 0 Recommended this article (2) NBL | CVX | APC Print   Share

Noble Energy Inc. (NBL - Analyst Report) said it has temporarily stopped drilling at its Leviathan #1 location, offshore Israel, due to a wear on the wellbore casing. Noble said the oil drilling at the well will be suspended until it secures the required material and equipment to complete the work. The company was performing tests for the deeper potential in the well.

In the meantime, Noble Energy plans to move the Sedco Express rig to work upon the development drilling at the Tamar field. Drilling at the field is expected to begin in about a week’s time. The company expects to start commissioning the Tamar field in late 2012.

Noble Energy is the operator and owns about 39.66% interest in the Leviathan prospect, offshore Israel, in the Rachel license. Derek Drilling and Aver Oil Exploration are among other interest owners with 22.67% each and Ratio Oil Exploration with the remaining 15% interest.

Noble is also the operator of Tamar, also offshore Israel, in the Matan license. The company owns about a 36% working interest in the field. Co-owners in the field include Isramco Negev 2 (28.75% interest), Delek Drilling (15.625%), Avner Oil Exploration (15.625%) and Dor Gas Exploration (4%).

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The company has core operations onshore in the U.S., primarily in the DJ Basin, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean and offshore West Africa.

The prospects of Houston, Texas-based Noble Energy look good, mainly due to its well-balanced high-grade hydrocarbon portfolio, brilliant execution capability and competitive cost structure. Moreover, its disciplined investment approach, strong balance sheet and low debt-to-capital ratio gives it excellent financial flexibility to fund development projects.

Looking ahead, we see the stock performing in line with the broader market and rate it as Neutral. Noble Energy currently retains a Zacks #3 Rank (short-term Hold). The company is rated at par with its closest peers Anadarko Petroleum Corporation (APC - Analyst Report) and Chevron Corporation (CVX - Analyst Report), based on the short term Zacks Rank.

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Comment Free Stock Analysis From Zacks   Includes Zacks Long-Term Recommendation and Target Price ANADARKO PETROL (APC) CHEVRON CORP (CVX) NOBLE ENERGY (NBL) Disclosure / Disclaimer Link Add a Comment Please login or register to post a comment

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Copyright 2011 Zacks Investment Research

Zacks Investment Research is one of the most highly regarded firms in the investment industry. The guiding principle behind our work is that there must be a good reason for brokerage firms to spend billions of dollars a year on stock research. Obviously, these investment experts know something special that may be indicative of the future direction of stock prices. From day one, we were determined to unlock that secret knowledge and make it available to our clients to help them improve their investment results.

NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.

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GameStop Corporation (GME – Analyst Report) is well positioned to take advantage of the growing market for video game products and PC entertainment software. The company’s strategy is to grow through store expansions in favorable localities, by providing the largest title collection of video games, and by leveraging its first-to-market distribution network to offer the latest hardware and software releases.

The company holds a significant position in the used video game products market. GameStop provides a greater selection of used video game products for both current and previous generation platforms. The market for used video game products has been resilient to the recent economic downturn.

GameStop has been also actively managing its capital. The company intends to generate adequate cash flow from operations in the next four to five years, to fund opening of new stores, improvements to existing stores, refurbishment upgrades, buyout plans and a share repurchase program.

Moving forward, GameStop now expects fiscal 2011 earnings in the range of $2.82 to $2.92 per share, and reflects a year-over-year growth of 5.6% to 9.4%. The company anticipates net sales to increase in the range of 6.0% to 8.0% with an increase of 3.5% to 5.5% in comparable-store sales.

For first-quarter 2011, GameStop anticipates net sales to increase in the range of 6.0% to 8.0% with an increase of 4.0% to 6.0% in comparable-store sales. GameStop expects earnings in the range of 53 cents to 55 cents a share, representing a year-over-year growth of 10.4% to 14.6%.

Recently, GameStop announced the acquisitions of Spawn Labs, a technology company, which allows users to view video almost in real time, and Impulse Inc., a leading company in digital circulation.

The acquisition of Spawn Labs will enable the clients of GameStop to gain instant access to a large number of HD quality video games on demand and will facilitate the company in delivering a rich experience to its customers through web-enabled devices.

Additionally, Impulse Inc. offers a vast digital distribution platform, thereby helping the users to access their preferred games instantly with an option of downloading the same through their web-enabled devices.

