Option Investor
Newsletter

Daily Newsletter, Sunday, 03/14/1999

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The Option Investor Newsletter            Sunday  3-14-99  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 3-12           WE 3-5          WE 2-26          WE 2-19
DOW     9876.35 +140.27  9736.08 +429.50  9306.58 - 33.37  + 65.06  
Nasdaq  2381.53 + 44.42  2337.11 + 49.08  2288.03 +  4.43  - 38.29  
S&P-100  648.27 +  9.28   638.99 + 20.57   618.42 -  1.85  +  4.13  
S&P-500 1294.59 + 19.12  1275.47 + 37.14  1238.33 -   .86  +  9.06  
RUT      398.38 +   .37   398.01 +  5.75   392.26 -   .04  -  6.14  
TRAN    3267.51 - 45.28  3312.79 +105.36  3207.43 + 72.92  + 37.62  
VIX       25.81            25.12            29.52            30.23
Put/Call    .60              .61              .67              .70
******************************************************************

OOPS! Reality check...


Amid all the Dow 10,000 euphoria on Friday we got a big dose of
reality. The earnings warnings from Rite Aid, Caterpillar, Oracle, 
National Semiconductor and Microsoft (a stealth warning) all added 
up to a splash of cold water on the Dow 10,000 fire. These warnings 
added to the recent cry of soft PC sales has the Nasdaq on the run 
and now the addition of CAT may start another broad sector flight 
from multinational manufacturers. The U.S. investor views the world 
through rose colored glasses. The greening of our bull market has
shaded the true red color of the world economy for many. While we
are still the "oasis of prosperity" as described by Mr. Greenspan,
we are still impacted by world events. The U.S. investor may be
ordering tuxedos and champagne for the Dow 10,000 party but the
majority of the world's economies were not invited.

I think the magic 10,000 number is already in the history book, 
just waiting for the day and hour next week to be penciled in.
Actually, www.bigcharts.com shows the Dow high for the year
as 10,042.58 occurring last Friday. Check it out!
http://www.bigchart.com/intchart/frames/frames.asp?symb=indu

What comes after 10,000 is anybody's guess. Sure everyone says it
is just a number like 9975 or 10050 but I don't hear any party
being planned for either of those. The 10,000 milestone is a
psychological milestone. After we pass it the next milestone
would hopefully be 11,000 as Ralph Acomporaspan has now predicted.
Some of course fear it may be 9,000 instead. The problem, once
we pass 10,000 is the lack of a near term emotional target. The
focus of investors will turn back to the fundamentals of the
stocks and the market itself. This could be a scary thought. The
advance/decline line is still seriously negative. On Friday the
decliners outnumbered advancers 3760 to 3052, or almost 25%.
The Russell-2000 was only up $.37 for the entire week! Where is
the rally?? The transports of course were negative due to the
rising price of oil. In the "you can't have your cake and eat it
too" department, I heard two analysts this weekend claiming that
the rising price of oil was inflationary and Greenspan would be
forced to raise rates if it continued. It was just three weeks
ago that analysts were calling the low price of oil as deflationary
and a serious problem. While the price of oil has definitely helped
the Dow rally this week with XON and CHV soaring, the long term
impact will be to the earnings of many sectors that rely on oil
in some form to run their business.

If PC sales are declining then it is only a matter of time before
we are barraged with another round of earnings warnings. Picture
the carnage if Dell warned, or Intel warned. The last date that
Intel could have warned, according to some analysts, was Friday
so that may not become a reality. Intel has missed numbers in the
past without a warning so we could just be kidding ourselves in
that regard.

Why all the gloom and doom? Entry point, entry point, entry point!
The Dow is up +600 points in the last seven days without a serious
bout of profit taking. Anybody else see a potential problem here?
That is a 6.5% bounce off the 9200 bottom of our recent trading
range. Nothing goes up or down in a straight line. There has to 
be a pause in either direction to release steam and allow for
normal profit taking. Nobody knows for sure but anybody entering
the market here could be entering at or near a short term top.
If you understand the goal to "buy low and sell high" then buying
at the top would be contradictory. Yes, I know, as soon as I say
"market top" Murphy's law will take over and propel us non-stop
to 10,500. But, I believe in the law of averages and the law of
gravity. The law of averages predicts that we will have a pullback
soon. I suggest you wait for that pullback before entering any
new positions.

At the recent seminar I went into detail about the relationship
between the market cycles and stock cycles. It makes no difference
how strong a specific stock pick may be, it will still be impacted
by major market moves. Look at a 90 day chart of the Dow and any
Dow stock, C, GE, MMM, etc. They will be identical. You can actually
lay them over each other and they are identical. The concept here
is very simple. Wait for the market to cycle down before starting
a new play. Wait, wait, I can hear it now..."What if it keeps on
going up"? It may or it may not. Nobody knows. However in the 
history of the market, the number of Dow moves over 600 points,
without a pullback, has got to be almost zero. The only thing
close in recent history was the run in late December when we
were recovering from the dip back to 8700 from the 9450 rally.
We had eight days of positive Dow movement. About +700 points.
We then had three strong profit taking days (-300 points) before
resuming the advance. Would a -300 point Dow drop crimp your
option premiums? Would it provide a great entry point? If I
could ever convince you of only one thing it would be this,
"Never buy options the day after a newsletter". The newsletter
is published the same three days every week. It would be 
impossible for the correct entry points for the market AND each
stock listed to fall on the morning after a newsletter. We try
to list stocks that have a 75% chance or better of making a
strong move within one week. MARKET PERMITTING!! Just because
they are listed does not mean you should blindly rush out and
take a new position that day. Be market conscious!

I got many emails on CMGI this week. Many people were very happy
with the play and VERY happy they did not hold over earnings.
With CMGI -18.13 on Friday it is just another confirmation that
our policy of "never hold over" is the correct strategy. CMGI
went from $122.63 when we picked it on 2/28 to a high of $226.
I spoke with several people at the seminar that had made $40
to $50 per share on their options. Obviously this is an exception
and we would never recommend you hold for the home run. Our
stated policy of +25% to +35% profit and out is the best in
98% of the recommended plays. If you must hold, please use
trailing stops to lock in your profit. I also got emails from
people saying I bought CMGI at $22 and it went to $45 and now
it is $15, what should I do. You know my answer already....
I got several RNWK emails also..$70.13 when picked on 2/28 and
a high since of $109.13.. Way to go guys !!  The Rite Aid put
play was also a big winner, -$16 from the $38.50 pick price to
Fridays close at $22.56.  Just remember that these are exceptions 
and not the rule.

The game plan for the week should be wait and watch. You can
enjoy the fireworks from the sidelines. Better a missed play
than a bad play is our feeling. If we don't get any more warnings
or global events over the weekend then Monday or Tuesday should
be the 10K day. Plan your trades, execute your plan only when
the time is right. 

Good Luck,
Sell too soon.


Jim Brown
Editor


*****************************************************
JIM'S PLAYS		 
*****************************************************
Still holding GADZ. After trading as low as $6.75 last
week it closed at the high of the day on Friday. Rumors
that The Gap (GPS) was going to make an offer of $12
still have not come true. Since I am holding March 
options it appears time to move on.

The seminars are over and I will be back in the hunt
this week. I am looking for an entry point later in the
week and unless we get a convincing one I will not play.

Since I have been listing my trades I have found myself
trying to force trades to have something to show. This
is not the correct plan in my book. I am teaching you
nothing if I can't demonstrate the correct strategy in
real life.

Except for the small GADZ position I am in cash. It 
feels good to be armed and ready. 

Let the combat begin!!


Current positions: 

GADZ - takeover rumor


*****************************************************
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slow@OptionInvestor.com

Please include a phone number where we can contact you
and times available. The slow response times are only
affecting about 5% of our readers. If you will email 
us and answer some non-technical questions you would 
really be helping us.  Thanks
*****************************************************



*********************************************************
Market Sentiment - By Pinnacle Capital Advisors
*********************************************************
* There are nine charts in the Market sentiment section.
* To view these charts visit the "Market Sentiment Section"
* on the website. The size of the charts makes them impossible
* to email.

