Option Investor
Newsletter

Daily Newsletter, Sunday, 03/07/1999

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The Option Investor Newsletter            Sunday  3-7-99  1 of 6
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

Posted online for subscribers at http://www.OptionInvestor.com

Published three times weekly, Sunday, Tuesday, Thursday evenings.
New plays and market wrap updated daily on the website. 
******************************************************************
Entire newsletter best viewed in COURIER 10 font for alignment
******************************************************************
MARKET STATS FOR LAST WEEK AND PRIOR WEEKS
******************************************************************
        WE 3-5           WE 2-26          WE 2-19          WE 2-12
DOW     9736.08 +429.50  9306.58 - 33.37  9339.95 + 65.06  - 29.35  
Nasdaq  2337.11 + 49.08  2288.03 +  4.43  2283.60 - 38.29  - 51.73  
S&P-100  638.99 + 20.57   618.42 -  1.85   620.27 +  4.13  -  1.53  
S&P-500 1275.47 + 37.14  1238.33 -   .86  1239.19 +  9.06  -  9.27  
RUT      398.01 +  5.75   392.26 -   .04   392.30 -  6.14  - 14.28  
TRAN    3312.79 +105.36  3207.43 + 72.92  3134.51 + 37.62  -150.77  
VIX       25.12            29.52            30.23            31.35
Put/Call    .61              .67              .70              .85
******************************************************************

Breakout !! Is this for real or is it just another spike out of
the trading range?


Again, only time will tell but this one looks like it might have
some staying power. Strong volume, strong advance declines, good
press, maybe it is too good to be true. The bullish/bearish 
indicator from Investors Intelligence was just breaking back
down into a comfortable range with bears gaining ground on the
bulls. If the bullishness returns too fast then we could see
ourselves back in the trading range very quickly. 

It was hard to find a bear on Friday after the tame jobs report
gave the green light to fund managers to jump back into the 
market. The Dow had its biggest two-day point gain ever this
past week and the best weekly total since 1987. After breaking
the previous high on Friday the focus is clearly on 10,000 and
we are only a mere 264 points away. This should be easily
attainable this week if we can just hold the high ground on
Monday. We will eventually be faced with the law of gravity
reasserting itself. Every big move (460 points) will always 
be followed by a corresponding opposite move. The three steps 
forward, two steps backward theory. The market will cycle. 
Nothing goes up in a straight line. With all the positive 
momentum the next likely cycle point could be 10,000. Once 
broken there could be a pause to regroup and the necessary 
consolidation period. Remember the -1500 point drop after we
broke 9,000, the -1000 point drop after we broke 8,000, -600
after 7,000. Should 10,000 be any different? Just four years
ago last month we were trading in the upper 3,000 range. Scary
isn't it!

Many still suggest that the igniting spark for the rally was the
Dell/IBM deal and then the Intel/Level One transaction fanned the
flame. The sign that techs were not dead as many were claiming 
was a welcome relief to investors. The economic catalyst of course
was the tame jobs report showing unemployment actually climbed
in February. More people out of work is good for the market
since it means inflation in employee earnings is under control.
Alan Greenspan must be breathing a sigh of relief that there is
no reason to raise rates immediately. With Brazil heating up
again there is always the worry that a Fed action to slow the
economy could be followed by Brazil failure. That could be a 
combination knockout punch to the U.S. markets. 

The dynamics of the rally were good with multiple leadership
sectors. Banks, brokerages, techs, consumer goods, retail, 
all were solidly higher. The bond market which had been under 
pressure recently closed Friday with interest rates at 5.6%. 
The threat of higher rates seems to be easing. The bull rally 
has been built on low interest rates and recent bond depression 
had been threatening that building block.

The Dow is now up +6% for the year but almost 5% of that came in
the last week. Other indexes are far from their highs. The Russell
2000 at 398 is almost -8.5% off its high for the year of 435. The
Nasdaq at 2337 is -7.7% off its high of 2533. In spite of the 
euphoria of last week we still have a case of blue chips leading
and the broader market trailing reluctantly. Until we see a new
trend of advancers constantly beating decliners we will be skeptical
of the recent gains. We did not say we are not enjoying them, just
that we continue to be cautious here.

The rash of analysts recommending investors put more money into
stocks because of the improved economic outlook was lead by Peter
Canelo at Morgan Stanley. He upped is recommendations to %70 stocks
from 65%. The U.S. continues to be the oasis of prosperity and
has been known recently as the "Goldilocks economy". This phrase
refers the popular children's story in which Goldilocks prefers
the Baby Bear's porridge because it is not too hot or too cold.
We are continuing to tread that thin line and until we deviate
from this pattern the wheels should not come off the Wild Bull
Express.

In stock news Dell Computer pulled another rabbit out of the 
hat last week with the announcement of Gigabuys.com. The new
site expands Dell's marketing capability to everything computer
related, not just computers any more. The 25 million weekly
website visitors to Dells site now can purchase anything they
need to complete their system. Printers, software, modems, 
networking cards and add-ons galore can be added to one shopping
cart. Just another Michael Dell marketing win. Now it won't be
average selling price and the number of units analysts focus on
but an entirely new retail focus. What PE do Internet retailers
command these days? You got it! Astronomical. We did not pick
Dell as a play this weekend due to the split but as soon as we
feel the possible post split depression has ceased we will be
back on them strong. Since Dell has not had a normal split run
we would not be surprised to see it take off when the gate opens
on Monday morning. Using our normal cautious stance we would
like to see the market dip from the +450 points last week to
provide us a cheaper entry point for this play.

The web stocks seem to be diverging from the sector wide 
upward move of late. CMGI, XCIT and EBAY continue to
tack on big numbers but noteable exceptions are LCOS, SEEK,
AOL, EGRP, AMZN, EGGS, MSPG and company. They either lost
ground last week or barely broke even. Analysts say there is
some strong insider selling as the lockout periods are starting
to expire. YHOO would have finished the week negative except
for the upgrade received Friday. Could we also be seeing an
end to sky high valuations just because there is a .com on 
their names? I personally think it is just a consolidation
period as each stock tries to find its own level in an
industry that changes weekly. If you play Internets we suggest
caution until a real trend develops in the stock you pick.

Should you jump in with both feet on Monday? I would suggest
not. I, for one, would wait for the next obligatory pullback
in the market. This can occur intraday as well. If we blast
off at the open Monday then Tuesday would be my bet for a
rest. The economic calendar is full next week and investors
will be focusing on the next market hurdle. Lately the minor
reports have been ignored but they will continue wanting
confirmation as the market progresses.

Wait for an entry point! Sell too soon!


Jim Brown
Head Huckster

PS: We have many new free trials this weekend courtesy of Barrons.
Welcome to OIN! We hope you will find our service as educational
and profitable as our existing subscribers have. 





*****************************************************
JIM'S PLAYS		 
*****************************************************
Regretfully still no trades due to seminar this week.
I missed a great run. Hope you did not miss it as well.

Current positions: 

GADZ - takeover rumor







*********************************************************
Market Sentiment - By Pinnacle Capital Advisors
*********************************************************

It's Still about Corporate Profits

Although the broad market got a big boost from February's 
favorable employment report, you might want to check out the
latest estimates for corporate profits.  Wall street estimates
for 1Q99 profits have been coming down recently according to
First Call.  The projection is for a 6.8% rise in S&P 500
profits, down from an estimate of 9.3% a month ago.  As we have
learned over the past couple of years, the reduction of earning
estimates can actually have a positive impact once as companies
come in ABOVE these lowered expectations.  But at some point,
soft earnings will catch up to the market's valuation.  The S&P

500 has returned over 20% for an unprecedented four straight
years and now trades at a record 26 times projected earnings for
the year.  Wow!

In addition to corporate earnings, keep an eye on the S&P 500
Index, small-cap stocks and the Transportation sector over the
next couple of days to confirm the DOW breakout.  Remember, it's
one thing to get 30 blue-chip stocks airborne, its another to
get the S&P 500 and the Russell 2000 stocks off the ground.  And
if you are a DOW theorist, the market is not likely to sour
without the Transports.



Separately, Pinnacle has been tracking the Market Volatility 
Index (VIX) closely as an early clue as to where the market is
likely to head. On Friday (3/5), the VIX broke below a key 
benchmark and closed at 25.12.  This is a bullish development
if the VIX can continue to stay BELOW its 50-day moving
average.  But all it takes is one major earnings warning and
the VIX will be above 30% in a New York second. 



Market Sentiment at a Glance
********************************************************************   
                                Friday      Tues     Thurs  
Indicator                       (3/5)      (3/9)     (3/11)  Alert
********************************************************************

Pinnacle Index (OEX):          
-----------------------------------------------------------------
Overhead Resistance (640-655)    10.4
Underlying Support  (605-620)     1.4


Put/Call Ratios:
-----------------------------------------------------------------
CBOE Total P/C Ratio               .6
CBOE Equity P/C Ratio              .4                           *   
OEX P/C Ratio                     1.1                           *                


Peak Open Interest (OEX):
-----------------------------------------------------------------
Puts                              560
Calls                             620
P/C Ratio                         1.2


Market Volatility Index (VIX):	
-----------------------------------------------------------------
CBOE VIX                         25.12   *



Investors Intelligence:
-----------------------------------------------------------------
Bullish                          50.9%   *  
Bearish                          32.1%   *
		



The Power of Sentiment Analysis

It has often been said that the crowd is right during the
market trends but wrong at both ends.  Measuring and
evaluating the sentiment of the crowd, therefore, can give
savvy option traders a decided edge.

 
Pinnacle Index
-----------------------------------------------------------------
OEX                             Friday     Tues      Thurs
Benchmark                        (3/5)     (3/9)     (3/11)
-----------------------------------------------------------------
               
                    (650-655)     11.5
                    (640-645)      9.4
Overhead Resistance (640-655)     10.4

OEX Close                       638.99

Underlying Support  (605-620)      1.4
                    (615-620)      1.0
                    (605-610)      2.3

Average ratings: 
Resistance levels 2.0 / Support .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is heavy at the OEX 640/655
level while the underlying support is firm at the
OEX 605/620 level.


Put/Call Ratio 
-----------------------------------------------------------------
                                Friday      Tues     Thurs
Strike/Contracts                 (3/5)     (3/9)     (3/11) 
-----------------------------------------------------------------
CBOE Total P/C Ratio               .66
CBOE Equity P/C Ratio              .42
OEX P/C Ratio                     1.18


Peak Open Interest (OEX)
-----------------------------------------------------------------
                     Friday         Tues           Thurs
Strike/Contracts     (3/5)          (3/9)          (3/11)
-----------------------------------------------------------------
Puts                 560 / 13,016
Calls                620 / 10,879
Put/Call Ratio       1.20

 



Market Volatility Index (VIX)
-----------------------------------------------------------------
                    Major
Date                Turning Point       VIX
-----------------------------------------------------------------
October 97          Bottom              54.60      
July 20, 1998       Top                 16.88         
October 8, 1998     Bottom              60.63
January 11, 1998    Top                 26.38
March 4, 1999       Bottom ?            28.15   

March 5, 1999                           25.12   *


 
 
 


Investors Intelligence Survey
-----------------------------------------------------------------
                    Major             Percent     Percent
Date                Turning Point     Bullish     Bearish
-----------------------------------------------------------------
October 97          Bottom            22.0        48.3       
July 20, 1998       Top               52.0        24.0         
October 8, 1998     Bottom            38.5        42.7
January 11, 1999    Top               58.3        30.0
-----------------------------------------------------------------


January   6, 1999                     58.3        30.0   
January  13, 1999                     60.0        30.0   
January  20, 1999                     61.7        25.9   
January  27, 1999                     60.7        28.2   

February  3, 1999                     60.0        26.7   
February 10, 1999                     61.7        25.9   
February 17, 1999                     55.7        28.7   
February 24, 1999                     54.1        31.5   

March 3, 1999                         50.9        32.1   *



*********************************************************
Market Posture
*********************************************************

As of Market Close - Friday, March 5, 1999 

                   Key Benchmarks
Broad Market       Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************

DOW Industrials    9,200   9,500   9,736    BULLISH   3.5  *            
SPX S&P 500        1,225   1,280   1,275    Neutral   3.4    
OEX S&P 100          615     640     639    Neutral   3.4   
RUT Russell 2000     400     435     398    BEARISH   2.4    

NDX NASD 100       1,900   2,050   1,970    Neutral   3.4     
MSH High Tech        900   1,000     945    Neutral   3.5  *         

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         800     900     846    Neutral   3.5  *            
CWX Software         600     650     613    Neutral   3.5  *              
SOX Semiconductor    350     420     378    Neutral   3.5  *      
NWX Networking       400     450     427    Neutral   3.4              
INX Internet         450     570     507    Neutral   2.19       

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          650     675     689    BULLISH   3.5  *                  
XBD Brokerage        650     700     738    BULLISH   3.4        
IUX Insurance        600     625     629    BULLISH   3.5  *            

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           850     880     916    BULLISH   3.4      
DRG Drug             775     795     806    BULLISH   3.5  *     
HCX Healthcare       775     795     807    BULLISH   3.5  *              
XAL Airline          320     330     338    BULLISH   3.2   
OIX Oil & Gas        230     250     236    Neutral   3.4                     



Posture Alert

February's favorable employment report brought a sigh of 
relief and lifted the market to new heights turning us Bullish
across select industry sectors.  In addition, our Bearish
posture across certain Technology sectors has turned Neutral. 
Although the Dow closed in record territory, we want to
caution investors that broad market indices (S&P 100/500)
have yet to breakout and that the Russell 2000 and
Transportation indices are still under pressure.


A detailed description of our Market Posture and its
applications can be found at:

www.OptionInvestor.com/marketposture



 
*****************************************************
Coming Events
*****************************************************
Monday: 

None scheduled

Tuesday:

LJR Redbook       3/06     Forecast:  --     Previous:  1.8%
BTM/Schroeders    3/06     Forecast:  --     Previous:  1.2%
Non-Farm Product  Q4-1998  Forecast:  4.1%   Previous:  3.7%
API Oil Stocks    3/06     Forecast:  --     Previous: 326.75M
Unit Labor Costs  Q4-1998  Forecast: -0.7%   Previous: -0.2%
Wholesale Inventory Jan    Forecast:  0.2%   Previous:  0.5%
Richmond Fed Srvy   Feb    Forecast:  --     Previous:  1.8%

Wednesday:

None Scheduled

Thursday:

Jobless Claims    3/06     Forecast:  --     Previous: 286k 
Retail Sales       Feb     Forecast:  0.5%   Previous: 0.2%  
Retail Sales XAuto Feb     Forecast:  0.5%   Previous: 0.2%
Money Supply (M2) 3/01     Forecast:  --     Previous: $15.3B
Import Prices      Feb     Forecast:  --     Previous: 0.2%
Export Prices      Feb     Forecast:  --     Previous: unch
Current Account Gap Q4-98  Forecast: -$58.2B Previous: -$61.3B

Friday:

Producer Price Idx Feb     Forecast:  unch   Previous: 0.5%
PPI xFood/energy   Feb     Forecast:  0.1%   Previous:-0.1% 
Business Inventory Jan     Forecast:  0.2%   Previous: unch   
Atlanta Fed Index  Feb     Forecast:  --     Previous: 10.3 
Univ Mich Sentiment Mar    Forecast:  107.7  Previous: 108.1



*****************************************************
Last weeks change for this weeks picks:
*****************************************************
Index    Last   Week
Dow    9736.08 429.50 Profit taking soon
Nasdaq 2337.11  49.08
$OEX    638.99  20.58
$SPX   1275.47  37.14
$RUT    398.01   5.75
$TRAN  3312.79 105.36
$VIX     25.12  -4.40

Stock   Price   Week

CMGI    152.19 29.57 New all time highs!
RNWK     89.50 19.37 Internets are alive!
ANF      87.00 11.01 Possible Split Candidate
MCD      94.31  9.31 Dropped, split over
MER      85.56  8.82 Brokers are strong
MWD      98.94  8.44 Split Candidate
COF     135.81  8.19 Interest rate worries delayed
BCST     91.69  7.88 Internets are alive!
CL       92.56  7.68 New play, Split Candidate
HRB      51.63  7.25 New play, strong momentum
WMT      93.25  7.13 Announced its split for 4/19
SCH      81.00  6.44 Brokers are strong
SBUX     58.75  5.88 Splits 3/19
UTX     129.06  5.20 Dow reactive
PVN     107.13  5.00 Interest rate worries delayed
TJX      33.56  5.00 New play, strong momentum
MSFT    154.94  4.81 New play, 3 weeks to split!
MEDI     59.50  4.51 New price target of $70
PG       94.00  4.50 New play, broker resistance
SONE     69.38  3.76 Momentum play
CMA      69.75  3.51 Interest rate worries delayed
C        61.75  3.00 Interest rate worries delayed
NXLK     48.75  3.00 Dropped, Not performing
LOW      62.00  2.69 Rotation into Retail
EMC     104.56  2.18 Broke through resistance
PSIX     37.69  1.88 Dropped, Not performing
LGTO     50.56  1.30 Still climbing
WCOM     82.81  0.31 Dropped, Not performing
DLJ      56.25 -0.76 Dropped, Not performing

Puts

INTC    114.63 -5.31 Underperforming the market
CDWC     64.50 -5.13 New play, sales slowing?
RAD      38.50 -2.87 Losing marketshare?
BMCS     38.19 -2.69 Still breaking down
LHSG     40.69 -2.31 New play, On investors bad side?
SMS      49.44 -1.56 New play, Industry downgrade
BBY      92.00 -0.75 Slowing PC sales
WLA      68.63 -0.20 Below declining average
ELNK     60.06 -0.14 Rolling over
CB       61.56  1.56 Still under resistance
BDX      36.63  3.13 Dropped
TBH      68.00  3.38 New play, Brazilian worries again
VISX     84.63 22.88 New play, Too Far, Too Fast!


*****************************************************
REAL-TIME Stock an Option Quotes
*****************************************************
We are constantly asked for our recommendations for a 
real time quote service for stocks/options/futures/indexes etc. 

We have reviewed many and give our strongest recommendation
to Interquote. 

Their quotes are delivered in a fully customizable spreadsheet
format with over 20 different data fields available.

They offer tick by tick realtime, CONTINUOUSLY UPDATING, 
or delayed quotes for all exchanges.

If you are considering the volatile world of option trading 
you will find realtime option quotes from Interquote a 
valuable resource.

You can get a free trial from Interquote at this address.

http://www.interquote.com/


*****************************************************
HOW TO SUBSCRIBE
*****************************************************

We would like to have you as a subscriber. You may subscribe
at any time but your subscription will not start until your
free trial is over.

The monthly subscription price is $39.95
The quarterly price is $99.95 which is $20 off the monthly rate.

************************************************************

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and click on "subscribe" to use our secure credit 
card server.

You may also call us at 303-797-0200 and give us the 
information over the phone.

You may also fax the information to: 303-797-1333

*************************************************************
                      DISCLAIMER
*************************************************************
This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
a qualified professional before trading in any security. The 
information provided has been obtained from sources deemed 
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely 
information to its subscribers but cannot guarantee specific 
delivery times due to factors beyond our control.