The gaming industry is experiencing a transition leading to a decline in handy and console game sales with a rise in consumer spending on digital download, mobile gaming apps and social network games. In such a scenario, the acquisitions will help GameStop to hold its ground.

The video game industry is highly competitive, and retail heavyweights such as Wal-Mart Stores Inc. (WMT – Analyst Report), Target Corporation (TGT – Analyst Report) and Best Buy Company Inc. (BBY – Analyst Report) have also entered the video game market. These larger retailers could dent GameStop’s sales and margins.

Moreover, the company’s customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels and high household debt levels. This may prompt consumers to curtail their entertainment expenditures, which in turn, could result in lower store traffic and reduced profitability for the company.

Currently, consumers can only download a limited number of PC entertainment software and older generation video games from the Internet. However, with the advancement of technology, if consumers’ accessibility increases, they may no longer prefer to buy PC entertainment software and video games through the company’s retail stores.

Given the pros and cons we prefer to be Neutral on the stock in the long-term. GameStop also holds a Zacks #3 Rank, which translates into a short-term Hold rating, and correlates with our long-term recommendation.

View the original article here

Andrea Kramer (akramer@sir-inc.com)

Gulf Resources, Inc. (GFRE – 6.50) skyrocketed more than 19% on Tuesday, thanks to a bullish brokerage note from Brean Murray Carret. More specifically, the analysts launched coverage of the commodity concern with a “buy” rating and a $10 price target, noting the company’s generous margins and free cash flow, as well as its minimal debt.

As a result, options speculators swarmed the stock, with close to 2,800 calls and 2,300 puts exchanged. By contrast, GFRE was projected to see fewer than 300 calls and about 400 puts cross the tape.

Digging deeper into the data, the 5 strike appears to have been the most popular on both sides of the options aisle. More specifically, the April 5 call saw open interest jump by nearly 850 contracts overnight. Nevertheless, the out-of-the-money 7.50 strike remains home to peak call open interest in the front-month series, with about 1,600 contracts in residence.

On the flip side, put open interest at the May 5 strike swelled by more than 400 contracts after yesterday’s closing bell. What’s more, the majority of the back-month puts changed hands at the ask price, hinting at buy-to-open activity.

Technically speaking, the shares of GFRE have given up a portion of yesterday’s gains, surrendering 1.8% to flirt with $6.50 at last check. The stock is now battling a familiar foe in the form of its 10-day moving average, which — along with its 20-day counterpart — has rejected nearly all of GFRE’s advances in 2011.

View the original article here

Jacobs Engineering Group Inc. (JEC – Analyst Report) recently received a follow-on contract from the U.S. Air Force for a potential value of approximately $87 million. The effective date was April 1, 2011, with a tenure of five years, including a three-year basic period of performance and one two-year award option.

Under the contract, the company will provide research operations and support services to the U.S. Air Force Research Laboratory (AFRL) at Edwards Air Force Base (AFB), Calif.  Jacobs is a premier provider of advanced engineering and technical support at AFRL headquarters and 10 directorates spread across 26 locations.

Jacobs had earlier received a contract from United Utilities, for providing AMP5 topographical and utility surveying services. The agreement is valued at approximately $2.5 to $3 million. The total period of the contract is six years, with a four year base contract period and a two-year extension option related to performance.

The company will offer a range of technical services, which includes topographical, hydrographical and measured building surveys, utility location and mapping, 3D laser scanning surveys, deformation monitoring, GPS network design and production of high specification 3D model drawings.

California-based Jacobs Engineering is one of the leading providers of professional, technical and construction services to industrial, commercial and governmental clients. The company provides its services through offices and subsidiaries located principally in North America, Europe, Asia and Australia.

The company’s services are offered in four areas: Construction Services, Project Services, Operations and Management, and Process, Scientific and Systems consulting.

Jacobs operates in a highly-competitive business. Its immediate competitors include Fluor Corporation (FLR – Analyst Report) and Foster Wheeler AG (FWLT – Analyst Report).

View the original article here

A leading designer, developer and manufacturer of gaming machines and systems products, including online and mobile gaming solutions, International Game Technology (IGT – Analyst Report) will showcase its latest upcoming games and systems at the Indian Gaming 2011 Tradeshow and Convention from April 3 to 6 in Phoenix, Arizona.