Keep the Champagne on Ice

As Pinnacle first alerted investors Thursday night (3/11), the 
DOW 10,000 party was cancelled Friday (3/12) by earnings concerns
and a weak Technology sector.  Although the DOW managed to push
as high as 9,958 in early trading, it was unable to hold its
momentum.

More problematic: the Russell 2000 and the Technology sectors are 
beginning to roll over.  This simply means that last week's rally
was led only by a FEW big-cap issues.  As shown by the attached
charts, the generals are leading, but troops are NOT following.
The Russell 2000 is still trading below its 100 and 200-day 
moving average and the Technology sectors have quietly rolled
over and under-performed the S&P 500 - particularly
Semiconductors (SOX), Hardware (XCI), and Software (CWX). 

Pinnacle Capital Advisors remains concerned about interest rates,
market breadth and our Pinnacle Index for the S&P 100.  At OIN's
Seminar last week, Pinnacle talked about how technical and
sentiment analysis can give savvy investors a decided edge. 
Technically, long-term interest rates, one of the market
pillars, have broken their long-term trend and is now trading
above 5.50%.  Next, the advance-decline line has not improved
appreciably during the recent market rallies. 

Finally, with a week remaining until March's expiration, option 
speculators have been betting on a major breakout as evidenced
buy deep out-of-the money (OTM) call options -- at strikes as
high as OEX 700.  This extreme level of optimism, as reflected
by our high Pinnacle Index, suggests that there is HEAVY
overhead market sentiment.  What this means is that the market
is vulnerable to a precipitous sell-off if expectations are NOT
met. 

OEX Deep OTM Call Analysis
*******************************************************
Date                 Open Interest     Change % 
*******************************************************
Friday, March 5             58,085         -
Thursday, March 11          65,569      +12.9%
Friday, March 12            68,675      +18.2%
   


Together, these technical and sentiment Bearish developments may 
preempt the 10,000 party.  As such, we want to encourage
investors to develop a balanced attack.

 

 


 

 
 


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                       (3/12)     (3/16)    (3/16)  Alert
********************************************************************

Pinnacle Index (OEX):          
-----------------------------------------------------------------
Overhead Resistance (650-665)     4.9                           *
Underlying Support  (625-640)     1.6


Put/Call Ratios:
-----------------------------------------------------------------
CBOE Total P/C Ratio               .5
CBOE Equity P/C Ratio              .5                           *   
OEX P/C Ratio                     1.2                           *                


Peak Open Interest (OEX):
-----------------------------------------------------------------
Puts                              625
Calls                             650
P/C Ratio                         1.1


Market Volatility Index (VIX):	
-----------------------------------------------------------------
CBOE VIX                        25.81                           *



Investors Intelligence:
-----------------------------------------------------------------
Bullish                         49.1%                           *  
Bearish                         32.5%                           *
		



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
Benchmark                       (3/12) 
-----------------------------------------------------------------
               
                    (660-665)     36.3
                    (650-655)      2.9
Overhead Resistance (650-665)      4.9

OEX Close                       648.27 

Underlying Support  (625-640)      1.6
                    (635-640)      1.2
                    (625-630)      2.1

Average ratings: 
Resistance levels 2.0 / Support .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is heavy at the OEX 650/665
level while the underlying support is firm at the
OEX 625/640 level.


Put/Call Ratio 
-----------------------------------------------------------------
                                Friday      Tues       Thurs
Strike/Contracts                 (3/12)     (3/16)     (3/18)
-----------------------------------------------------------------
CBOE Total P/C Ratio               .54
CBOE Equity P/C Ratio              .47
OEX P/C Ratio                     1.22


Peak Open Interest (OEX)
-----------------------------------------------------------------
                     Friday         Tues         Thurs
Strike/Contracts     (3/12)         (3/16)       (3/18)
-----------------------------------------------------------------
Puts                 625 / 13,060
Calls                650 / 10,809
Put/Call Ratio       1.12


 


 


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 12, 1999                          25.81   *


 
 

 


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   
March 10, 1999                        49.1        32.5   



*********************************************************
Market Posture
*********************************************************
As of Market Close - Friday, March 12, 1999 

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

DOW Industrials    9,200   9,500   9,876    BULLISH   3.5              
SPX S&P 500        1,225   1,280   1,295    BULLISH   3.11    
OEX S&P 100          615     640     648    BULLISH   3.11    
RUT Russell 2000     400     435     398    BEARISH   3.12 *    

NDX NASD 100       1,900   2,050   2,009    Neutral   3.4     
MSH High Tech        900   1,000     956    Neutral   3.5           

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         800     900     846    Neutral   3.5              
CWX Software         600     650     606    Neutral   3.5                
SOX Semiconductor    350     420     366    Neutral   3.5        
NWX Networking       400     450     436    Neutral   3.4              
INX Internet         450     570     536    Neutral   2.19       

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          650     675     703    BULLISH   3.5                    
XBD Brokerage        650     700     754    BULLISH   3.4        
IUX Insurance        600     625     640    BULLISH   3.5              

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           850     880     930    BULLISH   3.4      
DRG Drug             775     795     820    BULLISH   3.5       
HCX Healthcare       775     795     819    BULLISH   3.5                
XAL Airline          320     330     339    BULLISH   3.2   
OIX Oil & Gas        230     250     254    BULLISH   3.11                      



Posture Alert

Keep the champagne on ice.  The DOW 10,000 party was 
cancelled Friday (3/12) by earnings concerns and a weak
Technology sector.  What's more, we have turned Bearish
again on the Russell 2000 after the index (RUT) could not 
hold above the key 400 level.  What this simply means is 
that the troops are NOT following the generals.  We also want
to caution investors that the Technology sectors have lost
their momentum and are close to rolling over.

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       3/13     Forecast:  --     Previous:  0.1%
BTM/Schroeders    3/13     Forecast:  -0.7%  Previous:  0.6%
Housing Starts    Feb      Forecast:  1.76M  Previous: 1.80M
API Oil Stocks    3/13     Forecast:  --     Previous: 4.27M 
Housing Permits   Feb      Forecast:  1.75M  Previous: 1.78M
Industrial Prod   Feb      Forecast:  unch   Previous: unch 
Capacity Util.    Feb      Forecast:  80.2%  Previous: 80.5%

Wednesday:

None Scheduled

Thursday:

Jobless Claims    3/13     Forecast:  --     Previous: 289k 
Consumer Price Idx Feb     Forecast:  0.1%   Previous: 0.1%  
CPI ex food-energy Feb     Forecast:  0.2%   Previous: 0.1%
Money Supply (M2) 3/01     Forecast:  --     Previous: -$3.0B
International Trade Jan    Forecast:  -$15B  Previous: -$13.8B
Phil Fed Survey    Mar     Forecast:  --     Previous: 15.9
Real Earnings      Feb     Forecast:  --     Previous: -0.1%

Friday:

None Scheduled


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

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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/


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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              3-14-99
Sunday                   2  of  6

*****************************************************
Last weeks change for this weeks picks:
*****************************************************
Index    Last    Week
Dow    9876.35  140.27 Up +600 in last seven days
Nasdaq 2381.54   44.43
$OEX    648.27    9.28
$SPX   1294.59   19.12
$RUT    398.38    0.37
$TRAN  3267.51  -45.28
$VIX     25.81    0.69

