The shares of Sprint Nextel are hovering around breakeven this morning, despite a Wachovia upgrade from market perform to outperform. The broker believes that Sprint which recently ousted CEO Gary Forsee has the ability to stage a sustainable turnaround in subscriber growth within the next 6 months. In a note, Wachovia stated, ...we think Sprint-Nextel will break even in the first quarter and achieve positive sustainable postpaid subscriber growth starting in the second quarter of 2008. The broker also noted that sentiment can't get much worse toward the shares.

Despite Wachovia's belief, it does seem that there's still room for more bears to pile on Sprint Nextel. Short interest on the underperforming stock actually declined during the most recent reporting period, and accounts for just 1.7% of the stock's available float. Additionally, while Sprint's Schaeffer's put/call open interest ratio rests just 8 percentage points away from an annual peak, the reading of 0.77 indicates that calls still outnumber puts among near-term options. The stock's failure to post any significant gains in the wake of an analyst upgrade may also indicate that investors aren't ready to change their opinion on the firm just yet.

The equity must also face some technical hurdles before it can rally higher, compounding the fundamental pressure it's already feeling. Sprint's 10-week and 20-week moving averages recently completed a bearish cross a negative technical indicator and their daily and monthly counterparts are now poised to do the same.