The Option Investor Newsletter              3-7-99
Sunday                   2  of  6

**************************************
PICK SUMMARY
**************************************
SL  = Suggested stop loss. Sell if bid breaks this price.
OI  = Open Interest - the number of open contracts outstanding.
TP/P= True premium or Time premium
RRR = Risk/Reward/Ratio
ITM = In the money
ATM = At the money
OTM = Out of the money
MTD = Move to double - amount stock must move to double option price
                       in one week. ONE WEEK MOVE ONLY !

Numbers within ( ) are the amount of change for the week.
Numbers within ( ) may be designated with PxW, like P3W, prior 3 weeks

The options with a "*" by the strike price are our choices from the 
group. If the stock moves as expected we feel they have the best 
chance to substantially increase or double in price with the best
risk/reward ratio compared to the other options for the same stock.
You must determine if they fit your risk profile for time and price.

Analysts ratings: 1-2-3-4-5 
Analysts who follow each stock rate it and these rating are 
accumulated and displayed as follows;

Position 1 = number of analysts recommending "strong buy"
Position 2 = number of analysts recommending "moderate buy"
Position 3 = number of analysts recommending "hold" or "neutral"
Position 4 = number of analysts recommending "moderate sell"
Position 5 = number of analysts recommending "strong sell" 

Example rating 5-3-1-0-0 would be 5 "strong buys", 3 "moderate buys",
1 "hold" recommendation.


*****************************************
STOCKS ADDED TO THE PICK LIST
*****************************************

Calls

MSFT - Microsoft
PG   - Proctor & Gamble
HRB  - H&R Block
TJX  - TJX Companies
CL   - Colgate

Puts

SNC  - Snyder Communications
VISX - Visx, Inc
SMS  - Shared Medical Systems
LHSG - LHS Group
TBH  - Telebras
CDWC - CDW Computer Centers
INTU - Intuit

*****************************************
PICKS WE DROPPED THIS WEEK
*****************************************
Remember that historically, when we drop a pick it will go up 
10 to 15% the very next week. It is part of Murphy's Law.
Just because we drop a stock as a pick does not mean we are
advocating a "sell" on any position you have. We are simply
dropping our recommendation as a new play. Existing plays
can and do continue on and are usually profitable.
*****************************************

CALLS:

PSIX $37.69 +.19 (+1.88) We are dropping PSIX for lack 
of performance.  There are a lot of good plays out there and 
this one has lacked conviction in its move forward.  We 
expected much better gains then what we saw the last few 
days.  

WCOM $82.81 (+0.31)  The market put on a good performance 
last week, especially on Friday.  WCOM, however, couldn't 
hold its gain to keep pace with the market, and lacked 
volume.  It just isn't performing well, with $82 providing 
a strong barrier to advancement.  Sorry, WCOM; the ride is 
over for now.

NXLK $48.75 (+3.00) We're dropping NXLK as it closed down 
Friday -0.32 in an exploding market.  The stock did trade 
above $50 but was unable to hold even the slightest gains.  
These are not good indications to open a new position.  
Remember, DLJ did upgrade NXLK on Thursday to a "buy" and 
set a target price of $62 so keep your eye on this stock 
for a future play.  

DLJ $56.25 (-.75) Although the sector has been hot, DLJ sure 
cooled off this past week. While other brokers moved ahead, 
DLJ lagged behind and even lost ground. For those of you 
already in this stock, please note that DLJ advanced $1.00 
on Friday on 50% higher than average volume. This is a good 
sign and it is possible DLJ will play catch up next week. 
However, we don't feel good recommending it as a new play, 
so we are dropping it. 

MCD $94.31 (+9.31)  McDonald's split after the closing bell 
this past Friday, March 5th.  Since 7 out of 10 splitters 
suffer from post split depression, we have to drop MCD until 
it shows it can continue its incredible uptrend.  Since we 
picked it back on Feb. 7th, the stock has jumped 14 points- 
even through all of the ups and downs of the market.  It has 
a beautiful graph that exhibits exactly the kind of run we 
like to play and the strength that makes it a pick even in a 
volatile market.  We have no doubt that you'll be reading 
about this hamburger giant again soon in the Option Investor 
Newsletter!    



PUTS: 

BDX - $36.63 1.88 (3.13) Stock found support near the 
$33-34 price level and rallied nearly 2 points during
Friday's (3/5) record advance.  We are, therefore, 
dropping the stock until the stock breaks down again. 



***************************************
STOCK SPLIT CANDIDATES 
***************************************

WMT  - Wal-Mart  - Announced !
NOKA - Nokia
LXK  - Lexmark Intl Group Inc
VOD  - Vodaphone
MWD  - Dean Witter
CMGI - CMG Info
CL   - Colgate


*****************************************
STOCKS WITH UPCOMING SPLITS 
*****************************************
We don't list all splits available, only those we 
feel may have play possibilities. 

Symbol - Stock      Splits/Date  

DELL - Dell Computer   2:1 03-05-99 ex-date 03-08
CSGS - CSG Systems     2:1 03-05-99 ex-date 03-08
MCD  - McDonalds       2:1 03-05-99 ex-date 03-08 current play
MHP  - McGraw Hill     2:1 03-08-99 ex-date 03-09
XLNX - Xilinx Inc      2:1 03-11-99 ex-date 03-12
SBUX - Starbucks       2:1 03-19-99 ex-date 03-22 current play
NSOL - Network Solution2:1 03-23-99 ex-date 03-24
MSFT - Microsoft       2:1 03-26-99 ex-date 03-29 current play
LU   - Lucent          2:1 03-31-99 ex-date 04-01
SUNW - SunMicro        2:1 04-08-99 ex-date 04-09 play over $104
INTC - Intel           2:1 04-12-99 ex-date 04-13
EXDS - Exodus Comms    2:1 04-12-99 ex-date 04-13
WMT  - Walmart         2:1 04-19-99 ex-date 04-20 current play
IBM  - IBM             2:1 05-26-99 ex-date 05-27
EMC  - EMC Corp        2:1 05-28-99 ex-date 05-31 current play

For a complete list of all the coming splits check out the
"split calendar" on the side of the online edition newsletter
page.


***************************************************
SPECIAL SHORT TERM SPLIT PLAYS 

We always recommend selling the day of the actual 
split. Profit taking will drive down the price on an
average of 7 of 10 splitters immediately after the split.
They may come back in a week or two but why risk it ! 
*****************************************************
MSFT - Microsoft $154.94 (+4.81)(+2.38)(P3W -27.25)

Brought to you live from the DOJ, a reprieve from the trial 
until its resumption in April!  Thank Goodness!  The 
embarrassment Microsoft suffered in the defense phase of 
the trial took its toll on investors.  Without the smoke of 
the trial, the stock firmed and is moving slowly upward 
headed into its 2:1 split on March 26 -- 3 weeks away.  
Split run strength typically happens in the 2 weeks prior.  
Now is the time to scale in.  We offer March strikes this 
week only since they will expire the week before the split 
-- at least we get a nice piece of the trend.  April 
strikes will get you through the split and may be better 
suited depending on your risk profile.  The chart just 
turned positive.  Confirm market direction or target shoot 
before taking a position.

See plays in sector list.

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*****************************************************
SBUX - Starbucks Corp $58.75 (+5.87)(+4.50)

Starbucks is splitting 2:1 on March 19th.  The company has 
picked up momentum and added +$5.87 in this week's trading.  
Look for it to continue to perk up as we edge closer to the 
split date.  It is incredibly close to breaking its all time 
high of $59.94.  If the markets can continue to rally, they 
might provide the extra shot of caffeine needed to break that 
level.  Once it does, it will be in blue sky territory.  Make 
sure to set trailing stop losses to protect your profits.   

See plays in sector list:

Chart = http://quote.yahoo.com/q?s=sbux&d=3m
*****************************************************
(long term)
WMT - Wal-Mart $93.25 (+7.12)(+1.38)(P4W +.75)

On Thursday, 3-4, WMT announced a 2-for-1 stock split, a 29% 
increase in its dividend, and an expansion in its share 
repurchase program by $1.2 billion to $2 billion. What more 
could investors ask for? After an outstanding fourth quarter, 
Wal-Mart is continuing with strong numbers in the current 
quarter, too. February net sales were up 17.7% year over year. 
And same store sales increased 10.3% over last year. On 
Friday, 3-5, WMT set a new intra-day high of $94.25 and a 
new closing high of $93.25. Volume was nearly 3 times 
average. The stock splits April 19 for shareholders of 
record March 19. You can bet on this leader's strength. 
However, be prepared for possible profit taking.

See plays in sector list:

Chart = http://quote.yahoo.com/q?s=WMT&d=3m
*****************************************************
(long term)
EMC - EMC Corporation $104.56 (+2.19)(-1.56)(+1.56)(+4.88)

On Thursday we were discussing a congestion zone at $101.50 to
$102.50 that might prove to be some resistance for EMC.  EMC
jumped right over this congestion zone on Friday and closed
above it.  In discussing support and resistance, take a look at
EMC's chart and see how it bounced off of its 50 dma last week. 
It appears as though $105 could prove to be minor resistance
and we would look for support on EMC in the congestion zone
referred to above.  As indicated in the news paragraph below,
EMC may be hinting that its growth forecasts are too low.

See plays in sector list.

Chart = http://quote.yahoo.com/q?s=EMC&d=3m
*****************************************************

THE PLAY OF THE DAY -CALLS- ONLY PLAY IN RISING MARKET

*****************************************************
With all the great plays each week we can never decide
on just one so take your pick. 

*****************************************************
HRB - H&R Block $51.63 (+7.25)

On Thursday, HRB announced that tax preparation fees were
up over 21.5% over the same period last year.  They forsee
that this trend will continue, especially as we get closer
to the tax filing deadline.  HRB announced earnings on the
23rd of February that were an 82% surprise.  This also has
been a driving factor in the stock price.

See plays in sector detail.

Chart = http://quote.yahoo.com/q?s=HRB&d=3m
*****************************************************
CL - Colgate-Palmolive Co $92.56 (+7.68)

CL had an earnings run late January and found support at 
$83-84.  They reported a record year on 2-4 and posted 
.73 vs .63 for the 4Q.  Against probability, CL broke out 
again and but couldn't climb above the resistance at $87. 
Some consolidation occurred at the end of February hedging 
the stock back to its old support level.  Like a ball bouncing 
between a floor and ceiling so is the analogy for CL.  After 
the recent profit taking, CL is again taking off gaining 
steadily since Monday's open.  The market momentum on Friday 
pushed CL up another +2.18 points to have it close 5 points 
above its 10dma.

See plays in sector detail.

Chart = http://quote.yahoo.com/q?s=CL&D=3m



***************************************
Brokerage/Banking - Sector
***************************************
C - Citigroup $61.75 (+3.00)(+4.56)(+2.31)(P3W +0.25)

What do you get when you cross the largest credit card 
issuer and one of the largest insurance companies on the 
planet?  Citigroup, the largest financial services company 
in the world.  They offer investment services through 
Salomon Smith-Barney and Primerica, real estate services 
through Citicorp real estate, insurance through Travelers, 
not to mention consumer banking and credit cards through 
Citibank.  Sandy Weill and John Reed are co-CEO and co-
chairman of this $57 billion (sales) company

Most financials benefit from the supposition that 
international investing is producing better results than 
originally expected.  C is no exception, noting that their 
Brazilian results will be better than anticipated.  With 
Friday's positive unemployment news, Greenspan is not 
likely to raise rates any time soon; thus banks have a 
brighter future.  Friday's volume was strong indicating new 
interest in C, which helps explain their technically 
positive chart.  Support is $58; resistance, set intra-day 
Friday is $63.50.  Confirm market direction before playing.

No price moving news for C this week, however, in a top-25 
survey by Nelson's Research, C's Salomon Smith Barney 
division was ranked #4 in size with 247 analysts covering 
2639 companies. 

March Plays Expire in 2 Weeks!

BUY CALL MAR-55 C-CK OI=18306 at $7.25 SL=5.50 ITM
BUY CALL MAR-60 C-CL OI=21118 at $2.75 SL=1.25 
BUY CALL APR-60*C-DL OI= 4819 at $4.38 SL=2.75
BUY CALL APR-65 C-DM OI= 3545 at $1.75 SL=0.75
BUY CALL JUN-60 C-FL OI= 8785 at $6.38 SL=4.50

Picked on February 28 at $58.75       PE =24
Change since picked       +3.00       52 week high=73.50
Analysts Ratings     10-8-6-1-0       52 week low =28.50
Last Earnings 01/99 est .54  actual  .60 surprise +11.0%
Next Earnings 04-21 est .79  versus  .90
Average daily volume =   9.2 mln.
Chart = http://quote.yahoo.com/q?s=C&d=3m
*******************************************
COF - Capital One $135.81 (+8.18)(+3.75)(+2.07)(+6.37)

Capital One is a financial holding company for Capital One 
Bank F.S.B., one of the top 10 credit card companies in the 
US.  COF advertises to its Visa and MasterCard customers over 
3,000 combinations of annual percentage rates, credit limits, 
finance charges, and fees that are available on several of its 
different credit cards.  As you probably well know, it often 
solicits by mail.

COF had some resistance at the $133-$134 level.  Did that phase 
our financial giant which had the complete backing of the 
markets on Thursday and Friday?  Ha!  COF shot up +$5.44 in two 
days and broke through that old resistance.  It is now setting 
its sights on its all time high of $140 set back on January 20th.  
The job reports released on Friday were good news to the Fed and
investors alike.  The markets surged since it seems that the Fed 
won't increase interest rates to fight inflation.  That was also 
great news for COF.  Look for this company to flourish as 
investors regain their optimism in the market.    

No new news. However, be aware of profit taking.

March Plays Expire in 2 Weeks!

BUY CALL MAR-130 COF-CF OI=987 at $ 9.00 SL= 6.75
BUY CALL MAR-135*COF-CG OI=464 at $ 6.00 SL= 4.25
BUY CALL MAR-140 COF-CH OI=270 at $ 3.75 SL= 2.50
BUY CALL APR-135 COF-DG OI= 63 at $10.25 SL= 7.50
BUY CALL JUN-140 COF-FH OI=137 at $13.38 SL=10.50

Picked on February 13th at $121.81      PE= 34
Change since picked        +$14.00      52 week low =$ 51.75
Analysts Ratings         8-6-2-0-0      52 week high=$140.00
Last earnings 01/99 est 0.86   actual 1.04 surprise=+21%
Next earnings 04-16 est 1.20   versus 0.96
Average Daily Volume = 427.7 K
Chart = http://quote.yahoo.com/q?s=COF&d=3m
*******************************************
PVN - Providian Financial $107.13 (+5.00)(+3.63)(+6.19)(+2.87)

Providian Financial provides credit, investment services, and 
insurance protection to individual consumers. It is the 
nation's top secured card provider, and is also a leading 
Visa and Mastercard provider. Headquartered in San Francisco, 
PVN still provides traditional banking services in its home 
state of New Hampshire. 

Except for sharp drops in September and October, Providian 
has a beautiful chart. From its bottom in October, it had 
nearly tripled in price by January 28th, when it hit $103.94. 
Then it suffered a market-induced retrenchment during the 
first half of February. Most of the trading during this 
pullback was on relatively light volume. Strong volume 
returned on Feb 18th and 19th, as the stock surged on news 
that it had bought GetSmart, a leading Internet marketplace 
for consumer and business loans. This gives PVN an 
e-commerce division. PVN has been a great performer for us. 
It continues to show gains week after week. Each time it 
dips, it always rebounds strongly. 

On Friday, 3-5, PVN broke through all resistance to hit a 
new 52 week intra-day high of $109.06, but closed the day at 
$107.13.  Based on valuation, E.G. Edwards started coverage of 
PVN on 3-3 with "maintain", a rating that caused some selling, 
but the stock shrugged it off the next day. If downgrades 
based on valuation started piling on, PVN might react more 
negatively. However, with inflation worries now eased, the 
way is paved for further gains for this credit card king.

March Plays Expire in 2 Weeks!

BUY CALL MAR-100 PVN-CT OI=452 at $ 8.88 SL= 6.75  
BUY CALL MAR-105*PVN-CA OI=268 at $ 5.63 SL= 4.00  
BUY CALL MAR-110 PVN-CB OI=210 at $ 3.25 SL= 1.50
BUY CALL APR-110 PVN-DB OI=  0 at $ 6.63 SL= 4.50 (new) vol=56
BUY CALL JUN-110 PVN-FB OI= 50 at $10.88 SL= 8.50

Picked on Feb 21 at  $98.50     PE=50
Change since picked    8.63     52 week low= $ 28.38
Analysts Ratings  7-5-1-0-0     52 week high=$108.81
Last earnings on 12/98 est=.62  actual=.66 surprise=6%
Next earnings on  4-22 est=.70  versus=.39
Average daily volume = 853.3k
Chart = http://quote.yahoo.com/q?s=pvn&d=3m
*******************************************
CMA - Comerica Inc. $69.75 (+3.50)(+1.69)(+3.81)

As Michigan bank holding companies go, there are none bigger 
than Comerica.  The company's nearly 500 offices serve all 
types of customers, from the business elite to the individual 
consumer and small business.  Comerica is strongest in the 
commercial arena, including international finance, and offers 
traditional retail banking and loans.  It has subsidiaries in 
widely scattered US markets (California, Florida, Michigan, 
and Texas) and is stepping into Mexican and Canadian financial 
waters. To reduce its dependence on loan income, Comerica is 
concentrating on adding fee-based businesses.

CMA had a very nice week which was capped off with a gain
of $2.31 on Friday.  CMA is sensative to interest rates
and reacted nicely to the jobs report.  We see CMA continuing
upward as more and more money comes flowing into the market.
We are less than $5 away from a new 52-week high.  Watch 
for pullbacks to start new positions.  

CMA's CEO rang the closing bell at the NYSE on Friday. This
won't effect the stock, but is a note of interest.  CMA is 
kicking off a nationwide celebration for the occasion.  

March Plays Expire in 2 Weeks!

BUY CALL MAR-65*CMA-CM OI=142 at $5.00 SL=3.25 ITM $.25 premium
BUY CALL MAR-70 CMA-CN OI= 65 at $1.00 SL=0.00
BUY CALL APR-65 CMA-DM OI=200 at $5.63 SL=3.75 ITM $4.75
BUY CALL APR-70 CMA-DN OI=319 at $2.38 SL=1.25
BUY CALL JUL-70 CMA-GN OI=232 at $4.50 SL=3.00

Picked on Feb.19th at  $64.56   PE = 15
Change since picked     +5.19   52 week low =$46.50
Analysts Ratings    5-6-4-0-0   52 week high=$73.00
Last Earnings   01/99 est .97   actual .97
Next Earnings   04-19 est .98   versus .88
Average daily volume = 404.7k
Chart = http://quote.yahoo.com/q?s=CMA&d=3m
*******************************************
MWD - Morgan Stanley Dean Witter $98.94 (+8.44)(-2.25)(P3W+6.37)

MWD is a diversified financial service organization which 
provides services in three main areas: securities, asset 
management and credit services.  The company was formed 
through the merger of Morgan Stanley Group Inc. and Dean 
Witter Discover & Co. in June 1997.  Credit services consist 
primarily of the issuance, marketing and servicing of the 
discover card.  The company provides financial and securities 
services on a global scale and credit and transaction services 
nationally.  The securities business serves the investment 
needs of clients by providing a range of financial products, 
services and investment advice.  During 1997 the company acquired 
Discover Brokerage Direct In (formerly Lombard Brokerage Inc).