Stock   Price    Week

IMNX    168.25   14.75 Splits 2:1 March 3/26
AOL      96.13    9.19 Early recovery from post split fatigue
TLAB     90.69    7.94 Split Candidate
EMC     112.25    7.69 Set new highs last week
JPM     122.00    7.44 Financials are strong, plus takeover target
PVN     114.44    7.32 New High on Friday, earnings 4/22
GDT      68.19    6.44 Several recent upgrades
LGTO     56.63    6.07 Strong recovery, watch for breakthrough
AHP      65.38    5.88 Analysts are positive about future growth
KSS      75.38    5.69 Another retail winner
RNWK     95.13    5.63 Hard to beat
MSFT    160.19    5.24 Two weeks away from 2:1 split
C        65.94    4.19 Raised estimates and price target of $80
WMT      96.38    3.12 Splits 2:1 on April 19th
SCH      84.00    3.00 Moving up on strong volume
LOW      64.88    2.88 Strong steady gains
KMB      50.44    2.38 Diapers are a growth market
G        62.00    2.31 Broke overhead resistance
MWD     101.13    2.19 Split candidate with meeting April 9th.
MER      87.25    1.69 Also a takeover candidate, strong trend
GE      107.38    1.38 Broke out of triple top this week
SBUX     60.06    1.31 Splits Friday March 19th.
QCOM     77.25    0.68 Wait for bounce
CL       92.50   -0.06 Consolidating
BA       34.94   -0.57 Takeover / Rumor play
CMA      68.63   -0.76 Dropped, not moving fast enough
DELL     42.19   -0.84 Found a bottom, ready to go
TJX      32.63   -0.94 Dropped
COF     134.63   -1.19 Profit taking, wait for close over $136
MEDI     58.13   -1.37 Dropped, rolling over?
HRB      49.88   -1.50 Dropped, not moving at all
UTX     127.50   -1.56 Dropped, not moving fast enough
BCST     88.75   -2.94 Dropped, interest is waning
ANF      81.31   -5.69 Dropped, wait for new trend 

Puts

RAD      22.56  -15.94 Dropped, pre-warned, play over
NAV      38.13   -6.63 Takeover rumor squashed
CPQ      30.25   -4.00 PC demand questionable
LHSG     37.13   -3.57 Possible loss of large clients
CB       59.63   -1.93 Expecting lower earnings
BMCS     36.31   -1.88 Time is money and delays are hurting
MCK      59.63   -1.63 Short term still down
SNC      29.88   -1.20 Still falling
DAL      64.00    0.56 If oil goes up, airlines should go down
TBH      69.13    1.12 Brazilian worries
CNET     86.25    2.26 Post split anxiety
INTC    118.25    3.63 Dropped, no earnings warning



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

AHP  - American Home Products
TLAB - TLAB
BA   - Boeing - takeover candidate
AOL  - America Online (back again)
DELL - Dell Computer (returning favorite)
KMB  - Kimberly Clark
KSS  - Kohls
G    - Gillette
GDT  - Guidant
IMNX - Immunex
JPM  - JP Morgan - takeover candidate

Puts

NAV  - Navistar
CPQ  - Compaq

*****************************************
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:

ANF $81.31 (-5.69)  ANF has been another incredible performer 
for us.  This retail giant added over $10 in trading two weeks 
ago.  However, one downgrade and profit taking have taken away 
half of those gains.  ANF inched down every day this past week 
except for Monday.  We have to drop our split candidate as a 
play until this consolidation period ends.  We will re-add it 
as soon as it bounces back up and shows signs of beginning 
another run.

UTX $127.50 (-1.56) UTX has lost its enthusiasm.  It has had a
trading pattern of the past month of one up week and one down
week.  Last week was the down week, but with the movement of
the Dow, we would have expected more out of UTX, so we are
going to drop them as a pick.  

HRB $49.88 (-1.75) We have decided to drop HRB until we 
see a continued run.  HRB ran up strongly two weeks ago, 
but has gone into a consolidation phase.  We still like 
this play, but until it shows further strength, we are 
going to put it back on the watch list.

CMA $68.63(-1.12) We have decided to drop CMA this week.  
It may see a good bump off its support line, but it 
just isn't moving very quickly.  Even with a pretty good 
week in the markets, CMA lost ground.

BCST $88.75 (-2.94)  BSCT sank on Friday with the rest 
of the NASDAQ and the Internet sector.  Volume on Friday 
was only 1/3 of normal.  In short, investor interest in 
BCST has moved elsewhere, so we're dropping it.

TJX $32.63 (-.93) TJX traded as high as $34.75 on Friday, 
but sold off after that for the second day in a row. It 
closed down $.75. Sitting at its 10 day moving average, TJX 
is likely to bounce off it and move higher next week if we 
get a strong market Monday. However, with so many possible 
plays to choose from, we have found some we like better. We 
are dropping TJX. 
 
MEDI $58.13 (-1.37) MEDI traded on light volume on Friday. 
It closed just a few cents below its 10 DMA, where it has 
found support several times in the last month. Although it 
will likely move higher from here if we see a strength in 
the market on Monday, we feel that it is time to let this 
one go. We are dropping it in favor of better plays.



PUTS: 

RAD $22.56 -14.44 (-15.96)  Oh, the humanity!!  That crater 
of destruction you see in Camp Hill, PA, RAD's home office, 
was caused by an earnings warning meteor issued by Rite Aid 
Friday.  Everyone (actually 25% of the float, or 29 times 
normal volume!) bailed out on the news.  There wasn't a 
buyer in sight.  Those of you in this play made an absolute 
killing.  That said, we expect a technical bounce, 
especially since the problem stems from store opening and 
relocation delays; it's only temporary.  In short, the play 
is over.  Take your profit and share the wealth with your 
family.  Congratulations!

INTC $118.25 (+3.62)  Considering all the hype surrounding 
Intel and the recent poor earnings warnings from two other 
computer sector companies, Ingram Micro and AMD, we had kept 
INTC as put play in anticipation of them pre-announcing poor 
earnings as well. This did not happen and we are dropping it. 
Earnings are due 4-14. 



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

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  

SBUX - Starbucks       2:1 03-19-99 ex-date 03-22 current play
NSOL - Network Solution2:1 03-23-99 ex-date 03-24
CTXS - Citrix Systems  2:1 03-25-99 ex-date 03-26 put candidate
IMNX - Immunex         2:1 03-25-99 ex-date 03-26 current play
MSFT - Microsoft       2:1 03-26-99 ex-date 03-29 current play
LU   - Lucent          2:1 03-31-99 ex-date 04-01
VIA  - Viacom          2:1 03-31-99 ex-date 04-01 Good chart
NEG  - Energy East     2:1 04-01-99 ex-date 04-05
DCLK - Double Click    2:1 04-02-99 ex-date 04-05 
INSS - Intl NtwkSvcs   3:2 04-05-99 ex-date 04-06 thin options
SUNW - SunMicro        2:1 04-08-99 ex-date 04-09 play over $104
INTC - Intel           2:1 04-11-99 ex-date 04-12
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 ! 
*****************************************************
SBUX - Starbucks Corp $60.06 (+1.31)(+5.87)(+4.50)

The company is splitting 2:1 on March 19th.  This is now a short 
term play.  Remember that we recommend selling before the 
actual split.  7 out 10 companies suffer from post split 
depression. 

See details in sector list
  
Chart = http://quote.yahoo.com/q?s=sbux&d=3m
*****************************************************
IMNX - Immunex Corp. $168.25 (+14.75)(+12.00)

Stock splits 3-25 2:1

See details in sector list

Chart = http://quote.yahoo.com/q?s=IMNX&d=3m
*****************************************************
MSFT - Microsoft $160.19 (+5.25)(+4.81)(+2.38)(P3W -27.25)

MSFT is 2 weeks away from its 2:1 split date of March 26.  

See details in sector list

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*****************************************************
(long term)
WMT - Wal-Mart $96.38 (+3.13)(+7.12)(+1.38)(P4W+.75)

WalMart splits 2:1 on 4/19

See details in sector list

Chart = http://quote.yahoo.com/q?s=WMT&d=3m
*****************************************************
EMC - EMC Corporation $112.25 (+7.69)(+2.19)(-1.56)(+1.56)

EMC splits 2:1 on 5/28

Details 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. 