IGT will exhibit a number of games from the MegaJackpot and Core game product lines in the show. This includes the second edition of IGT’s popular slot machine game Sex and the City.

Based on the hit television series from HBO, the newest edition is known as Sex and the City Big Diamonds and features IGT’s top performing MultiPLAY game interface. In the latest version of the game, players have the option of playing the game up to four times, simultaneously, with different outcomes on the same machine. The latest edition also features five progressive bonus levels and four character-specific bonuses.

The original version of the game gained huge popularity and was ranked #1 among all stand-alone progressive MegaJackpot games on casino floors in 2010. We believe the new version will also achieve strong growth going forward.

IGT is expected to launch a Ghostbusters slot at the Indian gaming show 2011. The newest member of the MegaJackpot family features high-frequency bonuses, which gamers can achieve by putting low denomination bets.

IGT will showcase a new game known as Wheel of Fortune Triple Extreme Spin at the event. A first of its kind, the game features three physical spinning wheels in the top box. The game also features a three-game MultiPLAY interface with IGT’s Rapid Reload feature, which locks in symbols and re-spins the reels for bigger wins.

IGT is also expected to release a Pinball MultiPLAY game, with special features targeted at mid and high denomination players.

The other important products include Megabucks Wild Sapphires, a latest addition to the Megabuck family of games. Also joining the family is Bill Cash, a popular slot from the Top Dollar Reel MultiPLAY Slots. The jackpot, ranging from $1.0 million to $10.0 million depending on jurisdiction, is expected to drive significant customer base due to its high prize amount.

From its core game product line, IGT will display the new skill-based Reel Edge series at the show. For the first time, gamers will be able to stop the spinning reels in an attempt to win and can also use a joystick to control the outcome of the 100% skill-based bonuses in the top box. Being a skill-based game; Reel Edge is expected to be popular with the younger generation (age group 21 to 44).

IGT is scheduled to introduce the new Multi-Color Multipliers, which integrates colourful reel lighting, entertaining music and LCD interaction into one platform and is available for four games, including Hells Bells, White Pearl, Hawaiian Diamond and Tiki Beach. During each spin of the game, the Multi-Color Multipliers light up the reels in red, green, blue or white, and multiply wins up to 4 times depending on which color is lit.

The company is also expected to display a new technology for casino management by combining sbX Experience Management system with IGT Advantage.

sbX is the first server-based gaming solution that allows its operators to run their own choice of games any time and facilitates better management of the casino floor at a lower operational cost. sbX also provides the same amount of comfort to players, allowing them to select their own choice of games instantly and experience a more real-life feel of casino management.

sbX has multiple tools, which spices up the entire gaming experience. sbX Service Window provides unique player interaction experience at the slot machine. The window provides a menu of information and services that the player and operator can optimize. sbX Floor Manager allows access to the IGT game library, enabling operators to efficiently mange their casino floor with the mere touch of a button.

We believe sbX will drive growth for IGT, as the company continues to install the system both domestically and internationally. We believe that the broadening customer base will boost IGT’s top-line growth over the long term.

IGT is also expected to display innovative online and mobile gaming products at the Indian gaming show 2011. IGT recently formed a new interactive division by merging WagerWorks and Million-2-1 groups in order to maintain its dominant position in the online and mobile industry over the long term.

Recommendation  

We maintain our Neutral rating over the long term (6-12 months). We believe IGT is focused on reducing its dependence on the domestic machine replacement cycle.

We consider this a prudent strategy as it brings consistency in top-line growth and increases earnings visibility going forward. The current product pipeline reflects strong growth expectations from non-machine revenues in systems; intellectual property and new games/software.

However, top-line growth remains elusive and we believe that lack of visibility on replacement sales, very few new openings and increasing competition, especially from Scientific Games Corp. (SGMS – Analyst Report) will remain primary growth headwinds for 2011.

Currently, International Game Technology has a Zacks #4 Rank, which implies a Sell rating on a short-term basis.

View the original article here

Stocks spent most of the session seesawing around the flat-line today, as light volume, technical resistance, and a semiconductor-related retreat limited enthusiasm over merger-and-acquisition activity. More specifically, while Pfizer (PFE) and Molycorp (MCP) both made M&A waves into the black, Intel Corp. (INTC) and its industry peers wallowed in the red on news of depleting chip sales. Against this wishy-washy backdrop, and with a lack of economic- or earnings-related catalysts to tip the proverbial scales, the Nasdaq Composite (COMP) and S&P 500 Index (SPX) both ended within a point of breakeven. Meanwhile, the Dow Jones Industrial Average (DJIA) proved to be the winner of the day, notching a close above 12,400 for the first time in almost three years.