MWD had a tremendous week and topped the week off with a new
closing and intraday high.  MWD got as high as $99.44 on 
Friday.  With the news that interest rates should be kept in 
check for at least a while longer, interest sensative stocks 
had nice gains on Friday.  We still like MWD forward for the
same reasons Salomon raised their earnings estimates, continued
strong business in retail and underwritings. 

Remember, MWD announced a week ago that their Annual Shareholders 
Meeting will be on April 9th.  This is still a ways off, but 
this could be a time when they announce a split.  Last split 
was around $75.00 in early 1997.  Earnings for MWD should be
announced around this same time.    

March Plays Expire in 2 Weeks!

BUY CALL MAR- 95*MWD-CS OI=2169 at $ 6.25 SL=4.25 ITM $3.94 
BUY CALL MAR-100 MWD-CT OI=2213 at $ 3.25 SL=1.50 
BUY CALL APR- 95 MWD-DS OI=1393 at $ 9.00 SL=6.25 ITM $3.94
BUY CALL APR-100 MWD-DT OI= 765 at $ 6.00 SL=3.75
BUY CALL JUL-100 MWD-GT OI=1272 at $11.50 SL=8.00 

Picked on Feb.6th at      $89.00   PE = 17
Change since picked        +9.44   52 week low =$36.50 
Analysts Ratings       5-4-4-0-0   52 week high=$99.44
Last earnings on 01/99 est= 0.97   actual= 1.48
Next earnings on 04-07 est= 1.21   versus= 1.10
Average daily volume = 2.05 mln
Chart = http://quote.yahoo.com/q?s=MWD&d=3m  
*******************************************
SCH - Charles Schwab  $81.00 (+6.44)(+5.50)(+6.37)(-3.37)

Charles Schwab is a holding company with subsidiaries that 
provide financial services, which include discount brokerage, 
trade execution, investment, advisory services, and admini-
strative services. One subsidiary performs clearing and 
account maintenance and another is a market maker in Nasdaq 
securities. Schwab is the largest discount brokerage in the 
U.S., and operates 235 branch offices in 46 states, Puerto 
Rico, and the U.K. On Feb.8th, it also entered the Canadian 
market through an acquisition.

Online securities trading is growing by leaps and bounds. 
Last quarter it increased 34% over the previous quarter. One 
in seven trades is now placed through the internet.  With 
this growth in mind, investors have sent Internet brokers' 
stocks soaring in recent months. Online trading at Schwab was 
up 65% in January, and assets in customer accounts reached 
$521 billion by the end of that month, an increase of 40% 
over last year. Schwab handled 153,000 trades/day in January,
and has doubled its capacity for trades during the past 
three months. Schwab has been growing around 20% per year, 
but numbers like these suggest that is currently enjoying a 
much higher growth rate. Two weeks ago, the stock pushed 
above its 10 day moving average, where it has remained.

Schwab set a new high Friday of $81.38, and closed at, for 
the first time, $81.00. Although SCH has had a few trading 
glitches lately, they come partly as a result of efforts to 
upgrade their systems and increase capacity. Ultimately, 
this will improve service. Schwab commands about 30% of the 
online trading market and continues to make improvements 
(i.e. their new Signature Service for their best customers). 
PEs in this group are high and reflect online trading growth
expectations. As long as online trading continues to grow, 
this market leader will grow with it.

Be prepared for possible profit taking!

March Plays Expire in 2 Weeks!

BUY CALL MAR-75 SCH-CO OI=1993 at $ 7.25 SL= 5.50  ITM
BUY CALL MAR-80*SCH-CP OI=1998 at $ 3.88 SL= 2.00
BUY CALL APR-80 SCH-DP OI=   9 at $ 6.63 SL= 5.00 (new) vol=143
BUY CALL JUN-80 SCH-FP OI=   0 at $11.00 SL= 8.75 (new)

Picked on Feb 21 at  $69.06     PE = 91
Change since picked   11.94     52 week low =$18.50
Analysts Ratings  2-0-6-0-0     52 week high=$75.00
Last earnings on 12/98 est=.23  actual=.26 surprise=13%
Next earnings on  4-15 est=.23  versus=.17
Average daily volume = 1.94 mln
Chart = http://quote.yahoo.com/q?s=sch&d=3m
*******************************************
MER - Merrill Lynch $85.56 (+8.81)(+4.37)(+3.25)

Merrill Lynch is a leading global financial management and 
advisory company with a presence in 43 countries across six 
continents. MER provides investment, financing, insurance
and related services to both individuals and institutions. 
Its client assets total more than $1 trillion. As an
investment bank, it is a top underwriter of debt and 
equity securities. In addition to brokerage accounts, it 
offers one of the largest mutual fund groups available.

In the first half of 1998, MER was on a skyward climb. By 
late July, the stock reached $109.13. After that, its chart 
shows a deep V with a bottom on Oct. 8 of only $35.75. MER 
rebounded to $80.00 by the end of November, but then traded 
between the upper $60s and mid $70s until early January. It 
tested the post Oct. $80.00 resistance level in early Jan. 
and again in late February, as investors began to rotate 
into the brokerage sector.  Finally, on March 4, MER surged 
past resistance after an upward revision in earnings 
estimates by Guy Moszkowski at Soloman Smith Barney. It 
closed that day at $84.25 and on Friday, 3-5, it opened 
$3.63 higher at $87.88. Profit taking brought the day's 
gain to $1.19 and the week's gain to a whopping $8.81. 

On February 19, MER signaled a reversal in its no-online 
trading policy by agreeing to purchase the assets of D.E. 
Shaw Financial Technology, L.P. (DESoFT), a developer of 
Internet technology for financial institutions. With no 
fanfare, on Thursday, 3-4, MER quietly opened online trading 
to a limited number of its customers with special accounts. 
Merrill Lynch is looking very strong. It has moved up 3 
weeks in a row on good volume. Near term resistance is now 
at $87.88, the high it set Friday. Beyond that, MER has wide 
open skies until it reaches its 52 week high of $109.13. If 
Friday's rally continues, look for MER to keep moving up, 
although a little profit taking and consolidation pause at 
this level is possible--an executive V.P. at MER just sold 
20,000 shares of his stock.

March Plays Expire in 2 Weeks!

BUY CALL MAR-80*MER-CP OI=7341 at $6.75 SL=5.00  premium=$1.19
BUY CALL APR-80 MER-DP OI=4859 at $8.75 SL=6.50
BUY CALL APR-85 MER-DQ OI=3836 at $5.75 SL=4.00
BUY CALL JUL-90 MER-GR OI=1491 at $7.88 SL=6.00

Picked on Feb 28 at  $76.75      PE= 28
Change since picked    8.81      52 week low =$ 35.75
Analysts Ratings  4-2-6-0-0      52 week high=$109.13 
Last earnings on 12/98 est.=.63  actual= .86 surprise=37%
Next earnings on  4-13 est.=1.00 versus=1.30
Average daily volume = 3.19 mln
Chart = http://quote.yahoo.com/q?s=mer&d=3m
*******************************************
HRB - H&R Block $51.63 (+7.25)

H&R Block, Inc. provides income tax return preparation 
services, electronic filing and other related services. 
These services are provided to the public in the United 
States, Canada, Australia, the United Kingdom and other 
countries.  The company also provides origination, purchase, 
servicing and securitization of mortgage loans in the United 
States.  Credit card loans are also sponsored by the company 
through an Internet site and an online service under a 
co-branded agreement. Tax operations accounted for 81% of 
fiscal 1998 revenues.

HRB has been on a tear and we expect it to continue.  Be
aware that with such large gains in a short period of time,
that there is bound to be some profit taking.  HRB is
known mainly for its tax preparation and this simple fact
should propell HRB to new heights.  Anyone who files 
taxes will feel the horror of figuring out the new tax 
laws and this is just what makes HRB such a great play.
Even those that did their own taxes in the past are 
feeling the pressure of having a professional do them this
year.  HRB will be a huge benefactor of this scare.

On Thursday, HRB announced that tax preparation fees were
up over 21.5% over the same period last year.  They forsee
that this trend will continue, especially as we get closer
to the tax filing deadline.  HRB announced earnings on the
23rd of February that were an 82% surprise.  This also has
been a driving factor in the stock price.

March Plays Expire in 2 Weeks!

BUY CALL MAR-50 HRB-CJ OI=250 at $2.19 SL=1.00 ITM $1.63
BUY CALL APR-50*HRB-DJ OI=253 at $3.13 SL=1.50 ITM $1.63
BUY CALL APR-55 HRB-DK OI=  0 at $0.75 SL=0.00 (New Strike)
BUY CALL JUL-55 HRB-GK OI=  0 at $2.56 SL=1.25 (New Strike)

Picked on Mar.6th at   $51.63   PE = 25
Change since picked     +0.00   52 week low =$35.31
Analysts Ratings    3-3-1-0-0   52 week high=$51.63
Last Earnings  01/99 est -.17   actual -.03
Next Earnings  05-23 est 2.78   versus 2.37 (tax season)
Average daily volume = 215.8k
Chart = http://quote.yahoo.com/q?s=HRB&d=3m
*******************************************

SEE DISCLAIMER IN SECTION ONE 

*******************************************

The Option Investor Newsletter          3-7-99
Sunday             Part 3 of 6

*******************************************
Internet - Sector
*******************************************
BCST - Broadcast.com $91.69 (+7.88)(+13.12)(P4W +1.88)

Formally known as Audionet, Broadcast.com carries 
programming to the Net that you might otherwise see on your 
TV or hear on your radio.  They also Webcast live concerts 
sporting events, business conferences, CD's, news and 
audiobooks.  Their sources of content come from 385 radio 
stations, 40 cable and TV networks, and over 420 
professional and college teams.  FYI, it went public last 
July at $9 (split adjusted) and ran the now famous Net-
based Victoria Secrets fashion show.

Overall, a great week for BCST.  They are part of a new 
Internet index (^ECM) introduced 2 weeks ago on the CBOE.  
Analysts raised their price target to $100.  It probably 
won't take long to get there.  In AOL-like fashion, Eyeball 
share and as revenue is growing immensely with 
announcements last week that they will broadcast 
("narrowcast" actually, since programming is specifically 
targeted), the NCAA basketball finals.  They also announced 
they will carry Art Bell and Rush Limbaugh, 2 of the 
country's most popular radio shows.  We guess Dr. Laura 
won't be far behind.  Chart is positive, though more volume 
would make us feel better; earnings scheduled April 12.  
Confirm direction before playing.  July calls are 
expensive, thus none listed.  Still an Internet, sell too 
soon.

BCST announced last week that they will carry the first 
international, Internet-cast television-like news 
production, except that it will produced specifically for 
the Internet in 3-minute updates, which will improve the 
video quality.

Watch for possible profit taking.

March Plays Expire in 2 Weeks!

BUY CALL MAR-85*QBC-CQ OI=908 at $11.50 SL= 9.00 
BUY CALL MAR-90 QBC-CR OI=342 at $ 8.00 SL= 6.25 
BUY CALL MAR-95 QBC-CS OI=454 at $ 5.50 SL= 3.75 
BUY CALL APR-90 QBC-DR OI= 88 at $15.25 SL=12.00
BUY CALL APR-95 QBC-DS OI=298 at $13.13 SL=10.50

Average daily volume=2.2 mln.

Chart=http://quote.yahoo.com/q?s=bcst&d=3m
*******************************************
RNWK - RealNetworks $89.50 (+19.37)(+7.00)

RealNetworks pioneered the streaming software that allows 
audio and video broadcasters to deliver their products over 
the World Wide Web in real time.  The company's RealPlayer 
software is used by more than 30 million Web surfers who 
download the software for free.  Software license fees from 
broadcasters account for more than 75% of RealNetworks' sales.  
Companies that have purchased the company's broadcasting tools 
and services include ABC, At Home (Internet services), Dow 
Jones, and NBC. 

RNWK had a stellar week with almost a $20 gain.  On Friday,
RNWK traded as high as $92.25.  After the big gain on 
Monday, RNWK consolidated its gains for a few days and then
continued higher.  We continue to like RNWK even at these
levels for the simple fact that there is a lot of publicity
out there about on-line audio and video.  RNWK is at the 
forefront of this revolution.  With the big gains that the
stock has achieved, make sure you pick a proper entry point.
RNWK is an ideal stock to target shoot.  It tends to have a 
large daily trading range.  

RNWK has teamed with Jimmy Buffet to launch a 24-hour on-line
radio broadcast called "Radio Margaritaville.  This is just the
beginning of the boom in on-line audio shows and sites.  RNWK
has a leg up on all other audio and vidoe software.  RNWK is 
also helping Film.com provide extensive audio and video clips
of Oscar candidates to the world.

Be prepared for possible PROFIT TAKING

March Plays Expire in 2 Weeks!

BUY CALL MAR-85*QRN-CQ OI=291 at $ 8.38 SL= 5.75 ITM $4.50
BUY CALL MAR-90 QRN-CR OI= 42 at $ 5.75 SL= 3.75
BUY CALL MAR-95 QRN-CS OI= 24 at $ 3.75 SL= 2.00
BUY CALL APR-90 QRN-DR OI=142 at $12.13 SL= 8.50
BUY CALL MAY-90 QRN-ER OI=121 at $16.25 SL=12.25
(90 STRIKE IS HIGHEST CURRENT STRIKE OUTSIDE OF MARCH)

Picked on Feb.27th at   $70.13   PE = n/a
Change since picked     +19.37   52 week low =$14.50
Analysts Ratings     1-6-3-0-0   52 week high=$92.25
Last Earnings   01/99 est -.04   actual -.02
Next Earnings   04-27 est -.02   versus -.07
Average daily volume = 931.5K
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m
*******************************************
CMGI - CMGI, Inc. $152.19 (+29.56)(+13.63)

CMGI invests in, develops, and integrates advanced Internet,
interactive, and database management technologies. The company 
delivers creative products and services that will both generate 
and profit from direct marketing opportunities on the Internet.
A recognized leader in the Internet arena, CMGI combines 
operating companies with strategic venture investments to 
create a broad and diverse set of businesses delivering
Internet solutions.  Microsoft, Intel and Sumitomo hold 
minority positions in CMGI.

CMGI absolutely took off this week.  If finished the past five 
trading days with a gain of +$29.56.  Believe it or not, the 
surge should continue.  On Thursday March 11th, CMGI will 
announce its quarterly earnings.  It is possible that they could 
also announce a split.  Even though the company just split back 
in January, CMGI is steadily approaching its all time highs at 
the $155 level again.  They also have enough authorized shares 
for another 2:1 (100 million shares authorized and approximately 
46 million issued).  Watch CMGI take off this week especially if 
the markets can sustain their present rally.  Make sure to use 
stop losses to protect any profits!!

No new news.  Be forewarned - profit taking hazards ahead!

March Plays Expire in 2 Weeks!

BUY CALL MAR-150*QGW-CJ OI=1252 at $14.00 SL=11.25
BUY CALL MAR-155 QGW-CK OI= 366 at $10.50 SL= 8.75
BUY CALL APR-150 QGW-DJ OI=  49 at $25.00 SL=19.50
BUY CALL APR-155 QGW-DK OI=   5 at $23.13 SL=18.00

Picked on February 28th at $122.63      PE=155
Change since picked        +$29.56      52 week low  =$ 12.19
Analysts Ratings         2-4-2-0-0      52 week high =$155.34
Last earnings 12/98 est  0.12  actual  1.54 surprise=+366% 
Next earnings 03-11 est -0.23  versus -0.15
Average Daily Volume = 3.14 mln
Chart = http://quote.yahoo.com/q?s=cmgi&d=3m
*******************************************
Software - Sector
*******************************************
MSFT - Microsoft $154.94 (+4.81)(+2.38)(P3W -27.25)

From their own words, "Microsoft Rules." Although it's 
current reign is being rocked with revolution, the Evil 
M-pire (as some programmers and anti-Internet Explorer 
browser patriots call it), has been fighting the Federal 
government on anti-trust grounds for months. The line to 
take their turn and bad mouth the bully was long and 
distinguished.  Their defense was pitiful.  The fact is, 
MSFT is good at what they do.  They are the world's #1 
software company (Y2K compliant or not!) and their 
operating systems dominate the PC landscape. 

Brought to you live from the DOJ, a reprieve from the trial 
until its resumption in April!  Thank Goodness!  The 
embarrassment Microsoft suffered in the defense phase of 
the trial took its toll on investors.  Without the smoke of 
the trial, the stock firmed and is moving slowly upward 
headed into its 2:1 split on March 26 -- 3 weeks away.  
Split run strength typically happens in the 2 weeks prior.  
Now is the time to scale in.  We offer March strikes this 
week only since they will expire the week before the split 
-- at least we get a nice piece of the trend.  April 
strikes will get you through the split and may be better 
suited depending on your risk profile.  The chart just 
turned positive.  Confirm market direction or target shoot 
before taking a position.

In the news, At a high-profile briefing for reporters and 
analysts, MSFT unveiled its e-commerce strategy, which 
involves buying CompareNet, a price comparison solution for 
Internet use. Gates said the new initiative would be based 
on a framework dubbed BizTalk, a planned set of standards 
and technology to allow consumers and businesses to talk to 
each other online in the same language based on open 
Internet standards (Reuters).  It seems to have scared the 
pants off Intuit's investors (-$4.50 on Friday).  Intuit is 
basing their future on a similar strategy.

March Plays Expire in 2 Weeks!

BUY CALL MAR-150 MSQ-CJ OI= 7234 at $ 7.38 SL=5.50 
BUY CALL MAR-155 MSQ-CU OI= 8516 at $ 4.38 SL=2.75 
BUY CALL MAR-160 MSQ-CX OI=10305 at $ 2.25 SL=1.00 
BUY CALL APR-150 MSQ-DJ OI=10769 at $11.63 SL=9.25
BUY CALL APR-155*MSQ-DU OI= 6369 at $ 8.88 SL=6.75
BUY CALL APR-160 MSQ-DX OI=12188 at $ 6.63 SL=5.00

**SPLIT PLAY

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*******************************************
LGTO - Legato Systems, Inc. $50.56 (+1.31)(+6.75)

LGTO develops and supports network storage management software
products that back up and protect data across corporate
computer networks.  Its NetWorker software for UNIX, Microsoft
Windows NT, and Novell's NetWare operating systems
automatically transfers files onto larger storage devices.
LGTO's Global Enterprise Management of Storage (G.E.M.S.),
which works with NetWorker, controls storage management across
a company's multisite network.  Products account for about 60%
of the company's sales.  The rest comes from technical support
services and a growing list of more than 20 partnering hardware
manufacturers who license and integrate NetWorker into their
systems and pay LGTO regular royalties.