*****************************************************
SBUX - Starbucks Corp $60.06 (+1.31)(+5.87)(+4.50)

Since mid-February, Starbucks has been hotter than its coffee!  
The company has jumped over +$14 since then and finally decided 
to cool slightly on Friday with a -$1.19 loss.  Not to worry 
though.  The company is still up overall on the week.  We see 
Friday's drop as a temporary pause before next week.  The 
company is splitting 2:1 on March 19th.  This is now a short 
term play.  Remember that we recommend selling before the 
actual split.  7 out 10 companies suffer from post split 
depression.  
  
See plays in sector list

Chart = http://quote.yahoo.com/q?s=sbux&d=3m
*****************************************************
SCH - Charles Schwab $84.00 (+3.00)(+6.44)(+5.50)(+6.37)(-3.37)

On Friday, Schwab moved up $1.00 on strong volume to set 
another closing high after reaching an intra-day high of 
$85.00. Looking good to continue moving up.

See details in sector list.
 
Chart = http://quote.yahoo.com/q?s=sch&d=3m

***************************************
Brokerage/Banking - Sector
***************************************
C - Citigroup $65.94 (+4.19)(+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

C capped off another great week, rising over $4.  Fund 
mangers can't get enough of this financial powerhouse in 
their efforts to reduce their technology exposure, given 
technology's current weakness.  Momentum in the Smith-
Barney arm is the catalyst for the business growth, but 
also, Latin and South America are producing far greater 
banking results than expected.  The technical chart is 
beautiful with all indicators positive.  Market willing, 
look for the trend to continue through option expiration 
week.  Confirm market direction before playing.

BT Alex Brown raised earnings estimates this quarter from 
$0.83 to $0.90; FY99 earnings from $3.65 to $3.75; FY00 
earnings from $4.25 to $4.35.  The new price target is $80.  
The chiefs, Weill and Reed, moved to sell some of their 
shares last week (you know, insider selling), but it did 
not, and should not have any effect on the stock.  They 
still own sizable chunks.

BUY CALL APR-60 C-DL OI= 6173 at $7.25 SL=5.50
BUY CALL APR-65*C-DM OI= 1204 at $3.63 SL=2.25
BUY CALL APR-70 C-DN OI= 1696 at $1.44 SL=0.75
BUY CALL JUN-65 C-FM OI=13034 at $5.75 SL=4.25
BUY CALL JUN-70 C-FN OI= 3077 at $3.38 SL=2.00

Picked on February 28 at $58.75       PE =24
Change since picked       +7.19       52 week high=73.50
Analysts Ratings     10-9-5-1-0       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 =   9.1 mln.
Chart = http://quote.yahoo.com/q?s=c&d=3m
*******************************************
COF - Capital One $134.63 (-1.19)(+8.18)(+3.75)(P2W+8.44)

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.

Even though COF ended the week of trading with a loss of -$1.19, 
the stock showed signs of life on Friday by finishing the day 
with a +$1.56 gain.  That was particularly amazing since the 
markets closed in the red.  This past week seemed to be a time 
of consolidation after the company added +8.18 two weeks ago.  
It is normal for stocks to pull back after a significant run.  
But Friday's performance could be the beginning of the next run.  
Watch for COF to press higher especially if the market can reach 
the 10,000 level.  However, make sure to use your stop losses!! 

News:  On Friday March 12th, BT Alex. Brown upgraded COF to a 
strong buy from a buy.  Even though that is great news, we still 
would like to see COF hold above the $136 level before we suggest
initiating any new plays.  That number has provided some 
intermediate resistance for COF as of late.  

BUY CALL APR-130 COF-DF OI= 60 at $11.50 SL= 9.50
BUY CALL APR-135*COF-DG OI=131 at $ 8.75 SL= 6.75
BUY CALL JUN-130 COF-FF OI=124 at $17.25 SL=13.50
BUY CALL JUN-135 COF-FG OI= 25 at $14.75 SL=11.75

Picked on February 13th at $121.81      PE= 34
Change since picked        +$12.82      52 week low =$ 51.75
Analysts Ratings         9-7-2-0-0      52 week high=$140.00
Last earnings 01/99 est 0.86   actual 1.04 surprise=+21%
Next earnings 04-16 est 1.19   versus 0.96
Average Daily Volume = 431.6 K
Chart = http://quote.yahoo.com/q?s=COF&d=3m
*******************************************
PVN - Providian Financial $114.44 (+7.31)(+5.00)(+12.69 P3W)

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 almost always rebounds strongly. 

On Friday, PVN hit a new high of $118.44, before selling off 
to close down $1.31 on the day. Analysts are beginning to 
look at valuation on this stock, so use some caution. That 
said, PVN options have been great buys on dips. This stock 
is incredibly resilient. Given the fact that management 
suggests a possible 50% earnings growth this year (and one  
fund manager thinks it may exceed that), the PE doesn't seem 
so high. In addition, although PVN just split Dec. 16, 1998, 
it is in split territory again.

BUY CALL APR-110 PVN-DB OI= 32 at $10.38 SL= 7.75
BUY CALL APR-115*PVN-DC OI=232 at $ 7.75 SL= 6.00
BUY CALL JUN-115 PVN-FC OI= 19 at $13.63 SL=11.00

Picked on Feb 21 at  $98.50     PE=56
Change since picked  +15.94     52 week low= $ 28.38
Analysts Ratings  7-5-1-0-0     52 week high=$118.00
Last earnings on 12/98 est=.62  actual=.66 surprise=6%
Next earnings on  4-22 est=.71  versus=.39
Average daily volume = 853.7k
Chart = http://quote.yahoo.com/q?s=pvn&d=3m
*******************************************
JPM - JP Morgan & Co $122.00 (+7.44)

JPM is a premier international banking firm headquartered in 
the US. It is a holding company for subsidiaries engaged in 
global banking and investment.  They offer services to 
corporations, institutions, and, of course, the very wealthy.

The surge of the Dow the previous Friday and the strong 
financial sector gave this stock the boost it needed to break 
through its old resistance of $114. JPM has been tacking on 
points and advancing daily on strong volume. It firmly held 
its 2.81 gain at Friday's close when the market itself shut 
down. This positive signal demonstrates its strength to hold 
up in uneasy times. The stock's powerful momentum may take it 
to new heights.

Along with the JPM's impressive performance over recent weeks, 
the company is being rumored as a takeover play by Chase 
Manhattan at $150 a share.  Thomas Hardy, analyst for WDR, 
listed JPM as the most suitable since integration between 
two banks is generally the smoothest and they have similar 
corporate cultures. Other merger candidates include MER, 
DLJ, and BKB. 

BUY CALL APR-120 JPM-DD OI=417 at $ 6.88 SL=5.25
BUY CALL APR-125 JPM-DE OI=  0 at $ 4.63 SL=2.75 vol=26 on Fri.
BUY CALL JUN-120 JPM-FD OI=870 at $11.38 SL=9.00

Picked on March 14 at   $122.00     PE = 25
Change since picked       +0.00     52 week low = $ 72.12
Analysts Ratings      1-4-9-0-0     52 week high= $148.75
Last earnings on 12/98 est= .37     actual= .42
Next earnings on 4-14 est= 1.47     versus= 1.80
Average Daily Volume = 978.8k
Chart = http://quote.yahoo.com/q?s=JPM&d=3m
*******************************************
MWD - Morgan Stanley Dean Witter $101.13 (+2.19)(+8.44)(P4W+4.12)

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 continued to move forward this last week and set another
52-week high.  We continue to like MWD as a play for the 
simple fact that financials are excited to see that interest
rates are in check.  Of course, worries about rates can change
on one breath from Mr. Greenspan, but currently things
look good.  MWD has a great chart as it continues to reach
higher highs and higher lows.  Using the stocks 3-month 
chart, MWD could trade down to around $97 before heading for
new highs again.  

Remember, MWD announced a few weeks 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.    