The Dow Jones Industrial Average (DJIA ? 12,400.03) tacked on 23.3 points, or 0.2%, to end north of 12,400 for the first time since June 5, 2008. Twenty of the Dow’s 30 components ended higher, led by Johnson & Johnson (JNJ) and Wal-Mart Stores (WMT), while tech titans Hewlett-Packard (HPQ) and Intel paced the 10 declining equities with losses of more than 1% apiece.

Meanwhile, the S&P 500 Index (SPX ? 1,332.87) eked out a modest gain of 0.5 point, or 0.03%, in late-session trading, but continues to stare up at 1,333 — double its March 2009 low. Finally, the Nasdaq Composite (COMP ? 2,789.19) ended with a similarly modest loss of 0.4 point, or 0.01%, snapping its four-session winning streak.

Turning to equities in focus, Wells Fargo said Deutsche Boerse is unlikely to up the ante for NYSE Euronext (NYX) … Southwest Airlines (LUV) is facing headwinds after grounding a fleet of damaged jets … SunTrust Banks (STI) and Ford Motor (F) scored analyst endorsements ahead of the bell … NetApp Inc. (NTAP) and Riverbed Technology (RVBD) were favorites among the call-trading crowd … Long-term put players pounced on Office Depot (ODP) in the wake of tax-related earnings issues … and today’s Quote of the Day comes from Seth Meyers. Over the weekend, the Saturday Night Live Weekend Update anchor said that aside from Friday’s stronger-than-anticipated payrolls report, the cast of Celebrity Apprentice is also a positive indicator for the economy, stating:

“You know that things have to be going pretty well when even Gary Busey is working.”

But these weren’t the only headlines hitting the Street today. Click on the links below for our blog coverage of:

And, in case you missed it, Senior Technical Strategist Ryan Detrick stopped by CNBC’s “Squawk on the Street” to tout small-caps over their big-cap counterparts. Click here to watch the video.

For today’s activity in crude oil, gold futures, options, and more, turn to page 2.

Crude futures ended at a 2.5-year acme today, as escalating tension in Libya and among its neighbors exacerbated fears of prolonged supply disruptions. Most notably, political unrest in Yemen, heated protests in Algeria, reports of a government crackdown on the media in Bahrain, and a delayed election in Nigeria helped May-dated crude oil futures to a gain of 53 cents, or 0.5%, to end at $108.47 per barrel — black gold’s highest settlement price since September 2008.

Gold futures also powered higher today, as escalating oil prices stoked fears of inflation. Furthermore, expectations for a rate hike from the European Central Bank (ECB) later this week amplified the malleable metal’s appeal as an inflationary hedge. By the close, June-dated gold futures advanced $4.10, or 0.3%, to end at $1,433.00 an ounce. Elsewhere, the front-month silver contract ended at $38.494 an ounce — the front-month contract’s loftiest finish since February 1980.

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Andrea Kramer (akramer@sir-inc.com)

Limited Brands, Inc. (LTD – 33.29) is slated to release its March sales figures bright and early on Thursday. Ahead of the event, the retailer has powered modestly higher today — and it appears one investor may be protecting her position by “marrying” the stock with puts.

Just before midday, a block of more than 2,200 August 31 puts changed hands on open interest of fewer than 1,600 contracts, hinting at the initiation of new positions. However, while the block was tagged “spread,” we have yet to find a correlating options trade. Assuming the out-of-the-money puts were purchased to open, we could be witnessing the creation of a protective put position.

By purchasing 31-strike puts, the stockholder is essentially locking in an appealing sale price for her LTD stake, should the shares retreat over the next few months. For instance, let’s assume LTD backpedals to the $29 level in the wake of lackluster monthly sales figures. In this instance, the shareholder can exercise those 31-strike puts — meaning she can sell her shares for $31 apiece, rather than the $29 she’d receive from unloading her stake at Street value.

While the longer-term puts cost the trader $1.85 a pop, the “insurance” they provide — like any other form of insurance — allows the investor to rest a little easier at night. In other words, the trader is a shareholder first and an options player second, meaning she still wants LTD to barrel higher in the long run, but is hedging her bets just in case.