LGTO completed a documented stock cycle last week.  Seven up
days followed by 3 down days.  LGTO was having some trouble
with the $50 dollar level last week, so it was nice to see it
move through this level on Friday.  LGTO closed right at its 30
dma on Friday.  The next major resistance level for LGTO should
be its 50 dma which is currently at $55.  With the Yahoo! Deal
that it announced last week (discussed below), we are
optimistic about its prospects.  

In the news, LGTO signed a multi-year, multi-million dollar
enterprise license agreement to provide Yahoo! with its storage
management product.  After this deal was announced an analyst
reiterated its buy rating on LGTO, as they feel that the deal
with Yahoo! validates LGTO's position as the leading provider
of scalable, multi-platform storage management solutions. 
Also, LGTO announced that it has integrated a third parties
online data storage management product into its Windows NT
product suite.

March Plays Expire in 2 Weeks!

BUY CALL MAR-45 EQN-CI OI=486 at $6.25 SL=4.25
BUY CALL MAR-50*EQN-CJ OI=642 at $3.00 SL=1.50
BUY CALL MAR-55 EQN-CK OI=486 at $1.00 SL=0.00
BUY CALL APR-50 EQN-DJ OI= 55 at $5.25 SL=3.25
BUY CALL JUN-55 EQN-FK OI= 65 at $6.38 SL=4.25

Picked on Feb 28th at $49.25   PE=65
Change since picked    +1.31   52 week low =$22.50
Analysts Ratings   7-6-1-0-0   52 week high=$67.75
Last earnings  12-98 est=.22   actual=.24
Next earnings  04-21 est=.22   versus=.13
Average Daily Volume = 864K
Chart = http://quote.yahoo.com/q?s=LGTO&d=3m
*******************************************
SONE - Security First Tech. $69.38 (+3.75)(+17.00)(P3W+15.38)

SONE develops and licenses Internet application software 
that helps financial institutions offer bill paying, money 
transfers, expense tracking, and a host of personal, 
secure, on-line financial software to their customers.  
Citibank, First National Bank and Royal Bank of Canada are 
current users.  Royal Bank of Canada is now a major 
investor.  HP and Anderson Consulting have formed alliances 
with SONE recently as part of their e-commerce consulting 
services.

What a beautiful chart, though we've had a few days of 
consolidation at this level on really low volumes.  There 
are only 9.2 million shares of float, so any volume above 
the daily average gooses the price.  When we started the 
play last week, we noted the 184% revenue growth over last 
year.  Royal bank of Canada, with over 10 mln. customers 
and 1500 branches, will pay SONE $50 million over 5 years 
to license the technology, while picking up preferred 
shares and warrants.  Over the next 18 mos., they will roll 
out on-line financial services and e-commerce solutions to 
their customer, ala Intuit.  We know other banks will 
follow, but we don't know when. SONE has no split history 
and earnings are not until May 11.  But First Call 
consensus analysts' recommendation is a "strong buy".  This 
is a momentum play only.  It's volatile and options are 
thinly traded.  Wait for volume to come into the stock; 
confirm market direction before playing.

Hewlett Packard's Lewis Platt said they will devote $10 
million toward their recently-formed alliance with SONE and 
Andersen Consulting to develop financial-services 
applications for the Internet (an integral part of their 
break into 2 divisions).

March Plays Expire in 2 Weeks!

BUY CALL MAR-65*QFB-CM OI=201 at $7.00 SL=5.25 
BUY CALL MAR-70 QFB-CN OI=117 at $4.38 SL=2.50 
BUY CALL MAR-75 QFB-CO OI= 32 at $2.50 SL=1.25 riskier
BUY CALL APR-70 QFB-DN OI= 53 at $8.50 SL=6.50  
BUY CALL APR-75 QFB-DO OI= 59 at $6.63 SL=4.75 riskier

**no fundamentals, momentum only

Average daily volume = 206k

Chart = http://quote.yahoo.com/q?s=sone&d=3m
*******************************************
EMC - EMC Corporation $104.56 (+2.19)(-1.56)(+1.56)(+4.88)

EMC is a Fortune 500 company that designs, manufactures,
markets an supports high performance storage products.  The
company's products store retrieve, manage, protect and share
information from all major computing environments, including
UNIX, Windows NT and mainframe platforms.  EMC markets its
memory products under the name Symmetrix.  EMC and its
enterprise storage systems have developed a clear cut
technological edge over its competition.  The company has been
able to successfully leverage its leadership position in the
mainframe storage area into the lucrative, faster growing open
systems market.  

On Thursday we were discussing a congestion zone at $101.50 to
$102.50 that might prove to be some resistance for EMC.  EMC
jumped right over this congestion zone on Friday and closed
above it.  In discussing support and resistance, take a look at
EMC's chart and see how it bounced off of its 50 dma last week. 
It appears as though $105 could prove to be minor resistance
and we would look for support on EMC in the congestion zone
referred to above.  As indicated in the news paragraph below,
EMC may be hinting that its growth forecasts are too low.

In the news last week, EMC introduced new Fibre Channel network
storage and switching equipment that allows multiple storage
systems to be connected together.  Such systems give a company
an enterprise-wide view of all the data stored on its
computers, eliminating islands of isolated data trapped in
departments.  EMC believes the new products could expand its
potential market to $50 billion in 2002.  Several analysts
believe that EMC may be hinting that its goal of $10 billion in
revenues two year from now may be too low.  Also, EMC indicated
that it is looking for more growth in Asia.  Currently Asia is
10% of total sales, and EMC would like to grow that to 15%.

March Plays Expire in 2 Weeks!
BUY CALL MAR-100 EMB-CT OI=2342 at $ 7.00 SL= 5.25
BUY CALL MAR-105*EMB-CA OI=3983 at $ 3.63 SL= 1.75
BUY CALL MAR-110 EMB-CB OI=3115 at $ 1.50 SL= 0.75
BUY CALL APR-110 EMB-DB OI=2040 at $ 5.63 SL= 3.75
BUY CALL JUL-110 EMB-GB OI= 766 at $13.00 SL=10.50

Picked on Feb 14th at $102.38    PE=66
Change since picked     +2.19    52 week low =$ 34.25
Analysts Ratings   10-6-0-0-0    52 week high=$109.88
Last earnings   12-98 est=.46    actual=.48
Next earnings   04-22 est=.39    versus=.28
Average Daily Volume = 3.9 mln
Chart = http://quote.yahoo.com/q?s=EMC&d=3m
*******************************************
Biotech  - Sector
*******************************************
MEDI - MedImmune, Inc. $59.50 (+4.50)(-.75)(+5.50)(-2.19)(+2.94)

Based in Gaithersburg, Maryland, MedImmune is a biotechnology 
company engaged in the development and marketing of products 
for the prevention and treatment of infectious diseases and 
for use in transplantation medicine. Revenues for the quarter 
ended 12-31 rose 73% to $92.9M from $53.8M. Three big drugs 
developed by this company are: Synagis, a respiratory 
antibody and the first monoclonal antibody ever to be licensed
for any infectious disease; Cytagan, MEDI's first antibody 
product, which is still growing in sales; and RespiGam, used 
to treat respiratory infections in infants.

MEDI began moving up again in late January, following some 
post-split consolidation. After reporting record fourth 
quarter earnings and receiving a new "strong buy" rating, 
the stock was off to the races. During February's weak market, 
it drifted a little lower, but always found support just 
below $49.00. After hitting $59.00 twice in late February, 
it tested the $59.50 level twice the first week in March, 
and that is where it closed on Friday--right at resistance. 
Support is now in the low 50s.
  
On Friday, Morgan Stanley Dean Witter upped their price target 
on MEDI from $60.00 to $70.00, and that should give the stock 
a boost. MEDI's previously announced alliance with Ixsys to 
develop 4 antibodies that may inhibit or shrink cancerous 
tumor growth will also continue to help the stock. The joint 
effort could generate as much as $50 million, excluding 
royalties, if it succeeds.
 
March Plays Expire in 2 Weeks!

BUY CALL MAR-55*MEQ-CK OI=775 at $5.63 SL=4.00 
BUY CALL MAR-60 MEQ-CL 0I=975 at $3.00 SL=1.50
BUY CALL APR-60 MEQ-DL OI= 43 at $5.13 SL=3.25
BUY CALL JUN-60 MEQ-FL OI=  8 at $7.88 SL=6.00

Picked on Feb 7th at $52.44    PE = 62
Change since picked    7.06    52 week low= $21.00
Analysts' ratings 6-4-0-0-0    52 week high=$59.50
Last earnings on 12-98 est=.42 actual=.39 surprise=-7%
Next earnings on  4-22 est=.31 versus=.22
Average daily volume = 788.2 k
http://quote.yahoo.com/q?s=MEDI&d=3m
*******************************************
Miscellaneous  
*******************************************
PG - Procter & Gamble $94.00 (+4.50)

You will recognize many of the brand names of PG such as Tide,
Folgers, Pampers, Scope, and Cover Girl.  PG is the US's #1
manufacturer of household products and the world's largest
advertiser.  PG operates in five main product categories:
laundry and cleaning (detergents, bleaches), paper goods
(diapers, toilet paper, feminine protection products), beauty
care (lotions, shampoos), food and beverage (coffee, juices,
snacks), and health care (toothpaste, over-the-counter
medicines).  PG also produces As the World Turns and two other
soap operas.  Roughly half of PG's sales come from outside the
US.  Among its many innovations, PG developed olestra, a fat
substitute used in snacks and crackers. 

In the news last week, PG's CFO told a Merrill Lynch conference
that he was comfortable with analysts estimated for upcoming
quarter and for all of fiscal 1999.  An analyst at the meeting
said that PG is in the final stages of their internal analysis
of a reorganization plan that was announced last fall.  The
analyst also said that there would likely be a material cost
cutting and savings element to the plan.  PG continues to
strategically realign their brands.  They have announced that
its Hawaiian Punch brand and Coast soap brand are for sale.  

We played PG a couple of weeks ago and it ran smack into
resistance at $93 and promptly reversed course.  It made a good
move last week, and since it has cleared this resistance we are
going to add them back to the play list.  If you wanted to be
more conservative in playing PG, you could wait for it to take
out its 52 week high which is at $94.81.  

March Plays Expire in 2 Weeks!

BUY CALL MAR-90 PG-CR OI=2246 at $4.88 SL=2.75
BUY CALL MAR-95 PG-CS OI=2983 at $1.31 SL=0.00
BUY CALL APR-95*PG-DS OI=3948 at $3.25 SL=1.50
BUY CALL JUL-95 PG-GS OI=2184 at $6.63 SL=4.75

Picked on Mar 7th at  $94.00   PE=31
Change since picked    +0.00   52 week low =$65.13
Analysts Ratings   4-8-6-0-0   52 week high=$94.81
Last earnings  12-98 est=.77   actual=.78
Next earnings  04-23 est=.70   versus=.65
Average Daily Volume = 2.3 mln
Chart = http://quote.yahoo.com/q?s=PG&d=3m
*******************************************
TJX - TJX Companies,inc. $33.56 (+5.00)

TJX companies, inc. is the largest off-price apparel and 
home fashions retailer in the U.S. and worldwide. The Company 
operates 604 T.J. Maxx, 475 Marshalls, 35 HomeGoods and 6 A.J.
Wright stores in the United States. In Canada, the Company 
operates 87 Winners, and in Europe, 39 T.K. Maxx stores.

TJX remained stuck in a trading range for nearly 2 months. It
took off at the end of February on anticipation of a strong 
earnings report March 3. TJX did not disappoint. Q4 earnings 
were $126.8 million, or $.39/share, beating the street's 
estimate of $.35/share. Q4 in the previous was $98.6 million, 
or $.29/share. Yearly net income was $1.27/share versus 
$.88/share. Marcia Aaron at B.T. Alex Brown, who rates TJX a 
"strong buy," says it "looks like they're off to a great start
in 1999, and they're going to accelerate their expansion." 
 TJX now expects to open 53 new T.J.Maxx and Marshalls stores 
in the U.S. in 1999, up from plans of 30 to 40. She claims 
that TJX's discount concept will allow them to do well in 
both good and bad times. Another analyst called TJX "terrific" 
and "one of the toughest retailers in the business." 

The day after fourth quarter results were announced, TJX 
reported February sales numbers. Same store sales jumped 9% 
and net sales increased 14%. Fueled with this positive news 
and bullish broker's comments, this stock should continue to 
rocket higher. Choose your entry carefully.

 March Plays Expire in 2 Weeks!

BUY CALL MAR-30 TJX-CF OI= 491 at $3.88 SL=2.25 
BUY CALL MAR-35 TJX-CG OI=  95 at $ .50 SL=0.00 
BUY CALL APR-30*TJX-DF OI=1590 at $4.38 SL=2.75
BUY CALL APR-35 TJX-DG OI= 178 at $1.50 SL= .75
BUY CALL JUL-35 TJX-GG OI= 554 at $3.38 SL=1.75

Picked on Mar 6  at  $33.56     PE=25
Change since picked    0.00     52 week low= $15.50
Analysts Ratings  5-5-2-0-0     52 week high=$32.69
Last earnings on  1/99 est=.35  actual=.39
Next earnings on  5-19 est=.31  versus=.26
Average daily volume = 964.5k
Chart = http://quote.yahoo.com/q?s=tjx&d=3m
*******************************************
ANF - Abercrombie & Fitch $87.00 (+11.00)(+4.94)

Abercrombie & Fitch sells men's and women's casual clothes 
and accessories in over 170 stores across America.  Their 
comfortable styles of jeans and crews are especially popular 
with teens and college students.  Check out this Volkswagen 
hip-hop retailer the next time you are strolling through 
the mall.

We added ANF in this past Tuesday's edition of the newsletter 
after ANF broke from its coiling pattern to set a new all time 
high.  When a stock finally breaks out, the moves can be huge.  
Add to that a market that has been dying to rally and you get 
a +$11.00 gain in a week for ANF.  Then company is now in blue 
sky territory.  There's no telling just how far this retailer 
can climb especially if the markets continue to provide the 
backing.  As ANF edges ever higher, the chances of it splitting 
for the first time increase.  It has more than enough authorized 
shares to do so.  Look for ANF to continue to sew up gains.  

News:  On Friday, ANF set an all time high in intraday trading 
at the price of $90.19.  Set those stops!  Profit taking likely!

March Plays Expire in 2 Weeks!

BUY CALL MAR-80 ANF-CP OI=1784 at $ 8.50 SL=6.50
BUY CALL MAR-85 ANF-CQ OI= 145 at $ 5.38 SL=3.75
BUY CALL APR-85*ANF-DQ OI= 110 at $ 8.00 SL=6.25
BUY CALL MAY-85 ANF-EQ OI= 107 at $10.38 SL=7.50

Picked on January 26th at $80.75      PE= 46
Change since picked      +$ 6.25      52 week low =$29.50
Analysts Ratings      11-3-1-0-0      52 week high=$90.19
Last earnings 02/99 est 0.68   actual 1.12 surprise=+65% 
Next earnings 05-18 est 0.16   versus 0.12
Average Daily Volume = 499.2 K
Chart = http://quote.yahoo.com/q?s=ANF&d=3m
*******************************************
SBUX - Starbucks Corp $58.75 (+5.87)(+4.50)

Starbucks is the #1 specialty retailer of coffee in the US.  
It operates more than 2,000 shops across the United States, 
Asia, Canada, and the UK.  They can be found in places ranging 
from office buildings and airports to shopping centers and 
supermarkets.  Starbucks sells a wide variety of specially 
blended coffees and pastries as well as the beans, coffee 
grinders, and coffee makers.  It has a deal with Dreyer's to 
make coffee ice cream and also has bonded with PepsiCo to make
Frappuccino, a bottled coffee drink.

Starbucks is splitting 2:1 on March 19th.  The company has 
picked up momentum and added +$5.87 in this week's trading.  
Look for it to continue to perk up as we edge closer to the 
split date.  It is incredibly close to breaking its all time 
high of $59.94.  If the markets can continue to rally, they 
might provide the extra shot of caffeine needed to break that 
level.  Once it does, it will be in blue sky territory.  Make 
sure to set trailing stop losses to protect your profits.   

New:  Starbucks will soon be expanding its international 
presence in the Middle East.  Coffee connoisseurs in Saudi 
Arabia, Oman, Bahrain, United Arab Emirates, and Lebanon will 
soon get to enjoy Starbucks blends after a test store in Kuwait 
City was highly successful. 

March Plays Expire in 2 Weeks!

BUY CALL MAR-55*SQX-CK OI= 766 at $5.00 SL=3.25
BUY CALL MAR-60 SQX-CL OI= 456 at $2.00 SL=1.00
BUY CALL APR-55 SQX-DK OI= 703 at $6.50 SL=4.75
BUY CALL APR-60 SQX-DL OI= 895 at $3.88 SL=2.50 post split 30s
 
Picked on March 4th at $56.56      PE= 70
Change since picked   +$ 2.19      52 week low =$28.75
Analysts Ratings    5-6-5-0-0      52 week high=$59.94
Last earnings 01/99 est 0.23   actual 0.29 surprise=+26% 
Next earnings 04-22 est 0.20   versus 0.15
Average Daily Volume = 1.09 mil
Chart = http://quote.yahoo.com/q?s=sbux&d=3m
*******************************************
UTX - United Technologies Corp. $129.06 (+5.19)(-1.56)(+6.44)

UTX makes a variety of products, from elevators to air
conditioners. Its subsidiary Carrier is the world's largest
maker of heating and air-conditioning systems.  It manufactures
and services heating, ventilating, and refrigeration equipment. 
UTX's Otis is the world's #1 elevator manufacturer; it also
makes and services escalators, moving sidewalks, and shuttle
systems.  Its subsidiary Hamilton Standard produces engine
controls, environmental systems, propellers, and other flight
systems. Another subsidiary Pratt & Whitney makes engines for
both commercial and military aircraft.  The company's Sikorsky
unit makes helicopters

UTX set a new 52 week high on Friday.  In fact, UTX made good
moves on both Thursday and Friday, thanks to the Dow.  Dow
reactive stocks will do that in absence of any news to the
contrary.  The same holds true for the downside as well.  UTX's
trading pattern for the last few weeks has been up one week and
then down the next week.  Last week was the down week.  This
pattern developed out of UTX running ahead of the Dow, and then
pulling back.  Since it moved in tandem with the Dow last week,
the historical pattern of the last few weeks may not hold true
next week.

In the news last week, UTX announced that it has set up an
office in Singapore for its Asia Pacific headquarters.  Through
its presence in Asia, they are seeking regional joint ventures
and acquisitions.  Also, the US Justice Dept. sued Pratt &
Whitney, a UTX division, to recover about $75 million it claims
UTX overcharged the Air Force for jet engines.  UTX denied the
charges, and it didn't appear to have much of an impact on the
stock.

March Plays Expire in 2 Weeks!