BUY CALL APR-100*MWD-DT OI=1646 at $ 6.50 SL=4.75
BUY CALL APR-105 MWD-DA OI=  62 at $ 4.50 SL=2.75
BUY CALL JUL-105 MWD-GA OI=   7 at $ 9.75 SL=7.00

Picked on Feb.6th at      $89.00   PE = 17
Change since picked       +12.13   52 week low =$ 36.50 
Analysts Ratings       5-4-4-0-0   52 week high=$103.15
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 $84.00 (+3.00)(+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.8, 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 commands about 30% of the online trading market and 
continues to make improvements (i.e. greatly increased 
trading capacity and their new Signature Service for their 
best customers). It is also settling with 300 customers who 
were unable to cancel online orders to buy the IPO Globe.com 
last November. P/Es in the online brokerages are high and 
reflect online trading growth expectations. As long as it 
continues to grow, this market leader will grow with it.

On Friday, Schwab moved up $1.00 on strong volume to set 
another closing high after reaching an intra-day high of 
$85.00. Looking good to continue moving up.
 
BUY CALL APR-80 SCH-DP OI=423 at $ 8.50 SL= 6.50
BUY CALL APR-85*SCH-DQ OI=518 at $ 5.63 SL= 3.75
BUY CALL JUN-90 SCH-FR OI=221 at $ 7.13 SL= 5.25

Picked on Feb 21 at  $69.06     PE = 97
Change since picked  +14.94     52 week low =$18.50
Analysts Ratings  2-0-6-0-0     52 week high=$81.81
Last earnings on 12/98 est=.23  actual=.26 surprise=13%
Next earnings on  4-15 est=.23  versus=.17
Average daily volume = 1.97 mln
Chart = http://quote.yahoo.com/q?s=sch&d=3m
*******************************************
MER - Merrill Lynch $87.25 (+1.69)(+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.. 
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. 

On Friday, MER gapped up to $90.00 at the open, but couldn't 
hold it. It eventually gave up $2.00 on the day. Mer was one 
of the 4 banks and brokerages mentioned by Thomas Hanley as 
possible merger targets of Chase Manhattan. Unlike the other 
3, MER did not rally on the rumor. Into its fourth straight 
week of gains, Merrill Lynch is still looking strong. Try 
to buy on dips.

BUY CALL APR-85 MER-DQ OI=5099 at $ 6.38 SL=4.50
BUY CALL APR-90*MER-DR OI=3426 at $ 3.88 SL=2.25
BUY CALL APR-95 MER-DS OI=1153 at $ 2.13 SL=1.00
BUY CALL JUL-90 MER-GR OI=2686 at $ 8.50 SL=6.50

Picked on Feb 28 at  $76.75      PE= 29
Change since picked  +10.50      52 week low =$ 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.=1.05  versus=1.30
Average daily volume = 3.21 mln
Chart = http://quote.yahoo.com/q?s=mer&d=3m
*******************************************

SEE DISCLAIMER IN SECTION ONE 

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

The Option Investor Newsletter          3-14-99
Sunday             Part 3 of 6

*******************************************
Internet - Sector
*******************************************
AOL - America On Line $96.13 (+9.19)(-2.00)(P3W+6.94 s/a)

America Online is the largest online Internet access 
service in the world.  Membership now exceeds 18 million 
users, including its Compuserve division.  With 25,000 new 
users added per day (1,000,000 in the first 40 days of the 
quarter), and growing advertising revenues, AOL has been 
called the blue chip of the Internets.  The justice 
Department has now cleared the way for AOL to complete its 
long awaited purchase of Netscape.  Revenues should exceed 
$4.5 billion in FY99, up from $2.6 billion in 
FY98.

The post split blues we often see following a split were 
short lived for AOL.  They just keep making more deals with 
advertisers and offering more speed to users.  Last week 
they announced that SBC (including Pacific Bell), for an 
additional $20 per month, would offer customers DSL service 
in 7 states: California, Texas, Missouri, Oklahoma, 
Arkansas and Kansas beginning in the fall, and Nevada later 
in the year.  That will bring the total to 21 states.  
Growth aside, the chart is looking quite strong with MACD, 
stochastics, momentum and RSI in the positive.  They set an 
all-time high at $97.63, which serves as current 
resistance.  Light support is $94, its lows during Thursday 
and Friday's trading last week.  DLJ has a new price target 
of $125.  With option expiration week on hand, prices 
should remain up as we struggle to reach the Holy Grail of 
Dow 10,000.  Confirm market direction before playing.

The DOJ, in addition to clearing the way for AOL's Netscape 
purchase, also said they would not challenge the alliance 
with Sun Microsystems.  AOL rolled out the Kids Only 
Channel this week too.  They anticipate quadrupling the 
number of kid users by 2002.  Also, AOL will build a $520 
mln tech center in Prince William County, VA, which will 
be paid for over the next 3.5 years.

BUY CALL APR- 95 AOE-DS OI=5823 at $ 7.13 SL= 5.25
BUY CALL APR-100*AOO-DT OI=9697 at $ 4.75 SL= 3.25
BUY CALL APR-105 AOO-DA OI=1636 at $ 3.00 SL= 1.75
BUY CALL JUL-100 AOO-GT OI=4707 at $13.13 SL=10.25
BUY CALL JUL-105 AOO-GA OI= 843 at $11.25 SL= 8.75

Picked on March 14 at $96.13         PE =NA
Change since picked    +0.00         52 week high=97.63
Analysts Ratings  24-8-0-0-0         52 week low =15.12
Last Earnings 01/99 est  .09 actual .09 surprise =0%
Next Earnings 04-21 est  .09 versus .04
Average daily volume = 25 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=aol&d=3m
*******************************************
RNWK - RealNetworks $95.13 (+5.83)(+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 an up and down week, but finished up over $5.00.  
Friday saw RNWK trade as high as $104 before it traded down
to close at just above $95.00.  We are now trading $14.00
below RNWK's 52-week high of $109.13.  The chart shows that
we could see RNWK drop to the $90 range.  This could be an
ideal entry point, if we get a bounce.  On the other hand,
we might not see RNWK drop any further.  We have discussed
before that RNWK is a great stock to target shoot.  It has
been consistently having large trading ranges.  One thing
that is interesting is that there is only one analyst that
has RNWK as a strong buy.  This, in a contrarian view, 
leaves a lot of room for upgrades and further growth. 

Not much news on RNWK, although they announced they will
be selling the popular Yeslir Alive software on their
Realstore web site.  

BUY CALL APR- 95 QRN-DS OI= 57 at $12.75 SL=10.25
BUY CALL APR-100*QRN-DT OI=281 at $10.38 SL= 7.50	
BUY CALL APR-105 QRN-DA OI=  3 at $ 8.63 SL= 6.50
BUY CALL MAY-100 QRN-ET OI= 11 at $15.13 SL=11.75

Picked on Feb.27th at   $70.13   PE = n/a
Change since picked     +25.00   52 week low =$ 14.50
Analysts Ratings     1-7-2-0-0   52 week high=$109.13
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
*******************************************
Communications Sector
*******************************************
QCOM - QUALCOMM Inc. $77.25 (+0.68)(+3.56)

Wireless digital communications are QCOM's specialty.  They 
have developed "CDMA" technologies used in cellular, personal 
communication, and wireless local loop systems.  The trucking 
industry uses QCOM's OmniTRACS two-way satellite messaging and 
position tracking systems.  Qualcomm has currently teamed up 
with Loral space to develop the Globalstar satellite system to 
offer telecommunication services worldwide.  Eudora, a type of 
e-mail software, is also a QCOM production.

QCOM was hit hard on Friday.  A round of profit taking set QCOM 
back -$3.13 in trading.  QCOM just managed to finish the week 
with a +0.68 gain.  They had been on a major run into blue skies 
until investors decided to take some money home for the weekend.  
QCOM had even set an all time high of $80.81 on Wednesday.  We 
expect QCOM to revisit its highs in the coming week especially 
if the markets rally again.   Wait for the bounce before 
jumping in.

News:  We would like to mention that QCOM is on our split 
candidate list.  It has plenty of authorized shares and had 
split 2:1 back in '94 at approximately $60.  