At last check, LTD has advanced 0.8% to flirt with the $33.29 level.

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Natural gas is enjoying its moment in the sun, after President Obama earlier this week vowed to reduce the country’s dependence on foreign oil imports. Many traders are expecting natural gas to be the logical beneficiary of this shift away from the Middle East’s much-coveted light, sweet crude oil — but which sector players are truly poised to impress? Read on for a closer look at the contrarian prospects for Anadarko Petroleum Corporation (APC – 83.33), Chesapeake Energy Corporation (CHK – 33.50), and Devon Energy Corporation (DVN – 92.28).

Anadarko Petroleum (APC)

Texas-based APC has one foot in the oil business, and the other in natural gas. The shares have notched a year-to-date gain of 7.6%, roughly keeping pace with the broader equities market — but this relatively modest number doesn’t really do justice to the stock’s intermediate-term uptrend.

Since the start of September 2010, APC has blazed a steady path higher, boosted by double-barreled support at its rising 10-week and 20-week moving averages. In the intervening months, the stock has rallied an impressive 81%, and hasn’t suffered a single weekly close beneath this trendline duo. In the process, APC has also found a firm foothold north of the round-number $80 region.

Despite APC’s stellar price action, plenty of skepticism continues to surround the stock. During the past 10 trading days, speculators on the International Securities Exchange (ISE) have bought to open 2.10 puts for every call on the equity. This ratio ranks above 98.8% of comparable readings taken during the previous year, as options players have rarely shown a greater appetite for puts over calls.

Likewise, Zacks reports that 12 out of 28 analysts maintain a middling “buy” rating on APC, leaving ample room for potential upgrades as the stock extends its positive price trend.

Traders hoping to take advantage of a continued trek higher from APC should consider the stock’s May 80 call.

Chesapeake Energy (CHK)

Based out of Oklahoma City, Okla., CHK is the reigning giant of the natural gas industry. The stock has definitely impressed on the charts in 2011, adding more than 29% since the beginning of the year.

Taking a closer look, CHK has bounced consistently higher since early December, with support from the security’s 20-day and 40-day moving averages containing a few recent pullbacks. The stock has recently been consolidating some gains beneath the $35 level, but could be poised for a breakout during the short term.

As with APC, there’s plenty of room for bulls on CHK’s bandwagon. Short interest on the stock dipped by 4.3% during the most recent reporting period, but these bearish bets still account for a respectable 3.7% of the security’s float. During the near term, a continuation of this short-covering trend could translate to additional upside for the shares.

Likewise, CHK’s Schaeffer’s put/call open interest ratio (SOIR) arrives at 0.99, which ranks in the 92nd percentile of its annual range — just eight percentage points from a pessimistic peak. As CHK capitalizes on trendline support to embark on the next leg of its uptrend, some of the weaker bearish hands will likely be hitting the exits.

Traders who believe CHK’s rally still has the legs to run higher may want to consider the security’s May 30 call.

Devon Energy (DVN)

DVN, another Oklahoma City resident, also has interests in both oil and gas. The shares managed a major technical victory in early 2011 by wrapping up January on the north side of the $80 level, marking the stock’s first monthly finish above this round-number neighborhood since October 2008.

In fact, since late September 2010, DVN has marched consistently higher along the unflagging support of its 10-week moving average. This trendline has ushered the stock to a gain of nearly 17% year-to-date, and recently helped DVN establish a perch above another key round-number level — the $90 region.

However, the bears simply aren’t buying DVN’s rally. Short interest on the commodity concern climbed by 6.2% during the past month, and now represents 1.7% of the stock’s float. The equity’s ability to keep rising amid this steady influx of selling pressure points to deep-seated technical strength.

There’s also room for sentiment to improve among options traders. DVN’s SOIR of 0.94 arrives in the 86th percentile of its annual range, implying that near-term speculators have been more put-heavy only 14% of the time during the past year.

In fact, the April 90 and May 90 strikes are the most popular puts in their respective series, with 7,307 and 6,339 contracts in residence, respectively. During the near term, these heavy out-of-the-money open interest accumulations could provide options-related support for DVN.

Traders looking to bank on more near-term gains for DVN may want to consider the stock’s May 90 call.

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