BUY CALL MAR-125*UTX-CE OI=667 at $ 5.38 SL= 3.25
BUY CALL MAR-130 UTX-CF OI=189 at $ 2.56 SL= 1.25
BUY CALL MAY-130 UTX-EF OI=234 at $ 7.38 SL= 5.25
BUY CALL MAY-140 UTX-EH OI=390 at $ 4.00 SL= 2.50
BUY CALL AUG-120 UTX-HD OI=114 at $16.63 SL=13.00

Picked on Jan 10th at $114.69   PE=22
Change since picked    +14.37   52 week low =$ 71.75
Analysts Ratings    8-4-4-0-0   52 week high=$129.81
Last earnings  12-98 est=1.11   actual=1.16
Next earnings  04-20 est=1.21   versus=1.04
Average Daily Volume = 728K
Chart = http://quote.yahoo.com/q?s=UTX&d=3m
*******************************************

PLAYS CONTINUED IN SECTION FOUR.

*******************************************

SEE DISCLAIMER IN SECTION ONE

*******************************************      


The Option Investor Newsletter             3-7-99
Sunday                4  of  6

*******************************************
WMT - Wal-Mart $93.25 (+7.12)(+1.38)(P4W +.75)

Wal-Mart is the leading discount retailer in the world, with 
a presence in all 50 states, as well as Canada, Mexico, Asia,
Latin America, and Europe. In addition to discount department
stores, it operates the #2 grocery chain, behind Kroger's, 
and Sam's clubs, which is the #2 warehouse chain. This retail 
giant's market capitalization is $182.3 billion.

We have been playing WMT as a slow but steady momentum stock 
with strong fundamentals, and as a split candidate. This 
stock does not move the way the Internets do, but it not as 
risky, either. Since Thursday, we are now recommending WMT 
for a split run price increase, as well as momentum gains 
based on the following positive news.

On Thursday, 3-4, WMT announced a 2-for-1 stock split, a 29% 
increase in its dividend, and an expansion in its share 
repurchase program by $1.2 billion to $2 billion. What more 
could investors ask for? After an outstanding fourth quarter, 
Wal-Mart is continuing with strong numbers in the current 
quarter, too. February net sales were up 17.7% year over year. 
And same store sales increased 10.3% over last year. On 
Friday, 3-5, WMT set a new intra-day high of $94.25 and a 
new closing high of $93.25. Volume was nearly 3 times 
average. The stock splits April 19 for shareholders of 
record March 19. You can bet on this leader's strength. 
However, be prepared for possible profit taking.

March Plays Expire in 2 Weeks!

BUY CALL MAR-85 WMT-CQ OI=6108 at $8.75 SL= 6.50 Premium $.50
BUY CALL MAR-90*WMT-CR OI=9848 at $4.75 SL= 3.00
BUY CALL APR-95 WMT-DS OI= 571 at $4.00 SL= 2.50
BUY CALL JUN-90 WMT-FR OI=2827 at $9.75 SL= 7.25
BUY CALL JUN-95 WMT-FS OI= 406 at $7.00 SL= 5.25

Picked on Jan 26th at $83.56    PE = 45  
Change since picked    +9.69    52 week low= $48.06
Analysts' ratings 7-11-4-0-0    52 week high=$89.50
Last earnings on 12/98 est=.66  actual=.70  
Next earnings on 5-12  est=.42  versus=.37
Average daily volume = 2.96 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m
*******************************************
CL - Colgate-Palmolive Co $92.56 (+7.68)

Colgate-Palmolive manufactures and markets a wide variety of 
products for the consumer.  They have two distinct businesses 
segments: oral and personal care products and pet nutrition. 
CL is the #1 seller of toothpaste - everyone brushes!  And 
their Hill's Science Diet brand is a leading premium pet food 
worldwide. Almost 70% of their total sales revenue come from 
foreign accounts.

CL had an earnings run late January and found support at 
$83-84.  They reported a record year on 2-4 and posted 
.73 vs .63 for the 4Q.  Against probability, CL broke out 
again and but couldn't climb above the resistance at $87. 
Some consolidation occurred at the end of February hedging 
the stock back to its old support level.  Like a ball bouncing 
between a floor and ceiling so is the analogy for CL.  After 
the recent profit taking, CL is again taking off gaining 
steadily since Monday's open.  The market momentum on Friday 
pushed CL up another +2.18 points to have it close 5 points 
above its 10dma.

Besides announcing earnings on 2-4, Colgate-Palmolive also 
announced it has lowered its 1999 unit volume growth forecast 
for Brazil in consideration of the country's financial picture.  
A split candidate? They have 1 billion shares authorized and 
only 292.8 million shares outstanding so the potential is there.  
The last time they split was in May 1997.  CL had a 2:1 
stock split when its stock was hovering around $120.  We'd love 
to play a split run - we'll keep you posted!

March Plays Expire in 2 Weeks!

BUY CALL MAR-90*CL-CR OI=272 at $4.00 SL=2.50
BUY CALL MAR-95 CL-CS OI=140 at $1.44 SL=0.75
BUY CALL APR-95 CL-DS OI= 58 at $3.25 SL=1.75
BUY CALL MAY-95 CL-ES OI=403 at $4.75 SL=3.00

Picked on March 7th at $92.56    PE = 34
Change since picked     $0.00    52 week low =$65.06
Analysts Ratings    6-6-4-0-0    52 week high=$98.88
Last earnings 2/99   est= .69    actual= .73 surprise +5.8%
Next earnings 4-22   est= .65    versus= .60
Average Daily Volume = 1.1 mln
Chart = http://quote.yahoo.com/q?s=CL&D=3m
*******************************************
LOW - Lowe's Companies, Inc. $62.00 (+2.69)(+2.25)(+3.06)

LOW is the #2 US home improvement chain, after The Home Depot,
and has more than 474 stores in 26 states.  LOW sells a broad
range of building supplies, hardware, home decor and garden
products, appliances, lumber, tools, paint, and consumer
electronics.  LOW helps customers design kitchens and even
installs many of its products, including doors, flooring, and
cabinets.  LOW continues to expand from its original eastern US
stronghold and is adding more stores in the South, Midwest, and
West.  Late last year it announced the acquisition of Eagle
Hardware a regional home improvement chain with 35 stores in
the West.

We were kind of concerned about LOW on Thursday.  The Dow had
made a good move, there positive retail reports out, and LOW
did not participate.  But, LOW made a good move on Friday, set
a new 52 week high, and closed at the high.  LOW has now
cleared resistance, and with the sector rotation into retail,
we look for LOW to continue its move higher. 

We really didn't have any news on LOW last week.  All of the
news happened two weeks ago with their earnings announcement. 
As we discussed above, we think the sector rotation into 
retail will continue to drive LOW.

March Plays Expire in 2 Weeks!

BUY CALL MAR-55 LOW-CK OI= 477 at $7.38 SL=5.25
BUY CALL MAR-60 LOW-CL OI=1039 at $2.75 SL=1.25
BUY CALL APR-60*LOW-DL OI=1798 at $4.50 SL=2.75
BUY CALL JUL-60 LOW-GL OI= 440 at $7.88 SL=5.75

Picked on Jan 31st at $58.31   PE=40
Change since picked    +3.69   52 week low =$23.88
Analysts Ratings  6-13-3-0-0   52 week high=$62.00
Last earnings  01-99 est=.27   actual=.30
Next earnings  05-21 est=.33   versus=.27
Average Daily Volume = 1.5 mln
Chart = http://quote.yahoo.com/q?s=LOW&d=3m


*************************************************************
PUTS, PUTS, PUTS
*************************************************************
Put plays can be very profitable but have a larger risk than
call plays. When a stock is falling the entire investment
community (except the shorts) is hoping it will reverse and
start back up. The company management is also doing everything
they can to shore up their stock price. The company issues
press releases, brokers talk it up, analysts try to put a
positive spin on everything. Then of course there is the death
knell, the "buy recommendation" simply because the price has
dropped to some level that analysts feel attractive again. 
Buyers who like the stock wait until it appears a bottom has
been reached and then jump on it in a feeding frenzy. They may
already have a large position and are averaging down. Many
factors can stop a free falling stock in mid drop.
*************************************************************
Recommended Puts 
*************************************************************
CB - Chubb Corp. $61.56 (+1.56)(-1.75) 

We are keeping CB as a put play with the thought that the
stock is still in a precarious situation.  We feel that the
gains it had this week are merely market driven, not company
specific.  A bearish sign on Friday was the fact that CB 
started out of the gates very strong, but actually closed
well below the point it opened.  There is some support for the 
stock at its 30-dma of $59, but if it breaks this support 
it very easily could drop to $55.  CB did fade after hitting 
its short-term resistance at $63.  If CB rises on Monday, a 
good time to buy a put would be a drop after hitting the 
$63 level. 

March Plays Expire in 2 Weeks!

BUY PUT MAR-65*CB-OM OI= 20 at $4.38 SL=3.00 ITM $3.24
BUY PUT MAR-60 CB-OL OI=197 at $1.31 SL=0.68

Chart = http://quote.yahoo.com/q?s=CB&d=3m

*****

CDWC - CDW Computer Center, Inc. $64.50 (-5.13)

CDWC sells in excess of 30,000 computer products through
catalogs, telesales, and the Internet.  The company has more
than 600,000 customers, most of which place orders by telephone
and online through the company's Web site.  Business,
government, and institutional customers account for more than
80% of sales.  CDWC sells items such as PCs, notebooks,
printers, software, accessories, add-on boards, and networking
products from companies including 3Com, Compaq, Hewlett-
Packard, Microsoft, Sony, and Toshiba. 

CDWC really started its downward move after its earnings
announcement in January.  Even though it beat estimates and
posted a 32% increase in net income over the year ago period,
analysts focused on the decline in its gross margin
percentage.  It dropped from 13.2% to 12.7%.  The negative news
for the PC sector just keeps rolling in.  It started with
Compaq, and now it is starting to impact the retailers.  Comp
USA came out with an earnings warning on Friday, and it wasn't
pretty.  Both sales and profits are declining.  

CDWC closed right at its 200 dma on Friday.  It might be a
little support for CDWC, but if it can break down through it,
it looks like the next stop will be $43. 

The put options on CDWC are thinly traded.

March Plays Expire in 2 Weeks!

BUY PUT MAR-70 DWQ-ON OI=24 at $7.63 SL=5.75
BUY PUT MAR-65*DWQ-OM OI=75 at $4.13 SL=2.50

Chart = http://quote.yahoo.com/q?s=CDWC&d=3m

*****

RAD - Rite Aid $38.50 (-2.88)(P3W -6.13)

Rite Aid is one of the top three largest drug stores in the 
country.  With 3900 units in 32 states, you may already 
have one in your neighborhood.  It goes without saying that 
they fill prescription, but they also sell cards, film, 
general merchandise and vitamins.  They announced late last 
year they would be adding General Nutrition Center 
(GNC)stores inside 1500 units.

The reasons to play this remain the same since we picked it 
Thursday night.  To make matters worse, they actually lost 
value on heavy volume, while the Dow as up over 250 points.  
RAD has been consistently hitting new lows since mid-
February, and today on 250% of normal volume, closed at its 
lowest level since early November, below its 200 DMA (yes, 
again).  Very bearish.  Their chart is negative on MACD, 
stochastics, momentum and RSI.  Though their sales have 
been increasing per store and system-wide, AMZN's recent 
purchase of a stake in Drugstore.com doesn't help the case.  
With the $1.5 billion January 1999 purchase of PCS Health 
Systems from Eli Lilly, S&P has affirmed their outlook as 
"negative".  We previously reported March 14 as earnings 
release date (from StockSmartPro).  Zack's and First Call 
list Earnings release as March 29.  For consistency, we'll 
stick with March 29 until we confirm with IR.  Confirm 
stock direction before playing.

This won't help:  Workers at two South Jersey Rite Aid drug 
stores have voted last week to join the United Food and 
Commercial Workers Local 1360, of West Berlin, in spite of 
a concerted effort by store management to thwart the 
unionization effort (PRNewswire).  This could spread, 
causing margin pressure system-wide.  We'll keep you 
posted.

March Plays Expire in 2 Weeks!

BUY PUT MAR-40*RAD-OH OI= 347 at $3.00 SL=1.50 
BUY PUT MAR-35 RAD-OG OI=   0 at $0.00 SL=0.00 new strike

Picked on March 2 at     $38.81        PE = 52
Change since picked      -$0.31        52 week low =$29.75
Analysts Ratings      6-3-3-0-0        52 week high=$51.13
Next earnings on 3-29 est= 0.50        versus=0.44
Average daily volume = 1.5 mln.
Chart = http://quote.yahoo.com/q?s=RAD&d=3m

*****

INTC - Intel $114.63 (-5.31)

Intel designs, manufactures, and markets microprocessors - 
its star performer is the Pentium chip. They have an 
overwhelming 85% of the market share in the industry. INTC
has been providing the microcomputer components for 
IBM-compatible PCs since 1981. 

The Nasdaq surged ahead to close up a hefty 44+ points as a 
result of the Job data and the semi-conductor stocks raced 
higher on news of the INTC-LEVL merger.  Lots of enthusiasm 
was generated ahead of the weekend for everyone but Intel!  
Second only to DELL in actively traded stocks on Friday, 
INTC gained only a miniscule +1.25.  It is presently sitting 
well below its 10dma of 122 and doesn't look like a stock that 
is going anywhere soon...except down.  Its micro charts show a 
definite downward trend and since 2-22 INTC has lost over 18+ 
points.  Considering the market will likely dip Monday 
afternoon and perhaps even Tuesday, this stock is a good 
candidate for some targetshooting.  Remember their antitrust 
case is also scheduled to begin on Tuesday. We may also see a 
prewarning for poor earnings next week as a result of soft 
sales in the PC industry and the continued bad press of their 
new Pentium III chip.  Intel could be deadweight and freefall 
to its 200dma @ $100 before its earnings report due on April 
14th.  Bear in mind, no pun intended, this play may need to be 
a quick in and out.  Always confirm market direction and know 
your tolerance for risk.

March Plays Expire in 2 Weeks!

BUY PUT MAR-110 INQ-OB OI=11415 at $2.38 SL=1.25
BUY PUT MAR-115*INQ-OC OI=11423 at $4.50 SL=2.75

http://quote.yahoo.com/q?s=intc&D=3m

*****

TBH - Telebras $68.00 (+3.38)

TBH headed higher this last week, but there are now more
worries surfacing about the Brazilian economy.  TBH opened
up at $70 on Friday and faded as the day passed.  TBH closed
just above its low of the day.  The $70 mark has been short
term resistance for this stock.  This is a risky play with
the volatility that the South American markets have had 
lately, but TBH very well could drop to $60 in the next
day or so.  An ideal play would be a fade after hitting the
$70 level again. 

March Plays Expire in 2 Weeks!

BUY PUT MAR-70*TBH-ON OI=5853 at $4.25 SL=3.00 ITM $2.00
BUY PUT MAR-65 TBH-OM OI=3897 at $2.06 SL=1.00

Chart = http://quote.yahoo.com/q?s=TBH&d=3m

*******

LHSG - LHS Group $40.69 (-2.31)(-3.88) 

LHSG is a telephone billing and customer service software 
and solutions provider.  They help telecoms manage their 
daily operations and billing, while handling multiple 
languages and currencies in over 50 countries.

1998 revenues reported Feb. 22 were up 55% over 1997; 
earnings up 39%.  That wasn't good enough for the street -- 
it punished the stock, as it has after the last 3 
announcements.  While investors pounded it, insiders filed 
an S-3 with the SEC on March 2 to sell 3.34 million shares.  
There are only 1.1 million shares in float  The Street 
punished them more.  March 4 after the close, the 
registration was withdrawn citing declining stock price.  
In a temporary sigh of relief, it gained $1.93 on average 
volume on Friday.  However, when insiders want to sell this 
much of their holdings, it's never good news.  The chart 
isn't pretty either.  Anyone short should have covered 
Friday.  Another wave of short selling may ensue as a 
result.  Wait for confirmation of stock and market 
direction 

We're unable to confirm from any reliable source, but there 
are grumblings of losing a major client in 2000.  Again, 
just a rumor.  Base your play on the above, not the rumor.

March Plays Expire in 2 Weeks!

BUY PUT MAR-45 QLH-OI OI= 162 at $5.25 SL=3.50 
BUY PUT MAR-40 QLH-OH OI= 260 at $2.06 SL=1.00 

Chart = http://quote.yahoo.com/q?s=LHSG&d=3m

*********

SMS - Shared Medical Systems Corp $49.44 (-1.56)

SMS is the nations leading healthcare information systems and 
services provider. They outsource computer services to health
organizations such as hospitals, physicians groups, and HMOs. 
SMS shares their powerful mainframe capabilities as well as 
extensive databases with their clients and also implements 
on-site processing systems. 

To keep on the leading edge of technology they have formed 
alliances with MSFT and CSCO. However, the bearish earnings 
forecast of IDX, a leader in the healthcare industry, hit the
information-systems sector hard on Friday.  The analysts got 
skittish and questioned if sales may be hurt by the effects of 
Y2K computer glitches. SMS responded by plummeting -3.82 (7%) 
on very strong volume.  Considering Wallstreet soared to new 
heights, this is more bad news for SMS.  In mid-February on news 
of a strategic alliance with AMC (to ensure Y2K compliance) the 
stock desperately tried to break through its resistance of $55, 
but failed.  Since then it has invariably continued to fall and 
is now below its old support of $51.  It just passed its 30dma 
of 50 and is heading towards its 52 week low of $40.06. 

March Plays Expire in 2 Weeks!

BUY PUT MAR-45 SMS-OI OI= 74 at $1.38 SL=0.75
BUY PUT MAR-50*SMS-OJ OI=144 at $3.50 SL=1.75
BUY PUT MAR-55 SMS-OK OI=400 at $7.13 SL=5.25

Chart = http://quote.yahoo.com/q?s=sms&D=3m

*******

VISX -  VISX, Inc. $84.63 (+22.88)(+6.75)

If your are nearsighted or farsighted and it drives you blind, 
you might want to "look" at VISX.  The company has designed 
and developed cutting edge technologies in the field of vision
correction.  By undergoing a procedure that takes approximately 
30 minutes, eye troubles are corrected by using lasers to 
reshape the cornea of the eye.  Then, viola- no more glasses 
or contacts!  VISX technology is highly popular as demonstrated 
by its use in 45 countries. 

VISX had been pretty flat in trading throughout January and 
February.  Then came the month of March.  On Monday the 1st, 
the company announced that it expected to report earnings 
between $0.51-$0.55 a share.  These numbers (which will be 
released on April 14th) were far better than Wall Street 
estimates resting at a mere $0.36.  The company attributed the 
numbers to an increasing demand for its Star S2Excimer Laser 
System and an increase in licensing fee revenues.  Several 
analysts and brokerages upgraded the company.  VISX proceeded 
to spike +$19.25 on Tuesday with a trade volume that was 5.5 
times greater than its norm.  Over 3 million shares traded 
hands.  The company has since hit an all time high of $86.50.  
But, beware the Ides of March!  We feel that VISX won't be able 
to hold the huge spike.  The excitement is over and the trade 
volume has returned to normal.  We feel VISX will hand back over 
some of its recent spike and therefore are adding it as a put 
play.     

