TiVo shares in the minute before the closing bell are trading down 5.5% at $7.70 on over 10 million shares right at the 4PM Closing Bell, which is mostly from the headline effect of the last five or six minutes.  DISH shares closed up unofficially by 0.25% at $19.97 and SATS shares closed up unofficially by 1.1% at $20.50.  It seems that almost all hope for TiVo had eswcaped based on its poor performance and shares hitting a new 52-week low today.

TiVo offered the following statement on the United States Patent and Trademark Office (PTO) decision.

“While TiVo is disappointed with this recent PTO office action, this is just one of several steps in the review process. We will continue to work with the PTO to explain the validity of the claims under review. It is important to note that TiVo received a “final action” holding several claims invalid during EchoStar’s first reexamination request at this juncture only to have the PTO ultimately uphold the validity of all claims of the patent.

Moreover, the PTO proceeding is separate and apart from the ongoing litigation against EchoStar and does not impact the current United States Court of Appeals en banc review of the district court’s finding of contempt against EchoStar and the related injunction.”

DISH Network L.L.C., a subsidiary of DISH Network Corporation (Nasdaq:DISH – News), and EchoStar Technologies L.L.C., a subsidiary of EchoStar Corporation (Nasdaq: SATS) made the following statements:

“We are pleased the Patent and Trademark Office issued a Final Office Action maintaining its rejection of the software claims of TiVo’s patent. These software claims are the same claims that EchoStar was found to have infringed in the contempt ruling now pending for en banc review by the Federal Circuit. In the Final Office Action, three examiners of the PTO considered TiVo’s response and, in a detailed 32-page decision, finally concluded that the software claims were unpatentable in view of two prior art references.”

JON C. OGG

Shares went from roughly $18.00 down over 41% to close at $10.16 Friday on more than 57 million shares.  This takes TIVO stock almost right where it was before its huge pop-up on winning the patent case in the first place.

As you can see on the chart here from StockCharts.com, you can forget about the key 50-day and 200-day moving averages offering much of anything.  If there is any takeaway in the moving averages, it is only that the 200-day at $11.97 (which will change each day) matters for resistance.  The 50-day average did not even have 50 sessions at the higher prices, explaining why the line goes straight up.

If you go back a year, it is $11.00 that had been the big pivot point and the hard line of resistance back before it won the patent case the first time around.  Above that was a resistance of $12.00, which coincides with the 200-day average right now.  That 200-day average will likely come down over a nickel a day this week and will then start to bleed off closer to 3 cents a day for another week or so.

As far as support, $10.00 had been a longer-term pivot level for support before its significant pop-up earlier this year.  Then there is a lower level of $8.60 to $9.05, which would be a harder support level than $10.00.  So, on downdrafts, S1- $10.00; S2 $9.05; S3- $8.65…

As far as RSI, stochastics, and MACD ar e concerned, you can probably throw those out the window for at least the next two weeks while this stock finds its own trading range.

As far as stock options, we almost always like to see just what the real volatility traders are pricing in for straddles.  It is almost always too expensive to buy both the PUT and CALL at the closest strike price, but we are looking at the $10 straddle for both MAY. The MAY $10 strike was $0.75 for the CALL and appears to be $0.57 for the PUTS.  With $0.16 of intrinsic value, TiVo stock still would have to rise above $11.32 or go down under $8.68 in the next week for the volatility to trade in MAY to make money.

As far as analyst calls yesterday, Lazard did cut the stock to HOLD from BUY.

An appeals court did set aside TiOo’s previous win against Dish Network Corp. (NASDAQ: DISH) and EchoStar Corp. (NASDAQ: SATS) in the patent case for digital video recorders.  It looks as though the federal circuit court for the U.S. Court of Appeals will review its own March decision.  Dish and EchoStar had changed the DVR technology to avoid infringing on the patents, but the court had ruled that the devices still used TiVo’s technology.  $300 million or more in past damage awards hangs in the balance.

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JON C. OGG

• 08:37      $21.0797      4,000,000
• 08:36      $21.08        4,000,000

Shares closed at $21.08 yesterday and its 52-week range is $8.79 to $22.18.  We will likely not be following up on this trade unless there is more action or more clarity.

JON C. OGG

The U.S. Court of Appeals for the Federal Circuit issued a stay on an injunction that would have kept Dish customers from using their digital video recorders while the patent case was ongoing.

Tivo asserted today that it would ultimately win in court.

A federal court last month rejected Dish Networks’ argument that it created a workaround that did not violate Tivo patents. A that time, Tivo was awarded $103 million, in addition ota previous $105 million payment made a year ago. — Mike Tarsala