BUY CALL APR-75 QAQ-DO OI= 928 at $ 6.75 SL=5.25
BUY CALL APR-80*QAQ-DP OI=1255 at $ 4.25 SL=2.75
BUY CALL JUL-75 QAQ-GO OI= 444 at $10.88 SL=8.75
BUY CALL JUL-80 QAQ-GP OI= 548 at $ 8.63 SL=6.50 
 
Picked on March 9th at $79.75      PE= 47
Change since picked   -$ 2.50      52 week low =$37.75
Analysts Ratings    5-5-6-0-0      52 week high=$80.81
Last earnings 01/99 est 0.58   actual 0.65 surprise=+12% 
Next earnings 04-21 est 0.25   versus 0.58
Average Daily Volume = 1.69 mil
Chart = http://quote.yahoo.com/q?s=qcom&d=3m
*******************************************
TLAB - Tellabs Inc. $90.69 (+7.94)

Tellabs, Inc. designs, assembles, markets and services a 
diverse line of electronic communications equipment.  These 
products are used worldwide by public telephone companies, 
long-distance carriers, alternate service providers, cellular 
and other wireless service providers, cable operators, 
government agencies, utilities and business end-users.  The 
TITAN cross-connect system family is the key element of the 
companies product portfolio.  

TLAB had a nice week with close to an $8 gain.  Earnings are
in just over a month and TLAB has a history of pre-earnings
runs.  TLAB is just a few dollars short of reaching a new
52-week high, which was attained back in July.  If we can 
break through this level, we could see a nice continued run.
TLAB last split in 1996 at the $90 level.  TLAB does have
the shares to do a split and with earnings coming up, we
like the odds of a split being announced.  Watch for pull-
backs for new plays.  TLAB has made a nice run and profit
taking is likely.

The news for TLAB is the continued rumors of consolidation
in the communications industry.  After being stiffed by
Ciena earlier in the year, TLAB is still looking for a 
partner.  

BUY CALL APR-85 TEQ-DQ OI=359 at $9.50 SL=7.00 ITM $5.69
BUY CALL APR-90*TEQ-DR OI=150 at $6.50 SL=4.75
BUY CALL APR-95 TEQ-DS OI=455 at $4.00 SL=2.50
BUY CALL JUN-95 TEQ-FS OI=389 at $8.63 SL=6.50

Picked on Mar.13th at   $90.69   PE = 38
Change since picked      +0.00   52-week low =$31.38
Analysts Ratings   14-11-1-0-0   52-week high=$93.13
Last Earnings    01/99 est .59   actual .62
Next Earnings    04-26 est .49   versus .37
Average daily volume = 2.78m
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m
*******************************************
Software - Sector
*******************************************
MSFT - Microsoft $160.19 (+5.25)(+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. 

MSFT is 2 weeks away from its 2:1 split date of March 26.  
About this time, split candidates usually come to life.  
MSFT got an early start last week in the swirl of rumors 
that, following Intel's announcement of an anti-trust 
settlement with the DOJ, MSFT would soon follow.  The rumor 
was false, but that didn't stop investors from getting back 
in.  Technically, MACD is still positive.  Overhead 
resistance is way up at $176, its high set in the wake of 
truly blowout earnings.  There is room to run unhampered, 
market willing.  Beware, although MSFT announced Thursday 
they are on target to meet analysts' estimates, they expect 
a sequential slow-down in revenues.  This is about as close 
as you can get to "no earnings surprise" without saying it.  
Any market reversal once we reach Dow 10,000 will 
completely overshadow MSFT's split, so keep stops tight and 
confirm upward movement before playing.

MSFT plans to unveil a long-awaited reorganization soon 
that will include new leadership for its struggling MSN 
division and a closer focus on customer groups.  The plan, 
first disclosed by The Seattle Times more than a month ago, 
would divide the company into four main divisions focusing 
on consumers, developers, enterprise customers and 
"knowledge workers" rather than its current organization 
based on product groups.(Reuters)  There was no time frame 
announcement.  They first need a leader for MSN division, 
so they don't continue their game of catch-up with AOL and 
Yahoo!  Just so you know, the DOJ did not block the AOL-
Netscape merger on Friday.

BUY CALL APR-155 MSQ-DU OI= 7559 at $12.25 SL= 9.50
BUY CALL APR-160 MSQ-DX OI=14313 at $ 9.25 SL= 7.25
BUY CALL APR-165 MSQ-DW OI=10221 at $ 7.00 SL= 5.50
BUY CALL APR-170 MSQ-DV OI=13527 at $ 5.25 SL= 4.00
BUY CALL JUL-165 MSQ-GW OI= 5132 at $14.63 SL=11.50

Average daily volume = 15.9 mln

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*******************************************
LGTO - Legato Systems, Inc. $56.63 (+6.06)(+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.

Last week LGTO continued its upward move early in the week, and
then kind of bounced around its 50 dma, which is at $54.48, for
the remainder of the week.  In fact, on Wednesday, Thursday and
Friday, LGTO stalled at $57.25-$57.38 for an intraday high. 
Once LGTO is able to break through the resistance referred to
above, there will be some resistance at $60 before its 52 week
high of $67.75.  A couple of consecutive closes below its 50
dma would not be a good sign for LGTO.

We didn't have any news on LGTO last week.  LGTO would still
appear to be riding the wave of the multi-year, multi-million
dollar enterprise license agreement it signed a couple of weeks
ago 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
scaleable, multi-platform storage management solutions. 

BUY CALL APR-50 EQN-DJ OI=71 at $9.00 SL=6.75
BUY CALL APR-55*EQN-DK OI=66 at $6.00 SL=4.25
BUY CALL APR-60 EQN-DL OI= 6 at $3.75 SL=1.75 vol=20 on Fri.
BUY CALL JUN-60 EQN-FL OI=87 at $6.38 SL=4.25

Picked on Feb 28th at $49.25   PE=65
Change since picked    +7.38   52 week low =$23.50
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 = 892K
Chart = http://quote.yahoo.com/q?s=LGTO&d=3m
*******************************************
DELL - Dell Computer $42.19 (-0.84)(+5.93)(P3W-10.16)

Dell is the world's #1 direct sale computer vendor, and one 
of the largest computer companies in the world, spanning 7 
continents.  In addition to manufacturing and selling 
servers, work stations, PCs and laptops over the Internet 
(a majority still comes from phone sales), Dell recently 
opened an on-line computer store selling third party vendor 
products from peripherals to software.  Though not up to 
its usual expected 50% growth rate when it last reported 
earnings, 38% growth is stellar, and the envy of the 
industry to even the likes of Compaq, HP and IBM.  90%+ of 
their systems are sold to government or business entities.  
They hold only 5 days of inventory, pay for it in 30 days, 
and get paid when you place your order, which equates to a 
hefty 93% return on equity.  Among consumer brands, even 
Coke at 45% ROE and Microsoft at 39% ROE, don't come close.

Dell was beaten down hard when analysts warned of waning 
sales.  Furthermore, Dell failed to meet sales and only 
equaled expectations, which forced it to admit mistakes in 
their last conference call.  Not to worry, the fundamentals 
are still in place with a hefty 38% growth rate. 
Competitors should be so fortunate).  Rumors are now 
circulating that with the success of Gateway's consumer 
business, Dell (in very Microsoft fashion) may turn its 
guns on its largest competitor in the segment.  Following 
the split last week, Dell was met with heavy volume buying 
activity at $40.50 to $40.75 on Thursday and Friday.  In 
short, we've found a bottom.  MACD is positive.  Look for 
prices to rise on the way to Dow 10,000 during option 
expiration week.  Confirm stock and market direction before 
playing.

In the news, Dell and Amazon.com announced they will 
advertise in each others check-out line (how 'bout a PC to 
go with that book?).  also, Dell said French mechanical 
software design firm Dassault Systemes agreed to a deal to 
make Dell workstations run Dassault software widely used by 
engineers.  Finally, if you are a subscriber to 
TheStreet.com, check out an article wherein, Michael Dell 
outlines plans to keep the company in super-growth mode.