This is a short term play as the stock is likely to correct
some next week after this week's big gain.

March Plays Expire in 2 Weeks!

BUY PUT MAR-80*VSQ-OP OI=161 at $1.88 SL=1.00
BUY PUT APR-80 VSQ-PP OI= 19 at $4.63 SL=2.75

Chart = http://quote.yahoo.com/q?s=VISX&d=3m

********

SNC -  Snyder Communications, Inc.  $31.06 (-3.19)(-1.81)

Snyder Communications, Inc. provides a wide range of 
integrated targeted marketing solutions to Fortune 500 clients 
that range from AT&T to several of the drug companies like Eli 
Lilly and Bristol Myers Squibb.  With over 8,000 employees, 
they provide direct marketing services that focus on 
telemarketing to potential customers across the world.

We are initiating coverage of SNC as a put play.  SNC has 
managed to string together consecutive lower highs as it has 
made its way downhill the past few weeks.  On Friday, it really 
caught our eye as a put play as it tumbled another -$1.25 in 
trading as the market reached its highest level in history on 
the 5th largest point gain in one day.  SNC is currently below 
every major moving day average including the 50, 100, and the 
big 200 dma.  Simply "put," SNC's technical indicators are ugly.  
We believe it could fall all the way down to its support at the 
$26 dollar level.  

March Plays Expire in 2 Weeks!

BUY PUT MAR-30*SNC-OF OI=1050 at $1.50 SL=1.00
BUY PUT APR-30 SNC-PF OI=  94 at $2.44 SL=1.25

Chart = http://quote.yahoo.com/q?s=SNC&d=3m

*****

INTU - Intuit Inc $86.63 (-4.50) (-12.31)

Intuit provides software that enable households and small
businesses to automate commonly performed financial tasks
such as paying bills, reconciling bank accounts,
maintaining budgets and tax preparations.

Microsoft's e-commerce push could begin to have some impact on
existing software firms including Intuit.  Its personal finance
software has held about 85 percent of the market.  But if 
Microsoft is successul in launching its e-commerce efforts through
its Mircosoft Network.  Although MSN has an estimated 1.5 million 
subscribers, it trails the 15 million subscribers held by AOL.  
But if its online offering takes off, Microsoft could see a jump 
in MSN.com subscribers.  The stock's recent rally failed at $100 
and is now sitting precariously near its 50-day moving average.  
The stock was down more than 4 points on a day (3/5) that the 
broad market rallied over 200 points.

BUY PUT MAR-90 IQU-OR OI=203 at $6.25 SL=4.75
BUY PUT MAR-85 IQU-OQ OI=462 at $3.63 SL=2.25
BUY PUT APR-85 IQU-PQ OI=100 at $6.50 SL=4.75

http://quote.yahoo.com/q?s=intu&D=3m 

*****

BBY - Best Buy $92.00 (-1.00) (-.75)

Best Buy Company sells personal computers and other home 
office products, consumer electronics, entertainment
software, major appliances and related accessories
through its retail stores. 

Best Buy is an extended play and particularly attractive given 
the latest news about slowing PC sales.  Circuit City (CC)
broke down recently from 52-week highs and Best Buy could 
follow.  We are recommending entering the stock at this
level even though it is at its highs and above the 50-day
moving average because the stock is very extended.  The stock
option could garner a profit just from profit taking alone. 
And if the news surrounding slowing PC sales spreads to the
retail sector, the play may give us some additional pop.

BUY PUT MAR-95 BBY-OS OI=269 at $6.00 SL=4.75
BUY PUT MAR-90 BBY-OR OI=780 at $3.25 SL=1.25
BUY PUT APR-90 BBY-PR OI= 70 at $6.38 SL=4.75

http://quote.yahoo.com/q?s=bby&D=3m

*****

BMCS - BMC Software $38.19 (-.38) (-2.69)

BMC Software provides systems management softwaresolutions 
for host mainframe and distributed informationsystems, and
also offers maintenance, enhancement & supportservices 
The distributed systems and application management markets in
which the Company operates are far more crowded and
competitive than its traditional mainframe systems management
markets.

A leader in enterprise-level software was downgraded by
Soundview in October 98 and by Morgan Stanley in December. 
The Company has experienced long development cycles
and product delays in the past, particularly with some of its
distributed systems products, and expects to have delays in
the future. Delays in new mainframe or distributed systems
product introductions or less-than-anticipated market
acceptance of these new products are possible and would have
an adverse effect on the Company's revenues and earnings.
Stock showing classic signs of a failed rally trading below
its declining 50, 100 and 200-day moving average and is
dangerously testing it prior support of $40.  If BMCS break
below $38, could garner additional profits

BUY PUT MAR-45 BCQ-OI OI=764  at $7.38 SL= 5.75
BUY PUT MAR-40 BCQ-OH OI=1568 at $3.00 SL= 1.75
BUY PUT APR-40 BCQ-PH OI=1730 at $4.38 SL= 2.75

http://quote.yahoo.com/q?s=bmcs&D=3m

******

CSCO - Cisco Systems $100.81 (2.56) (3.00) 
 
Cisco Systems provides networking solutions that connect 
computing devices and computer networks, allowing people to 
access or transfer information without regard to differences 
in time, place, or type of computer system. Company is 
positioning themselves to be a major force within the Internet 
market.
 
The networking sector has been under pressure since the first 
of February and Cisco is trading at its 50-day moving average 
and near-term support at $100. More problematic is that option 
speculators are betting that the stock will climb higher as 
evidence by our high Pinnacle Index (4.8) thereby creating 
overhead sentiment resistance. If stock breaks $90 support 
level, many buyers could be heading to the exit doors. 

BUY PUT MAR-100 CYQ-OT OI=8581 at $2.63 SL=1.25
BUY PUT MAR-95  CYQ-OS OI=8279 at $1.25 SL= .25
BUY PUT APR-95  CYQ-PS OI=3741 at $4.00 SL=2.25

http://quote.yahoo.com/q?s=csco&D=3m

*****

ELNK - EarthLink Network, Inc. $60.06 (-.16) (-.13)

EarthLink Network (ELNK) is an Internet Service provider, who 
supplies access, information, assistance, and services to its
customers, introducing them to the Internet. 

The company competes in the hot Internet sector but is among
only a few Internet companies trading below its 50-day moving
average.  If the broad market begins to roll over and bails
out of the Internet sector, investors are likely to exit the
weaker issues first.

BUY PUT MAR-60 QKL-OL OI=199 @ $4.13 SL=2.75
BUY PUT MAR-55 QKL-OK OI=391 @ $1.94 SL= .75
BUY PUT APR-55 QKL-PK OI=109 @ $4.88 SL=3.25

http://quote.yahoo.com/q?s=elnk&D=3m 

*****

WLA - Warner Lambert $68.63 (.44) (.19)

Warner Lambert is a manufacturer of ethical pharmaceuticals,
biologicals, capsules, consumer health care products and
confectionary products. 

Shares of large U.S. drug companies are being hurt by profit
taking and concerns about proposed changes to the Medicare
payment system. Recent inquiries regarding the
safety of Rezulin received nationally televised attention and
may give rise to  investor concern.   Also, it may be
difficult to sustain the growth rates for Lipitor, Rezulin
and Neurontin products that WLA has enjoyed this past year.
Stock's recent rallied failed just under its declining 50-day 
moving average with overhead resistance building between $70-75.

BUY PUT MAR-70  WLA-ON OI=2877 @ $2.81 SL=1.25
BUY PUT MAR-65  WLA-OM OI=2562 @ $ .88 SL= .25
BUY PUT APR-70  WLA-OM OI=2652 @ $4.38 SL=2.75

http://quote.yahoo.com/q?s=wla&D=3m 



*************************************************************
DISCLAIMER
*************************************************************

This newsletter is a publication dedicated to the education of
options traders.  The newsletter is an information service
only.  The information provided herein is not to be construed
as an offer to buy or sell securities of any kind.  The
newsletter picks are not to be considered a recommendation of
any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in
options.  It is possible at this or some subsequent date, the
editor and staff of The Option Investor Newsletter may own,
buy or sell securities presented.  All investors should
consult a qualified professional before trading in any
security.  The information provided has been obtained from
sources deemed reliable but is not guaranteed as to accuracy
or completeness.  The newsletter staff makes every effort to
provide timely information to its subscribers but cannot
guarantee specific delivery times due to factors beyond our
control.

The Option Investor Newsletter            3-7-99
Sunday                5  of  6

******************************************************************
Combos
******************************************************************
Rally or Retreat...Where do we go from here?

Friday, March 5

The U.S. stock market rocketed to new highs Friday as investors
went on a buying spree after the favorable February jobs report.
The DJIA ended up 268 points at 9736 eclipsing its January record
close and putting it within striking distance of the 10,000 mark.
The Nasdaq index of technology stocks rose 45 points to 2338. In
the broader market, advancing issues outnumbered declines 2-to-1
on active volume of 834 million shares on the NYSE. 

Thursday's new plays:

BFI  APR30C/APR35C  $2.75  Debit  (available near the open)
ICST APR17C/APR15P  $2.00  Debit  (priced around 10:45 am)
MTC  APR45C/MAR45C  $1.62  Debit  (very active issue!)
LEH  LJAN60/MAR60C  $9.38  Debit  (easy entry...)

Portfolio Activities:

PTEK is one of our marginal speculation plays and we may decide
to sell the MAR10C for $0.75 to create a small credit spread.
This method can work well to recover lost profits but do not
use it unless you fully understand the risks. The MENT debit
spread was closed for $1.50 and the remaining (short) position
in the CKH spread was closed for $0.93.

Once again, the spreads editor will be traveling to Denver this
week for the OIN "Options Bootcamp". I will be away from the
market during the seminar so any entry/exit prices from those of
you playing our current spread positions will be much appreciated!

Please send your questions and comments to ray@OptionInvestor.com
******************************************************************
NEW PLAYS 
******************************************************************
OEX - S&P 100 Index  $638.99     *** Neutral Spread ***

The Standard & Poor's 100 Index is a capitalization-weighted index
of 100 stocks from a broad range of industries. The component
stocks are weighted according to the total market value of their
outstanding shares. The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding. 

OBSERVATIONS:

The actively-traded S&P 100 Index options contain much more
premium than options on individual stocks and they also provide
an underlying instrument less prone to huge, gapping moves.
However, you can always be exercised early so monitor your
positions daily.

TECHNICALS:

It is favorable that the market once again failed to break below
key benchmarks last week and that positive short-term action
along with Friday's employment data boosted the DJIA to a new
record close. If the S&P 500 can now close above 1284 then the
probabilities will strongly favor a continued rally. However, the
long term outlook is still somewhat negative and if the market
fails to confirm Friday's stretch into new territory, it will
quickly fall back into the recent extended channel. With that
outcome being more probable, we offer this neutral OEX position.
It has a large profit range and an excellent risk/reward ratio.

Please review the Pinnacle OEX Section for more specific technical
information on the S&P 100 Index.
 
PLAY (conservative/butterfly spread):

BUY  (1) PUTS APR-650 OEY-PJ OI=30  A=$23.87
SELL (2) PUTS APR-640 OEY-PH OI=164 B=$19.00
BUY  (1) PUTS APR-630 OEY-PF OI=677 A=$15.75
INITIAL NET DEBIT TARGET=$1.25 ROI(max)=1500%
UPSIDE B/E=648.75 DOWNSIDE B/E=631.25

The butterfly spread is generally a neutral position that is a
combination of both a BULL spread and a BEAR spread. This spread
is designed primarily for the issue that will not experience much
of a net rise or decline by expiration. It usually requires only
a small investment or collateral requirement and has limited risk
but profits are limited as well. It can also be costly in terms of
commissions so you should consider playing these combinations with
a low cost (discount) broker. There are three strike prices in a
butterfly spread with calls, and it can also be done with puts or
a combination of the two. There are several approaches to trading
butterflys successfully and most have similiar risk/reward numbers.
The best (and simplest) outcome would be for the index to finish
the April expiration period at 640, where the maximum profit of
$18.50 is achieved.

CHART= http://quote.yahoo.com/q?s=^SPX&d=1y
******************************************************************
EMC - EMC Inc  $104.56     *** Technicals Only ***

EMC is the #1 maker of mainframe computer disk memory hardware and
software. The company makes RAID (redundant array of independent
disks) memory storage and retrieval systems for larger mainframe
computers as well as desktop PCs. EMC markets its memory products
under the name Symmetrix. Other products let users manage remote
data and share information across networks of different computers.

Recently, EMC introduced new networked storage systems that extend
its capacity to store an entire company's data to remote offices
and department work groups. At a news conference, the company set
forth its strategy for taking a major chunk of a market. EMC's
president said new products could expand the potential markets the
company targets up to $50 billion in sales by 2002. They declined
to comment on how that would translate into specific revenues for
the company but did suggest it would mean higher income growth
than previously expected.

We also like the long-term outlook for the stock but the current
trading range is near the $95 to $110 range and that's where we
also find some favorable ATM call premiums. This play has a high
probability of success with a small initial debit.

PLAY (conservative/neutral spread):

BUY  (5)  CALLS APR-100 EMB-DT OI=2245 A=$10.50
SELL (10) CALLS APR-105 EMB-DA OI=2084 B=$7.50
BUY  (5)  CALLS APR-110 EMB-DB OI=2040 A=$5.62
INITIAL NET DEBIT TARGET=$0.87 ROI(max)=470%
UPSIDE B/E=109.12 DOWNSIDE B/E=100.87

Chart = http://quote.yahoo.com/q?s=EMC&d=3m
******************************************************************
AAMB - Amresco Inc.  $10.25     *** Big Gap Friday ***

AMRESCO conducts diversified financial services and specializes in
real estate and commercial finance. AMRESCO's commercial mortgage
banking subsidiaries include Holliday Fenoglio Fowler, the second
largest commercial mortgage banker in the US. About 40% of their
revenues come from residential mortgage banking services. AAMD's
asset management and commercial mortgage banking activities each
account for about 25% of sales. AMRESCO also provides commercial
financing, mostly to fast-food restaurant franchises. The company
has offices in the US, the UK, and Canada, along with a joint
venture in Mexico for asset acquisition and loan management.

The "buy-out" rumors are back and some investors think they may
have some merit. The problem is; this kind of cycle has occured
before and the stock made basically the same movements, (gap-up
with the rumor, followed by a new downward slide as speculation
fades). Most of the analysts think that the company is a good
"take-over" target but not quite yet. After a very poor quarterly
earnings announcement, interested parties may wait for signs of
financial improvement before making an offer.

PLAY (speculative/credit spread):

BUY  CALL MAR-15.00 UKQ-CC OI=984  A=$0.25
SELL CALL MAR-12.50 UKQ-CV OI=2779 B=$0.62
INITIAL NET CREDIT TARGET=$0.43 ROI=20%

Chart = http://quote.yahoo.com/q?s=AMMB&d=3m
******************************************************************
CAH - Cardinal Health  $73.93     *** Technicals Only ***

Cardinal Health is the 2nd largest US wholesaler of pharmaceutical,
surgical and hospital supplies, therapeutic plasma, and specialty
health and beauty products. Its customer support services include
computerized order entry and confirmation systems; invoicing and
generic sourcing programs; product movement/management reports and
consultation on store operation and merchandising. Its subsidiary;
Medicine Shoppe, is the largest franchisor of independent retail
pharmacies. Their R.P. Scherer unit is the top producer of gelatin
capsules for drugs and subsidiary Allegiance is the top US medical
products distributor.

Cardinal Health reported favorable earnings in late January and
concluded their merger with Allegiance early last month. They also
declared a regular third quarter cash dividend of $0.025 per share
payable on 4/15/1999 to shareholders of record as of 4/1/1999.

With nothing else to offer in the short-term, we don't see any
reason for this stock to have a significant change in character
over the next two weeks.

PLAY (conservative/credit spread):

BUY  CALL MAR-85 CAH-CQ OI=34  A=$0.25
SELL CALL MAR-80 CAH-CP OI=213 B=$0.75
INITIAL NET CREDIT TARGET=$0.56 ROI=12%

Chart = http://quote.yahoo.com/q?s=CAH&d=3m
******************************************************************
ACAI - Atlantic Coast Airlines  $31.62     *** Technicals Only ***

Atlantic Coast Airlines operates as part of United Express under
an agreement with United Airlines. The regional carrier has its
hub at Washington-Dulles International Airport. Its fleet (six
regional jets and 61 turboprop aircraft) provides service to 45
cities in 19 eastern US states. The United Express agreement
gives passengers easy inter-airline connections and ACAI has a
similar partnership with Lufthansa.
 
The company recently announced preliminary passenger traffic
results for February 1999. The company generated 65.7 million
revenue passenger miles (RPMs), a 50.7% increase over the same
month last year. The carrier's load factor was 51.4% vs. 48.7%
and they had 42.2% more passengers than in the same period last
year.
 
Fourth quarter earnings were favorable. Net income increased
152% to $7.7 million and earnings per share increased 112% to
$0.36 (vs. $0.17) and cost per ASM decreased 17.5%. That's great
news right? Why doesn't the stock price reflect this growth?

The short-term technicals (neutral/mildly bullish on decreasing
volume and resistance at $35-$36) make this play favorable.

PLAY (conservative):
BUY  CALL MAR-40 QKA-CH OI=14 A=$0.25
SELL CALL MAR-35 QKA-CG OI=24 B=$0.87
INITIAL NET CREDIT TARGET=$0.68 ROI=15%

Chart = http://quote.yahoo.com/q?s=ACAI&d=3m
******************************************************************
AAS - Amerisource Health  $76.93     *** Split Run? ***

AmeriSource is the #4 wholesale distributor of pharmaceuticals
and health care products to hospitals, managed care facilities,
drugstores, nursing homes, clinics, supermarkets, and other mass
merchandisers across the US. It also provides advertising and
private-label product lines to 2,500 independent and small chain
drugstores in its Family Pharmacy program. AmeriSource had agreed
to be purchased by top distributor McKesson (now McKesson HBOC),
but government opposition killed that deal.

AmeriSource shareholders recently approved a two-for-one stock
split of its Class A common stock. Shareholders of record March 3
will receive certificates for additional shares on March 24. The
company also will increase the number of common shares to 100
million from 50 million, and will reserve them for financing
acquisitions and stock incentives.

The split play is a concern but with the recent failure near $80
and the short-term MA still moving lower, we think this stock has
a good chance of finishing below the sold strike. However, we
will approach Monday morning with a bullish outlook and plan to
leg into this spread. Traders can buy the long position first and
hope to sell it back for a small profit on a rally. If the stock
shows weakness, sell the MAR80 Call to create the credit spread.

