Schaeffer's "Behind the Headlines" Highlights the Following Stocks: U.S. Airways, Alaska Air Group, ArvinMeritor, and Continental Airlines

Business Wire, Nov 15, 2006

CINCINNATI -- Today's "Behind the Headlines" from Schaeffer's Investment Research focuses on U.S. Airways (NYSE:LCC), Alaska Air Group (NYSE:ALK), ArvinMeritor (NYSE:ARM), and Continental Airlines (NYSE:CAL). "Behind the Headlines" is a report that analyzes newsworthy stocks that are generating a lot of attention on Wall Street. "Behind the Headlines" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

Take advantage of the timely Schaeffer commentaries by signing up for their free e-newsletters -- Opening View, Market Recap, and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day and get entered to win an iPod Nano. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROAW13M&PAGE=1.

Behind the Headlines:

Alaska Air Group: The airline sector is soaring higher today on news that U.S. Airways (NYSE:LCC) has offered to buy its rival Delta Air Lines (DALRQ) for $8 billion in cash and stock. Delta, which is currently embroiled in Chapter-11 bankruptcy proceedings, has twice rejected a partnership offer. The deal, should it be approved this time around, would give Delta creditors $4 billion in cash and 78.5 million shares of LCC stock.

Alaska Air Group (NYSE:ALK) is just one component of the group benefiting from the potential consolidation news. The equity is up 5.6 percent this afternoon, breaking through former resistance in the 42 region. However, today isn't the start of the stock's uptrend. The equity has gained roughly 23 percent since the start of 2006 and is up 187 percent from its March 2003 low. The equity has rallied steadily along its 10-month and 20-month moving average since September 2004.

Despite the security's uptrend, short sellers have yet to be completely shaken from their bearish bets. With more than five percent of the security's float still sold short, the stock could still benefit from some short-covering support. It is also encouraging that the shares gained ground while oil prices rallied, underscoring the long-term strength in the equity.

Click the following link to see a Daily Chart of ALK since July 2006:

http://www.schaeffersresearch.com/wire?ID=17741 .

ArvinMeritor: Sticking with transportation-related equities, ArvinMeritor (NYSE:ARM) reported earnings last night that were in line with expectations, gave a fiscal 2007 earnings guidance that was above the Street's average estimate, and announced a new restructuring program.

Technically speaking, the stock gapped sharply higher on the open and is currently tangling with some chart congestion in the 17.50 region. This area has served as resistance in the past and is working to slow up the shares today.

However, from a longer-term perspective, the stock has jumped above resistance at a declining trendline connecting a series of lower highs created by ARM going back to April 2002. This breakout could signal the end of the equity's long-term downtrend.

Short sellers could also help fuel the stock's uptrend. While a small portion of the 13.7 million shorted ARM shares are most likely due to arbitrage positions related to the stock's convertible bond, it appears there is still enough left over to supply the stock with some short-covering support.

Click the following link to see a Daily Chart of ARM since April 2006:

http://www.schaeffersresearch.com/wire?ID=17741 .

Continental Airlines: Returning to airlines, Continental Airlines (NYSE:CAL) is putting in a solid session this afternoon following the Delta news. The stock is currently up more than nine percent, tagging a new 52-week high. The equity has rallied steadily higher along its 20-day moving average since late August.

From a long-term perspective, the security has been grinding higher along its 10-month trendline since November 2004. During this time frame, the equity has logged only one monthly finish below this moving average.

From a sentiment perspective, there is still ample room for optimism to grow. Out-of-the-money call open interest among the front three months of options is relatively light, indicating that options players don't currently have high expectations for the shares. Furthermore, the stock carries a short-interest ratio of 4.4 days to cover. As investors continue to jump on CAL's bandwagon, the stock could reach new heights.

Click the following link to see a Daily Chart of CAL since August 2006 with 20-Day Moving Average:

http://www.schaeffersresearch.com/wire?ID=17741 .

The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day and get entered to win an iPod Nano. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROAW13M&PAGE=1 .

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 .