BUY CALL APR-40   DLQ-DH OI= 7071 at $4.25 SL=3.00
BUY CALL APR-42.5 DLQ-DV OI= 8278 at $3.00 SL=1.75
BUY CALL APR-45   DLQ-DI OI=15989 at $2.00 SL=1.00
BUY CALL MAY-42.5*DLQ-EV OI=27053 at $4.75 SL=3.25
BUY CALL MAY-45   DLQ-EI OI=23561 at $3.63 SL=2.25

Picked on March 14 at  $42.19         PE =79
Change since picked     +0.00         52 week high=55.00
Analysts Ratings 11-11-12-0-0         52 week low =15.25
Last Earnings 02/99 est   .31 actual .31 surprise =0%
Next Earnings 04-21 est   .32 versus .22
Average daily volume =  44.2 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=dell&d=3m
************************************************************
EMC - EMC Corporation $112.25 (+7.69)(+2.19)(-1.56)(+1.56)

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.  

EMC jumped out of a congestion zone last Friday and continued
with its upside breakout last week.  It set a new 52 week high
at $118.38.  One article we read attributed the surge to
the raft of positive comments by analysts after the new
products meeting on 03/01.  The article thought that this was
also a short squeeze which only adds to the momentum. 
Soundview also issued a report that surveyed corporate data
center managers and indicated that they expect no slowdown in
computer hardware spending in 1999, but rather an acceleration
from 1998 spending levels.

In the news last week, EMC was on the cover of Business Week
magazine.  The article indicated that in the last decade the
only S&P 500 stock that has outperformed EMC was Dell.  The
article also pointed out that EMC's sales tend to be resilient,
even in a computer industry downturn, because storage demand
continues to grow as corporations generate more and more data
on existing networks.  Also, coverage was initiated on EMC by a
Tokyo brokerage with an outperform rating.

BUY CALL APR-110 EMB-DB OI=2263  at $ 9.00 SL= 6.75
BUY CALL APR-115*EMB-DC OI=3940  at $ 6.38 SL= 4.25
BUY CALL APR-120 EMB-DD OI= 911  at $ 4.25 SL= 2.50
BUY CALL JUL-115 EMB-GC OI=2233  at $14.00 SL=11.25
BUY CALL JUL-120 EMB-GD OI= 357  at $11.38 SL= 8.75

Picked on Feb 14th at $102.38    PE=66
Change since picked     +9.87    52 week low =$ 34.25
Analysts Ratings   10-6-0-0-0    52 week high=$118.38
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
*******************************************
Drug-Biotech  - Sector
*******************************************
IMNX - Immunex Corp. $168.25 (+14.75)(+12.00)

Immunex is biopharmaceutical company that develops and 
manufactures products to fight cancer, immunological 
disorders, and infectious diseases.  Some of its better 
known drugs include Leukine (used to treat bone marrow 
transplant patients), Novantrone (used for leukemia or 
prostate cancer patients), and Enbrel (for rheumatoid 
arthritis).  American Home Products owns a 54% stake 
in Immunex.

The main reason we are adding IMNX as a play is because it is 
a fundamentally sound company that is splitting on March 26th.  
The two weeks prior to the split is the time when the stock 
is most likely to make its split run.  IMNX is now in blue sky 
territory after breaking its resistance level of $161.  It set 
an all time high of $169.88 this past Thursday in intraday 
trading.  Even though the stock was down -$1.50 on Friday, we 
feel this is only a bout of slight profit taking and probably
our entry point. But wait for the reversal then feel free to 
hop into this high flier.

News:  Immunex received FDA approval for its rheumatoid 
arthritis drug Enbrel back in November.  Immunex is extremely 
happy with the drug's popularity.  The sales of Enbrel are 
expected to hit $40 million in the first quarter.  The CEO 
said they were comfortable with Wall Street Q1 estimates of 
-0.13 and that he hopes Enbrel will turn the company's numbers 
positive by the end of 1999.  Also, the Immunex drug Nuvance 
has moved to Phase II clinical trials.   This asthma reducing 
drug is unique in that it is the first once-a-week treatment 
for asthmatics.  

These are expensive due to recent stock performance.
BUY CALL APR-165*IUQ-DM OI=71 at $16.00 SL=12.50
BUY CALL APR-170 IUU-DN OI= 0 at $13.50 SL=11.25 vol. was 23 
BUY CALL JUN-165 IUQ-FM OI=95 at $24.25 SL=19.00

Picked on March 14th at $168.25      PE= 0
Change since picked     +$ 0.00      52 week low =$ 47.88
Analysts Ratings      2-1-8-0-0      52 week high=$169.88
Last earnings 02/99 est -0.12   actual  0.26 surprise=+317% 
Next earnings 04-15 est -0.13   versus -0.23
Average Daily Volume = 485.7 K
Chart = http://quote.yahoo.com/q?s=IMNX&d=3m
*******************************************
AHP - American Home Products Corporation $65.38 (+5.88)(+0.00)

AHP discovers, develops, makes, and sells healthcare and 
agricultural products.  Over 60% of its sales are derived 
from pharmaceuticals.  Some of their products you might be 
familiar with are Advil, Robitussin, and Premarin (an estrogen-
replacement drug).  AHP also has subsidiaries like Cyanamid, 
Fort Dodge, Whitehall-Robins Healthcare and owns a majority 
stake in Immunex Corp.

AHP has been on a tear since early February.  They have 
consistently climbed higher and are now trading in blue sky 
territory.  On Friday March 12th, the company even set an all 
time high of $66.19 in intraday trading.  We are adding AHP 
as a play not only because of its great fundamentals, but also 
because of its latest developments.  The company received FDA 
approval to use its anti-depressant drug Effexor XR for both 
depression and anxiety.  AHP also won "fast-track" review for 
a new vaccine that could prevent pneumococcal diseases in 
children.  If approved, the vaccine could be used as early as 
next year and produce worldwide sales of $300 million within 
four years.  

News:  On Tuesday March 9th, Merrill Lynch upgraded AHP to 
"near-term accumulate" from neutral.  BT Alex. Brown analysts 
also had positive comments on the company.  They for-see an 
"accelerating top and bottom line due to new products." 
(-Reuters)

BUY CALL APR-60 AHP-DL OI=5741 at $6.63 SL=4.75
BUY CALL APR-65*AHP-DM OI=2986 at $3.00 SL=1.50
BUY CALL JUL-60 AHP-GL OI=2780 at $9.00 SL=6.75
BUY CALL JUL-65 AHP-GM OI=1801 at $5.88 SL=4.25

Picked on March 14th at $65.38      PE= 35
Change since picked    +$ 0.00      52 week low =$43.75
Analysts Ratings     9-9-7-0-0      52 week high=$66.19
Last earnings 01/99 est 0.43   actual 0.44 surprise=+2% 
Next earnings 04-21 est 0.50   versus 0.49
Average Daily Volume = 2.59 Mil
Chart = http://quote.yahoo.com/q?s=AHP&d=3m
*******************************************
GDT - Guidant Corp $68.19 (+6.44)(+5.00)

A global leader in the medical device industry, Guidant 
provides innovative, minimally invasive products and services 
to treat cardiovascular and vascular disease. Its Cardiac 
Rhythm Management unit provides implantable defibrillators 
and pacemakers. Its Cardiac and Vascular Surgery Group provides 
minimally invasive surgical devices for advanced laparoscopic 
procedures. Its Vascular Intervention unit provides stents, 
guides, balloons, and other devices. Since being spun-off 
from Eli Lily a few years back, GDT has become the #2 stent 
maker behind Arterial Vascular (AVE), and a leading maker of 
defibrillators. Its stent, the "Duet" will soon push GDT into 
the #1 stent spot, if it hasn't already. GDT was the first 
company to represent all three areas of vascular intervention 
products.