PLAY (aggressive/credit spread):

BUY  CALL MAR-85 AAS-CQ OI=36 A=$0.81
SELL CALL MAR-80 AAS-CP OI=86 B=$1.62
INITIAL NET CREDIT TARGET=$0.87 ROI=22%

Chart = http://quote.yahoo.com/q?s=AAS&d=3m


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                      DISCLAIMER
*************************************************************
This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
a qualified professional before trading in any security. The 
information provided has been obtained from sources deemed 
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely 
information to its subscribers but cannot guarantee specific 
delivery times due to factors beyond our control.





The Option Investor Newsletter            3-7-99
Sunday                6  of  6

******************************************************************
COVERED CALL SECTION
******************************************************************
Covered Calls on LEAPS...

LEAPS can be an ideal investment medium for the option trader who
expects long-term growth in an underlying stock but does not want
to make the substantial capital outlay required for entering a
long-term position in the stock. With expiration dates months or
even years in the future, time decay occurs very slowly for LEAPS.
Buying LEAPS is an effective way to benefit from a stock's price
movement without incurring the risk associated with an outright
stock purchase. It is also an excellent option strategy that finds
the happy medium between aggressive, short-term option trading and
an outright purchase of the underlying issue.

Covered call writing is a stock options trading strategy that some
investors use when they are looking for a conservative risk/return
profile, while maintaining a meaningful profit potential in either
bullish or bearish market environments. An investor will generally
want to write a covered call to generate income, collecting the
premium for the sale of the option against a stock in his or her
portfolio. This strategy can also be used with LEAP options but it
differs because it does not involve the ownership of shares of the
underlying stock; the LEAP is substituted for the long position.

The strategy is basically a calendar spread...

Calendar spreads (time spreads) involve the sale of one option and
the purchase of a more distant option, generally both with the same
strike price. The basic strategy implies a NEUTRAL philosophy based
on the fact that TIME will erode the value of the near-term option
at a faster rate than it will the far-term option. The additional
benefit comes from writing calls against the long position each
month, thus lowering the overall cost basis of the LEAP.

Ideally, the investor would like to have the stock price finish
just below the sold strike price when the near-term call expires.
However, if the short-term position is in-the-money the LAST day of
the strike, you just buy it back so that you DON'T have to exercise
the LEAP to cover your obligation (that would defeat the purpose of
the strategy!) At the beginning of each new strike period, you sell
the next month's call to further reduce your overall cost basis.

Larry McMillan's book, "Options as a Strategic Investment" has
excellent information on Covered-Calls with LEAPS...Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (2 weeks to March strike date)
******************************************************************
Stock  Price  Last   Mon  Strike  Opt     Profit   ROI   Monthly
Sym    Picked Price       Price   Bid     /Loss          ROI

CCMC   10.69  14.50   Mar  10.00  1.69  *$  1.00  11.1%  16.1%
ESPI    5.38   8.25   Mar   5.00  1.06  *$  0.68  15.7%  13.7%
BTC    14.50  14.94   Mar  15.00  0.81   $  1.25   9.1%  13.2%
BAMM   11.81  10.06   Mar  10.00  3.13  *$  1.32  15.2%  13.2%
NXTR   10.38  18.56   Mar  10.00  1.44  *$  1.06  11.9%  12.9%
ZD     16.94  18.75   Mar  15.00  3.38  *$  1.44  10.6%  11.5%
GADZ    7.69   7.45   Mar   7.50  0.94   $  0.70  10.4%  11.3%
ARTT    8.00   8.50   Mar   7.50  1.50  *$  1.00  15.4%  11.1%
PDQ    10.31   9.69   Mar  10.00  1.25   $  0.63   7.0%  10.1%
CRCL   17.25  17.50   Mar  17.50  0.81   $  1.06   6.4%   9.3%
POSS   11.00  12.00   Mar  10.00  1.50  *$  0.50   5.3%   7.6%
CNXT   17.06  18.69   Mar  15.00  2.75  *$  0.69   4.8%   7.0%
IGEN   28.50  31.13   Mar  25.00  5.00  *$  1.50   6.4%   6.9%
BVSN   40.00  50.25   Mar  35.00  7.50  *$  2.50   7.7%   6.7%
NIN    22.63  22.38   Mar  20.00  3.50  *$  0.87   4.5%   6.6%
PPOD    9.13   7.50   Mar   7.50  2.13   $  0.50   7.1%   6.2%
CIEN   22.44  25.25   Mar  20.00  3.50  *$  1.06   5.6%   6.1%
CTYA   33.63  39.00   Mar  30.00  5.13  *$  1.50   5.3%   5.7%
WKR    17.88  19.63   Mar  17.50  1.25  *$  0.87   5.2%   5.7%
BTIM   16.63  16.63   Mar  12.50  4.88  *$  0.75   6.4%   5.5%
CLST   12.31  11.38   Mar  10.00  3.00  *$  0.69   7.4%   5.4%
XYLN   19.94  36.25   Mar  17.50  3.25  *$  0.81   4.9%   5.3%
BYND   28.00  24.25   Mar  20.00  9.50  *$  1.50   8.1%   5.0%
ITVU   22.75  19.75   Mar  17.50  6.00  *$  0.75   4.5%   4.9%
CKFR   30.56  33.50   Mar  25.00  6.88  *$  1.32   5.6%   4.8%
MYLX   11.88  12.63   Mar   7.50  4.75  *$  0.37   5.2%   3.8%
SRCM   21.06  16.56   Mar  17.50  5.00   $  0.50   3.1%   2.7%
GYMB   10.50   8.94   Mar  10.00  1.06   $ -0.50  -5.3%   0.0%
SNAP** 19.25  11.75   Mar  15.00  5.13   $ -2.37 -16.8%   0.0%

ALKS: Dropped (now profitable - Murphy's Law)
LGND: Dropped (continues to show weakness)

** SNAP: You may consider closing this play. The stock price
   dropped significantly after Lilly delayed Phase III trials on
   SNAP's migraine compound to collect additional information to
   help assess the safety and tolerability of the compound.

-ROI is equal to the profit (or loss) divided by the cost-basis.
 Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Margin is not used in any calculations.
-Profit/Loss Column: Asterisk indicates stock price above strike 
 price and should be called.  Stock that will not be called is 
 assumed sold at current price (for tracking purposes).
                    *** LOSING PLAYS ***
Determining when to exit a play is a matter of personal preference
but we strongly recommended closing any play that falls more than
20% below the initial cost-basis. Some positions may eventually
become profitable but it is generally more productive to exit a
losing play and move your capital into another prospective trade.
******************************************************************
NEW PICKS   
******************************************************************
Definitions:
OI - Open Interest
CB - Cost Basis (Prc pd - Prm rec'd = CB, the break-even point)
RC  - Return Called
RNC - Return Not Called (Stock Price Unchanged)
******************************************************************
Sequenced by Company
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

AMMB   10.25  Mar 10.00  UKQ CB  1.44  2393   8.81  13.51%  13.51%
ARTT    8.63  Mar  7.50  AOQ CU  1.50  859    7.13   5.19%   5.19%
BTC    15.25  Mar 15.00  BTC CC  0.81  315   14.44   3.88%   3.88%
COOL   19.06  Mar 17.50  QOO CW  2.63  167   16.43   6.51%   6.51%
DIGE    6.44  Mar  5.00  QDG CA  1.69  10     4.75   5.26%   5.26%
USWB   37.13  Mar 35.00  QWB CG  3.38  1537  33.75   3.70%   3.70%
------------------------------------------------------------------
MCHM    9.75  Apr  7.50   QQ DU  2.88  70     6.87   9.17%   9.17%
MTIC    5.88  Apr  5.00  QTX DA  1.44  79     4.44  12.61%  12.61%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

AMMB   10.25  Mar 10.00  UKQ CB  1.44  2393   8.81  13.51%  13.51%
COOL   19.06  Mar 17.50  QOO CW  2.63  167   16.43   6.51%   6.51%
DIGE    6.44  Mar  5.00  QDG CA  1.69  10     4.75   5.26%   5.26%
ARTT    8.63  Mar  7.50  AOQ CU  1.50  859    7.13   5.19%   5.19%
BTC    15.25  Mar 15.00  BTC CC  0.81  315   14.44   3.88%   3.88%
USWB   37.13  Mar 35.00  QWB CG  3.38  1537  33.75   3.70%   3.70%
------------------------------------------------------------------
MTIC    5.88  Apr  5.00  QTX DA  1.44  79     4.44  12.61%  12.61%
MCHM    9.75  Apr  7.50   QQ DU  2.88  70     6.87   9.17%   9.17%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

                   SAME AS ABOVE...ALL PLAYS ITM
******************************************************************
Company Descriptions
******************************************************************
AMMB - Amresco Inc.  $10.25     *** Big Gap Friday ***

AMRESCO conducts diversified financial services and specializes in
real estate and commercial finance. The "buy-out" rumors are back 
and some investors think they may have some merit. This usually
spikes some interest (option premiums) followed by a slow drop in
price. The stock has slowly been working up through a stage one 
base with consolidations between the rumors. This is a two week
speculation play on the price remaining above our cost basis.

Mar 10.00 UKQ-CB Bid=1.44 OI=2393 CB=8.81 RC=13.51% RNC=13.51% 

Chart = http://quote.yahoo.com/q?s=AMMB&d=3m
******************************************************************
ARTT - Advanced Radio Telecom  $8.63  *** Technical Play ***

ARTT provides wireless broadband telecommunications services 
using microwave transmissions throughout the U.S. ARTT posted
a 4Q loss of $0.57 (vs. loss of $1.12) which appears mainly due
to cost-cutting. Recent volume surge with BOP indicating "buying
pressure" and a reversal signal in mid-February make this an
interesting play.

Mar 7.50 AOQ-CU Bid=1.50 OI=859 CB=7.13 RC=5.19% RNC=5.19% 

Chart = http://quote.yahoo.com/q?s=ARTT&d=3m
******************************************************************
BTC - BancTec  $15.25     *** Still Bullish a Chart ***

BancTec markets electronic processing systems and services for
financial transaction documentation. BancTec also makes software
for electronically processing credit, debit, and courtesy cards 
for electronic check authorization. No change in outlook from last
week's write up and the chart is still very bullish. This week we
chose a more conservative (in-the-money) recommendation as the
stock is over extended. A good return for two weeks with excellent
long term prospects.

Mar 15.00 BTC-CC Bid=0.81 OI=315 CB=14.44 RC=3.88% RNC=3.88% 

Chart = http://quote.yahoo.com/q?s=BTC&d=3m
******************************************************************
COOL - Cyberian Outpost  $19.06     *** Internet Commerce ***

Cyberian Outpost uses the Internet to sell name-brand computer
hardware and software to consumers and small businesses. Almost
half of Cyberian's sales come from international customers and
COOL has translated its Web site into 12 foreign languages and
offers online currency-conversion information. The stock raced
$6 higher last Wednesday after it said fiscal Q4 revenues are
expected to be around $33 million, about four times the year ago
level. The company plans to report in the first week of April
and we think the recent base near $17 provides enough support
to make this play favorable speculation for two weeks.

Mar 17.50 QOO-CW Bid=2.63 OI=167 CB=16.43 RC=6.51% RNC=6.51% 

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
******************************************************************
DIGE - Digene Corporation  $6.44  *** Technicals ***

Digene Corporation develops, manufactures and markets DNA testing
systems for the screening, monitoring and diagnosis of human 
disease. Digene dropped after their 2Q EPS loss increased by $0.02
but has since rebounded creating an ascending triangle formation.
BOP reversed at the end of January creating a positive divergence
from price. This play appears to have long term possibilities but
we will stay with the short term speculation for now...

Mar 5.00 QDG-CA Bid=1.69 OI=10 CB=4.75 RC=5.26% RNC=5.26% 

Chart = http://quote.yahoo.com/q?s=DIGE&d=3m
******************************************************************
USWB - USWeb  $37.13  *** Classic Stage II ***

USWeb provides Internet professional services including strategy 
consulting, analysis and design, technology development,
implementation and integration, audience development and 
maintenance. USWB has continued to climb after merging with CKS 
Group, bouncing off its 30 dma along the way. On the 3/2, Legg
Mason initiated coverage with an "outperform" which may be the
catalyst needed to push USWB above resistance at $39.50.
(Note: The merger has created two different option tickers.)

Mar 35.00 QWB-CG Bid=3.38 OI=1537 CB=33.75 RC=3.70% RNC=3.70% 

Chart = http://quote.yahoo.com/q?s=USWB&d=3m
******************************************************************
                       APRIL POSITIONS
******************************************************************
MCHM - MacroChem  $9.75   *** Drug Patent Approved ***

MacroChem is developing transdermal drug-delivery systems, which
allow drugs to be absorbed through the skin. MCHM is trying to
attract business partners by applying its SEPA (Soft Enhancer of
Percutaneous Absorption) system to FDA-approved drugs. They are
testing its use with drugs used to treat impotence (Topiglan),
testosterone deficiency, arthritis pain, and skin conditions.
A recent "notice of allowance" from the US Patent Office for the
drug TOPLIGAN drew interest from major drug manufactures. A rumor
of a buy-out surfaced, the stock is in demand at the institutional
level and new brokerage upgrades are expected soon.

APR 7.50 QQ-DU Bid=2.88 OI=70 CB=6.87 RC=9.17% RNC=9.17% 

Chart = http://quote.yahoo.com/q?s=MCHM&d=3m
******************************************************************
MTIC - MTI Technology Corp.  $5.88  *** Technical Play ***

MTIC designs, manufactures, markets and services data storage 
solutions including solid state disk systems, fault tolerant
RAID disk arrays, tape libraries and storage management software.
With a short term head-and-shoulders bottom apparent and the
recent positive crossover of the 30 and 150 dma's, this has good
long term potential. Our cost basis is near recent support and
below the 150 dma.

APR 5.00 QTX-DA Bid=1.44 OI=79 CB=4.44 RC=12.61% RNC=12.61% 

Chart = http://quote.yahoo.com/q?s=MTIC&d=3m


*************************************************************
CALLS STRICTLY PERCENTAGE LIST
*************************************************************
These Pct are not calculated using margin. These are pure 
returns. Margin will increase the percentages. No recommendation
is made on these plays. This is only a numerically produced list 
of the options with the highest percentage of return for dollars
invested. If you want to do your own research this is where to 
start.

Stock Price Month Strike Symbol Price PctRtn Vol OpnInt
MCHM    9.75 Apr  10.00  QQDB   1.63  16.67  108  288
BD     11.94 Apr  12.50  BDDV   1.88  15.71  172  392
FINL   12.19 Apr  12.50 FQNDV   1.88  15.38   12   82
SEV     4.88 Apr   5.00 SEVDA   0.75  15.38   80  148
ASPT    7.44 Apr   7.50 ATQDU   1.13  15.13    5   43
PTVL   22.38 Apr  22.50 QUTDX   3.38  15.08   79  965
PPOD    7.50 Apr   7.50 QPPDU   1.13  15.00  135  233
BNYN    9.88 Apr  10.00 QYNDB   1.44  14.56   11  712
CYCH   12.13 Apr  12.50 KBQDV   1.75  14.43    6 1036
GHV     4.88 Apr   5.00 GHVDA   0.69  14.10   10   15
ERTH    9.75 Apr  10.00 QERDB   1.38  14.10  126  323
Z       4.50 Apr   5.00   ZDA   0.63  13.89   10  513
GELX   18.56 Apr  20.00 GQXDD   2.56  13.80   13  100
ABTE    6.81 Apr   7.50 QZBDU   0.94  13.76  118  308
LDRY    5.00 Apr   5.00 YQRDA   0.69  13.75    5  614
ZD     18.75 Apr  20.00  ZDDD   2.50  13.33  348 1084
THQI   19.31 Apr  20.00 QHIDD   2.56  13.27   12   20
ARTT    8.50 Apr  10.00 AOQDB   1.13  13.24  165  135
PLC     3.81 Apr   5.00 PLCDA   0.50  13.11  100 1937
BTIM   16.63 Apr  17.50 QBODW   2.13  12.78    5  168
ROMC    8.88 Apr  10.00 RPQDB   1.13  12.68  170   22
IM     19.81 Apr  20.00  IMDD   2.50  12.62   46   26
GADZ    7.45 Apr   7.50 EQKDU   0.94  12.58  213  130
PILL   10.00 Apr  10.00 PQQDB   1.25  12.50   10  155
TRA     5.00 Apr   5.00 TRADA   0.63  12.50   10  139
SDTI   17.38 Apr  17.50 QSDDW   2.13  12.23    3  164
ESPI    8.25 Apr  10.00  AQDB   1.00  12.12  383   55
DRMD    6.75 Apr   7.50 DUQDU   0.81  12.04   30  200
ENMD   20.38 Apr  22.50 QMADX   2.44  11.96    1   56
DAOU    5.75 Apr   7.50 QQXDU   0.69  11.96  211  465
NTKI   12.19 Apr  12.50 QNKDV   1.44  11.79   34  303
FFD     7.44 Apr   7.50 FFDDU   0.88  11.76    8   25
DDIM    4.78 Apr   5.00  QMDA   0.56  11.76    5   34
PTEK    9.63 Apr  10.00 TQODB   1.13  11.69   99  281
ABTX    3.75 Apr   5.00 QXQDA   0.44  11.67   79  525
MCOM    5.94 Apr   7.50 MQMDU   0.69  11.58   20  644
PCTY    9.31 Apr  10.00 TYQDB   1.06  11.41   25   10
INPR    4.94 Apr   5.00 BLQDA   0.56  11.39    8  604
SQNT    9.88 Apr  10.00 SQQDB   1.13  11.39   34  236
DGN    12.13 Apr  12.50 DGNDV   1.38  11.34   15   55
MTSN    7.19 Apr   7.50 QQMDU   0.81  11.30    5   94
BOCI    3.88 Apr  10.00 BQCDB   0.44  11.29    4  122
FORE   14.50 Apr  15.00 FQODC   1.63  11.21   98 1939
FGCI    6.69 Apr   7.50 JZQDU   0.75  11.21   13  256
PTVL   22.38 Apr  25.00 QUTDE   2.50  11.17   28  637
APM     3.94 Apr   5.00 APMDA   0.44  11.11  14012638
MTZ    24.75 Apr  25.00 MTZDE   2.75  11.11    5  847
VTS     9.00 Apr  10.00 VTSDB   1.00  11.11  530  136
SBTK   19.13 Apr  20.00 XQYDD   2.13  11.11   20   85
SYMC   17.50 Apr  17.50 SYQDW   1.94  11.07   20  665
CDN    23.25 Apr  25.00 CDNDE   2.56  11.02   10   84
EXCA   11.38 Apr  12.50 XQADV   1.25  10.99   30    5
POSS   12.00 Apr  12.50 UPQDV   1.31  10.94    7  457
CFN     3.44 Apr   5.00 CFNDA   0.38  10.91   10   30
OMKT   11.50 Apr  12.50 OQMDV   1.25  10.87  252  386
ZAP     8.75 Apr  10.00 ZAPDB   0.94  10.71    6   89
PDX    23.94 Apr  30.00 PDXDF   2.56  10.70  102  131
CORR    9.38 Apr  10.00 CHQDB   1.00  10.67   50  216
VICL   12.38 Apr  12.50 VAQDV   1.31  10.61    8   10
PDLI   16.06 Apr  17.50 PQIDW   1.69  10.51   20   22
AVID   29.88 Apr  30.00 AQIDF   3.13  10.46   15   26
MMWW   16.75 Apr  17.50 EQBDW   1.75  10.45   42   47
KOSP    4.19 Apr   5.00 KQWDA   0.44  10.45   40   20
PSSI   12.00 Apr  12.50 PYQDV   1.25  10.42   36   63
PDQ     9.69 Apr  10.00 PDQDB   1.00  10.32   35  856
CDE     4.88 Apr   5.00 CDEDA   0.50  10.26   24   35
PAGE    4.88 Apr   5.00 PGQDA   0.50  10.26  110  277
WAXS    7.31 Apr   7.50 WXQDU   0.75  10.26   39  365
CDT    12.25 Apr  12.50 CDTDV   1.25  10.20    4    5
AWA    17.25 Apr  17.50 AWADW   1.75  10.14   20  488
ALYD    8.63 Apr  10.00 QLIDB   0.88  10.14   10  113
TALK    8.63 Apr  10.00 QQKDB   0.88  10.14  114 4679
SPGLA   7.44 Apr   7.50 SQEDU   0.75  10.08   71   70
ASYT   17.38 Apr  17.50 QQYDW   1.75  10.07   20   20
DANKY   4.97 Apr   5.00 DNQDA   0.50  10.06    5   47
ESV     9.94 Apr  10.00 ESVDB   1.00  10.06  585 1317
PROX   27.38 Apr  30.00 WQGDF   2.75  10.05   18   85
PDX    23.94 May  25.00 PDXEE   5.88  24.54   10   62
Z       4.50 May   5.00   ZEA   0.88  19.44   10  998
AND     7.00 May   7.50 ANDEU   1.31  18.75    5  320
FGCI    6.69 May   7.50 JZQEU   1.25  18.69   30  263
OFIS    4.50 May   5.00 OFQEA   0.81  18.06    2  329
OMKT   11.50 May  12.50 OQMEV   2.06  17.93   15  829
ARTT    8.50 May  10.00 AOQEB   1.50  17.65   33  407
SPGLA   7.44 May   7.50 SQEEU   1.31  17.65   20  128
DANKY   4.97 May   5.00 DNQEA   0.88  17.61   25 1925
CBTSY  14.56 May  15.00 QAGEC   2.50  17.17    5  221
WAVO    5.94 May   7.50 WKQEU   1.00  16.84    8  534
CDE     4.88 May   5.00 CDEEA   0.81  16.67   12  486
GMGC    4.53 May   5.00 GGQEA   0.75  16.55   23 2607
BD     11.94 May  12.50  BDEV   1.88  15.71   10   45
HAIN   17.50 May  17.50 QQHEW   2.69  15.36   53  167
WIRE    9.50 May  10.00 QWREB   1.44  15.13   15  231
PDLI   16.06 May  17.50 PQIEW   2.38  14.79   10   47
IMRS   16.06 May  17.50 QIQEW   2.38  14.79   10   95
NOI     9.88 May  10.00 NOIEB   1.44  14.56   48  216
CPU     6.38 May   7.50 CPUEU   0.88  13.73  334   31
ACF    11.94 May  12.50 ACFEV   1.63  13.61   10  205
OMPT   10.13 May  12.50 QTTEV   1.38  13.58   80  312
CLST   11.38 May  12.50 EQLEV   1.50  13.19   10  242
SGO     4.75 May   5.00 SGOEA   0.63  13.16   10  250
ALYD    8.63 May  10.00 QLIEB   1.13  13.04    5  434
CDN    23.25 May  25.00 CDNEE   3.00  12.90    1  812
MCLL    3.94 May   5.00 LQLEA   0.50  12.70   35   98
VICL   12.38 May  12.50 VAQEV   1.56  12.63    5   11
SAVLY  15.88 May  17.50 QVYEW   2.00  12.60   23   44
SMMT    4.00 May   5.00 DQBEA   0.50  12.50   10  120
PCMS    6.00 May   7.50 PQPEU   0.75  12.50   23 1764
CLCX    6.00 May   7.50 QXTEU   0.75  12.50   29  663
KEA    28.81 May  30.00 KEAEF   3.50  12.15    6  434
PETM    7.22 May   7.50 PQMEU   0.88  12.12   10  182
QMDC   11.44 May  15.00 QCDEC   1.38  12.02   24    6
INVX   14.63 May  15.00 IVQEC   1.75  11.97    5  108
QNTM   20.00 May  20.00 QNQED   2.38  11.88   13  901
TSK    21.06 May  22.50 TSKEX   2.50  11.87    1    3
TAVA    5.88 May   7.50 QTVEU   0.69  11.70    3 1159
TQNT   18.19 May  20.00 TQNED   2.13  11.68   20  107
ITWO   28.25 May  30.00  JQEF   3.25  11.50   14  439
RIG    22.00 May  22.50 RIGEX   2.50  11.36   26  338
STRX   10.19 May  12.50 TQQEV   1.13  11.04   10  548
OLOG    9.13 May  10.00 OOQEB   1.00  10.96   20    4
PSSI   12.00 May  12.50 PYQEV   1.31  10.94   18  150
IFMX    9.25 May  10.00 IFQEB   1.00  10.81   85 2505
BGP    13.56 May  15.00 BGPEC   1.44  10.60    5  226
UCP     6.50 May   7.50 UCPEU   0.69  10.58   10  285
PMTC   15.00 May  15.00 PMQEC   1.56  10.42   10  985
OMKT   11.50 May  15.00 OQMEC   1.19  10.33   25  604
CPWR   25.50 May  27.50 CWQEY   2.63  10.29   12  253
RXSD   17.00 May  17.50 RKQEW   1.75  10.29   82  655
ALKS   30.00 May  30.00 QALEF   3.00  10.00   12  249





************************************************************
NAKED PUT SECTION - More Technical Indicators...
************************************************************
Relative Strength Indicator...

The RSI is a momentum indicator which measures a stocks price
with relation to its past performance. It is front weighted thus
it reflects a better velocity reading than other indicators and
is less affected by sharp rises or drops in the stock's price.
The best characteristic of this indicator is that it filters out
some of the noise in the stock's trading activity.

RSI's absolute levels are 0 and 100. Traditionally, buy signals
are indicated at 20 to 30, and sell signals are triggered at 70
to 80 but these numbers will vary somewhat depending on the
number of days used in the calculation. A shorter span of time
will result in a more volatile indicator with extreme values
while a longer period results in a less volatile reading with
fewer extreme indications.

Some analysts use the RSI indicator to compare multiple equities
against each other but that is not an infallible system. Some
stocks may retreat when their RSI indicator reaches one number
while others react at slightly different levels. However, these 
levels are still relatively close to each other and the majority 
change direction near 30 and 70.

RSI is a momentum indicator that can indicate changes ahead of
price movements because the RSI treats price as a rubber band. 
The rubber band can be stretched to a certain point, and unless
it breaks, the rubber band will contract. RSI also works well 
with trendlines, support and resistance lines, and divergence.

One of the best characteristics of the RSI is the indication
that is given when there is a divergence between price action and
the RSI. When you observe an upwardly sloping price and downward
sloping RSI, this generally indicates that price is about to move
lower. The reverse is true for downward sloping price and upward
sloping RSI. Learn more about technical indicators like RSI in 
"Technical Analysis from A to Z" by Steven B. Achelis.
------------------------------------------------------------------
                      *** WARNING!!! ***
Occasionally a company will experience catastrophic news causing
a severe drop in the stock price. This may cause a devastatingly
large loss which may wipe out all of your smaller gains. There is
one very important rule; Don't sell naked puts on stocks that you
don't want to own! It is also important that you consider using
trading STOPS on naked option positions to help limit losses when
the stock price drops. Many professional traders suggest closing
the position when the stock price falls below the sold strike or
using a buy-to-close STOP at a price that is no more than twice
the original premium from the sold option.
******************************************************************
SUMMARY OF PREVIOUS PICKS 
******************************************************************
Stock  Price  Last   Mon  Strike  Opt     Profit   ROI   Monthly
Sym    Picked Price       Price   Bid     /Loss          ROI

HRBC    7.25   6.00   Mar   5.00  0.31  *$  0.31  17.6%  19.1%
EGRP   46.06  45.75   Mar  35.00  2.13  *$  2.13  18.8%  16.3%
SDLI   54.50  64.63   Mar  45.00  1.38  *$  1.38  10.1%  14.6%
OMKT   12.69  11.50   Mar  10.00  0.38  *$  0.38  13.0%  14.1%
DRMD    6.75   6.75   Mar   5.00  0.25  *$  0.25  15.6%  13.6%
BTC    14.50  14.94   Mar  12.50  0.38  *$  0.38   9.1%  13.2%
DLP    32.56  33.44   Mar  25.00  0.63  *$  0.63   8.8%  12.8%
ZD     16.94  18.75   Mar  12.50  0.44  *$  0.44  11.5%  12.5%
CLST   10.94  11.38   Mar   7.50  0.25  *$  0.25  10.2%  11.1%
PRD    24.25  22.81   Mar  20.00  0.44  *$  0.44   7.5%  10.8%
IGEN   28.50  31.13   Mar  22.50  0.63  *$  0.63  10.0%  10.8%
OXHP   19.00  17.56   Mar  17.50  0.44  *$  0.44   6.7%   9.7%
CIEN   22.44  25.25   Mar  17.50  0.44  *$  0.44   8.9%   9.7%
BVSN   40.00  50.25   Mar  30.00  1.00  *$  1.00  11.1%   9.7%
THQI   23.25  19.31   Mar  15.00  0.69  *$  0.69  12.9%   9.4%
CIEN   27.81  25.25   Mar  22.50  0.38  *$  0.38   6.1%   8.9%
ITVU   22.75  19.75   Mar  15.00  0.38  *$  0.38   7.7%   8.4%
CIEN   24.19  25.25   Mar  17.50  0.63  *$  0.63  11.5%   8.3%
PSUN   27.00  30.31   Mar  20.00  0.69  *$  0.69  11.3%   8.2%
GLIA   27.00  26.50   Mar  20.00  0.31  *$  0.31   5.4%   7.9%
ZONA   32.25  32.00   Mar  25.00  0.75  *$  0.75  10.4%   7.5%
BTIM   16.63  16.63   Mar  10.00  0.25  *$  0.25   7.0%   6.1%
AVID   30.00  29.88   Mar  22.50  0.44  *$  0.44   6.8%   5.9%
CATP   30.00  24.75   Mar  22.50  0.44  *$  0.44   6.8%   5.9%
SUIT   32.00  24.50   Mar  25.00  0.88   $  0.38   5.2%   3.8%

AWA: Dropped (They turned-down the "buyout" offer!)

-ROI is equal to the profit (or loss) divided by the original
 investment requirement (varies broker to broker). 
-Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Profit/Loss Column: Asterisk indicates stock price above strike
 price and put option should expire - not be exercised.  Stock 
 to be exercised assumed sold at current price.(for tracking)
******************************************************************
NEW PICKS
******************************************************************
Definitions:
OI  - Open Interest
CB  - Cost Basis (break-even point if put exercised) 
ROI - Return On Investment - formula: premium received divided by
the collateral required by the broker (the greater of 40% of the
current price of the stock plus the premium, minus the difference
between the cost of the stock and the strike price; or 20% of the 
current price of the stock plus the premium.) As you move further
from the stock price, the 20% requirement will take precedence.
ROI may vary based on equity required by each individual broker.
******************************************************************
Sequenced by Company
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

COOL   19.06  Mar 15.00  QOO OC  0.50  183   14.50  11.60%
ENMD   20.44  Mar 17.50  QMA OW  0.63  178   16.87  10.74%
LUK    30.50  Mar 25.00  LUK OE  0.25  150   24.75   3.60%
NAV    45.00  Mar 40.00  NAV OH  0.63  426   39.37   4.62%
PSIX   37.88  Mar 35.00  SQP OG  1.00  237   34.00   7.53%
SOF    21.50  Mar 17.50  SOF OW  0.44  355   17.06   8.73%
SPLN   54.06  Mar 40.00  QSP OH  0.38  121   39.62   3.40%
----------------------------------------------------------
MCHM    9.75  Apr  7.50   QQ PU  0.56  0      6.94  22.31%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

COOL   19.06  Mar 15.00  QOO OC  0.50  183   14.50  11.60%
ENMD   20.44  Mar 17.50  QMA OW  0.63  178   16.87  10.74%
SOF    21.50  Mar 17.50  SOF OW  0.44  355   17.06   8.73%
PSIX   37.88  Mar 35.00  SQP OG  1.00  237   34.00   7.53%
NAV    45.00  Mar 40.00  NAV OH  0.63  426   39.37   4.62%
LUK    30.50  Mar 25.00  LUK OE  0.25  150   24.75   3.60%
SPLN   54.06  Mar 40.00  QSP OH  0.38  121   39.62   3.40%
----------------------------------------------------------
MCHM    9.75  Apr  7.50   QQ PU  0.56  0      6.94  22.31%
******************************************************************
Company Descriptions
******************************************************************
COOL - Cyberian Outpost  $19.06     *** Internet Commerce ***

Cyberian Outpost uses the Internet to sell name-brand computer
hardware and software to consumers and small businesses. Almost
half of Cyberian's sales come from international customers and
COOL has translated its Web site into 12 foreign languages and
offers online currency-conversion information. The stock raced
$6 higher last Wednesday after it said fiscal Q4 revenues are
expected to be around $33 million, about four times the year ago
level. The company plans to report in the first week of April
and we think the recent base near $17 provides enough support
to make this play favorable speculation for two weeks.

Mar  15.00 QOO-OC  Bid=0.50  OI=183 CB=14.50 ROI=11.60%

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
******************************************************************
ENMD - Entremed  $20.44     *** Cancer's Silver Bullet? ***

EntreMed develops anti-angiogenic drugs that inhibit the abnormal
growth of new blood vessels. ENMD's anti-angiogenic drugs include
Angiostatin and Endostatin, which have successfully blocked the
growth of blood vessels in cancer tumors. ENMD is also working on
a blood-cell permeation device that could act as a drug delivery
system and has received permission to make the controversial drug
thalidomide to treat AIDS-related cancer. Recently rebounded on
news of venture with Covance Biotechnology to produce angiostatin.
A good speculation play for two-weeks with high risk/reward.

Mar  17.50  QMA-OW  Bid=0.63  OI=178  CB=16.87  ROI=10.74%

Chart = http://quote.yahoo.com/q?s=ENMD&d=3m
******************************************************************
LUK - Leucadia National  $30.50   *** Free Money (almost!) ***

Leucadia National is an investment company engaged primarily in
insurance . The company also operates a plastics division that
makes netting for construction, packaging, and other purposes.
Leucadia is buying a 24% stake in Imperial Credit from Imperial
Bank. If the transaction is closed, Leucadia National would pay
$9.25 per share. The transaction should close by the end of the
first quarter of 1999. We think the speculation of the impending
acquisition will hold the stock price near recent support at $30.

Mar  25.00  LUK-OE  Bid=0.25  OI=150  CB=24.75  ROI=3.60%

Chart = http://quote.yahoo.com/q?s=LUK&d=3m
******************************************************************
NAV - Navistar Intl.  $45.00     *** Own this one! ***

Navistar manufactures "International" heavy-duty trucks, buses,
diesel engines, and replacement parts. It sells its engines to
other truck makers, primarily Ford. Navistar has really gotten
its business in gear over the past few years, increasing return
on equity from 7% in 1996 to 33% in 1998, and the buyout rumors
from Volvo have helped boost Navistar's shares nearly 30% over 
he last two weeks. The technical outlook is bullish with recent
support near $40.

Mar  40.00  NAV-OH  Bid=0.63  OI=426  CB=39.37  ROI=4.62%

Chart = http://quote.yahoo.com/q?s=NAV&d=3m
******************************************************************
PSIX - PSINet  $37.88     *** Internet Services ***

PSINet offers a variety of access services, Web-site design and
hosting, electronic commerce, and security programs. Internet
service companies are being acquired by large Telecom companies,
but PSINet remains independent, focusing instead on expansion.
The company allows other consumer-based ISPs to use its networks
for a fee. IXC Communications owns a 20% stake in the company in
exchange for giving PSINet access to IXC's high-speed digital
phone lines. PSIX was recently upgraded and they just acquired 
two French ISP's. We like the bullish technicals & favorable 
option premium.

Mar  35.00  SQP-OG  Bid=1.00  OI=237  CB=34.00  ROI=7.53%

Chart = http://quote.yahoo.com/q?s=PSIX&d=3m
******************************************************************
SOF - Softnet  $21.50     *** Technicals Only ***

SoftNet Systems has sold its telecommunications subsidiary and is
selling its document management subsidiary to focus on its ISP
channel subsidiary, which provides high-speed Internet access
through existing cable infrastructure. It also offers Internet
access to remote areas through two-way satellite technology from
its Intelligent Communications acquisition. SoftNet's partnership
with Excite provides co-branded directory and search services. We
like the technical support at the cost basis near $17.

Mar  17.50  SOF-OW  Bid=0.44  OI=355  CB=17.06  ROI=8.73%

Chart = http://quote.yahoo.com/q?s=SOF&d=3m
******************************************************************
SPLN - SportsLine USA  $54.06     *** Buy it at $40? ***

SportsLine USA operates "cbs.sportsline.com", providing real-time
sports news. The service covers all sports and includes photos,
audio and video clips, and original Internet broadcast programs.
Other SportsLine Web sites provide information on superstars, odds
and other information on sporting events (vegasinsider.com).
Advertising accounts for more than half of SportsLine's sales and
an affiliation with CBS provides SportsLine with free advertising
during CBS's TV sports broadcasts. Upgraded in early March and a
target prices in the $60-$75 range. We would like to say you will
own this one at $40 but it is very unlikely!

Mar  40.00  QSP-OH  Bid=0.38  OI=121  CB=39.62  ROI=3.40%

Chart = http://quote.yahoo.com/q?s=SPLN&d=3m
******************************************************************
                       APRIL POSITIONS
******************************************************************
MCHM - MacroChem  $9.75   *** Drug Patent Approved ***

MacroChem is developing transdermal drug-delivery systems, which
allow drugs to be absorbed through the skin. MCHM is trying to
attract business partners by applying its SEPA (Soft Enhancer of
Percutaneous Absorption) system to FDA-approved drugs. They are
testing its use with drugs used to treat impotence (Topiglan),
testosterone deficiency, arthritis pain, and skin conditions.
A recent "notice of allowance" from the US Patent Office for the
drug TOPLIGAN drew interest from major drug manufactures. A rumor
of a buy-out surfaced, the stock is in demand at institutional
level and new brokerage upgrades are expected soon.

Apr  7.50  QQ-PU  Bid=0.56  OI=0  CB=6.94  ROI=22.31

Chart = http://quote.yahoo.com/q?s=MCHM&d=3m



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                      DISCLAIMER
*************************************************************
This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
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DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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Option Investor Inc
PO Box 630350
Littleton, CO 80163

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