After it split in late January, Guidant suffered a post-split 
depression that lasted almost 2 weeks. By mid-February, GDT 
was off to the races again, and it has barely paused to look 
back, adding about 20 points since it resumed its climb. 
There are several reasons for its strength. First of all, GDT 
is a company that spends a lot on R&D so that it can remain at 
the forefront of development in its field. In addition to 
coronary stents, GDT now has FDA approval for "Megalink", its 
first biliary stent. Like a coronary stent, it will hold open 
a vessel that is at risk of closing. This gets GDT in on the 
ground floor of the non-coronary stent market, which is still 
in its infancy. GDT can expand its stent expertise into a new 
market. Research is also being done on other totally new 
products and procedures. Restinosis prevention, for instance, 
may be a huge future market for GDT. In February, Guidant 
completed its acquisition of Intermedics from Sulzer Medica 
and is expected to see the benefits of that purchase in the 
second half of the year. On 2/26, Schroder started coverage 
of GDT with "outperform". A week later, on 3/5, SG Cowen's 
Michael Mullen increased his estimates for Q1 from $130 to 
$165 million. He reiterated a "strong buy", and said that an 
upside surprise in earnings is possible this quarter. In 
addition to the analysts' positive views, GDT is technically 
strong as well. It remains well above all its major moving 
averages.

On Thursday 3/11, Sam Navarro, at ING Baring Ferman Selz, 
raised his earnings estimate to $175-$180 million, up from 
an estimate of $163 million. He maintains a "buy" rating and 
raised his 12-month price target to $72 from $65. The next 
day Guidant set a new intra-day high of $69.50 and closed at 
a new high of $69.38. 

BUY CALL APR-65*GDT-DM OI=587 at $ 6.38 SL=4.50 ITM $3.19
BUY CALL APR-70 GDT-DN OI= 83 at $ 3.88 SL=2.25
BUY CALL JUL-70 GDT-GN OI= 27 at $ 7.75 SL=6.00 

Picked on March 14 at  $68.19      PE=68
Change since picked     +0.00      52 week low= 29.75  
Analysts' ratings  17-4-7-0-0      52 week high=67.13
Last earnings on 12/98 est=.28     actual=.29 surprise 3.6%
Next earnings on  4-15 est=.31     versus=.31
Average daily volume = 1.34 mln
Chart = http://quote.yahoo.com/q?s=gdt=3m
*******************************************
Miscellaneous  
*******************************************
G - Gillette $62.00 (+2.31)(+3.75)

Gillette began in Boston in 1901 as the Gillette Safety Razor 
Company. It now develops, manufactures, and sells broadly 
diversified products, which include blades and razors, 
toiletries and cosmetics, stationery products, electric 
shavers, small household appliances, hair and oral care 
products, and alkaline batteries (Duracell is the big name). 
Its current big new product is the Mach 3 shaving system.

Gillette had a disappointing first quarter in which sales 
fell 3%. In the first 9 months, it also incurred reorganiza-
tion costs and expenses for the divestiture of Jafra Cosmetics, 
International, as well as sales declines associated with poor 
overseas economies. Over the years, however, this has been 
an outstanding company, and its stock price is beginning to 
reflect a return in investor confidence. G has a strong commit-
ment to developing new products and excellent potential to 
further expand sales of their products worldwide. In the 
beginning of March, G broke above its 10 day moving average 
and began climbing in price. It is currently sitting just a 
hair below the high it set back in early July: $62.63. If it 
can pass that magic number, it is blue skies ahead for G. 

On 3/9, Morgan Stanley Dean Witter started coverage with 
"outperform". On Friday, 3/12, JP Morgan upgraded G from "LT 
Buy" to an outright "Buy". It closed up $1.56 on very strong 
volume Friday. The breakout may be tomorrow. Be ready.

BUY CALL APR-60*G-DL OI=1888 at $3.88 SL=2.00
BUY CALL JUN-60 G-FL OI=8417 at $5.63 SL=4.00
BUY CALL JUN-65 G-FM OI=2399 at $3.38 SL=1.50

Picked on March 14 at  $62.00      PE=63
Change since picked     +0.00      52 week low =35.31  
Analysts' ratings   5-8-4-0-1      52 week high=62.66
Last earnings on 12/98 est=.39     actual=.39 surprise=0%
Next earnings on  4-16 est=.25     versus=.23
Average daily volume = 3.08 mln
Chart = http://quote.yahoo.com/q?s=g=3m
*******************************************

PLAYS CONTINUED IN SECTION FOUR.

*******************************************
                   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             3-14-99
Sunday                4  of  6

*******************************************
CL - Colgate-Palmolive Co $92.50 (+0.07)(+7.68)

Colgate-Palmolive manufactures and markets a wide variety of 
products for the consumer.  They have two distinct business 
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 followed the Dow's lead on Friday and closed slightly 
down.  The stock is still showing signs of strong momentum 
since its initial surge at the beginning of March. This past 
week CL reached levels in the mid-90's.  Friday, it traded 
in a healthy 3+ point range hitting an intra-day high of 
$94.25 on moderate volume. Look for this stock to continue 
its steady climb.

Positive earnings are expected and are due out April 22. No
announcement yet on a possible stock split. Last week's news 
on Colgate-Palmolive included coverage initiated by MSDW to 
an "outperform" and the declared .0275 dividend to be paid 
May 17. We'll keep you posted on any new updates.

BUY CALL APR-90 CL-DR OI= 62 at $5.75 SL=4.00
BUY CALL APR-95*CL-DS OI=283 at $3.13 SL=1.50
BUY CALL MAY-95 CL-ES OI=395 at $4.75 SL=3.00

Picked on March 7th at $92.56    PE = 35
Change since picked     $0.00    52 week low =$65.06
Analysts Ratings    4-7-5-0-0    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 = 1.12 mln
Chart = http://quote.yahoo.com/q?s=cl&D=3m
*******************************************
KMB - Kimberly-Clark Corp $50.44 (+2.38)

Kimberly-Clark manufactures and markets a wide range of 
paper products for personal, business, and industrial use.  
Everyone's heard of Huggies diapers! Well it's KMB's product 
and the #1 selling diaper in the US.  They make everything 
in the paper industry from washroom materials to medical 
masks and wound dressings.  The company has manufacturing 
operations in 39 countries and sells its products in over 
150 countries.

KMB has been in a tight trading range of $46-48 since its 
4Q earnings report on Jan 26.  This type of trading behavior 
is usually followed by a definitive break out in one 
direction or the other. On Wednesday, KMB climbed above 
its long time resistance of $48 and has made small, but 
unwavering gains both Thursday and Friday.  Looks like a break
out, but wait for confirmation on Monday.  Overhead resistance
appears to be at the $54 to $55 range.

The all-time quarterly record set by KMB this past 4Q confirms 
the company's leading posture in the industry.  They reported 
earnings of .44 versus -.26 the year before.  Also, on Feb 25, 
KMB announced an increase in its quarterly dividend to $0.26 - 
this is the 27th consecutive year it has raised its cash 
dividends. 

BUY CALL APR-45 KMB-DI OI= 386 at $6.25 SL=4.00
BUY CALL APR-50 KMB-DJ*OI=3359 at $2.25 SL=1.25
BUY CALL APR-55 KMB-DK OI=8289 at $0.63 SL=0.00
BUY CALL JUL-50 KMB-GJ OI=1076 at $4.13 SL=2.50
BUY CALL JUL-55 KMB-GK OI=1804 at $1.69 SL=0.75

Picked on March 14  at    $50.44     PE = 23
Change since picked       +0.00     52 week low = $35.87
Analysts Ratings      5-4-4-0-0     52 week high= $57.25
Last earnings on 12/98 est= .67     actual= .69
Next earnings on  4-21 est= .65     versus= .56
Average Daily volume = 1.44 mln 
Chart = http://quote.yahoo.com/q?s=KMB&d=3m
*******************************************
SBUX - Starbucks Corp $60.06 (+1.31)(+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.

Since mid-February, Starbucks has been hotter than its coffee!  
The company has jumped over +$14 since then and finally decided 
to cool slightly on Friday with a -$1.19 loss.  Not to worry 
though.  The company is still up overall on the week.  We see 
Friday's drop as a temporary pause before next week.  The 
company is splitting 2:1 on March 19th.  This is now a short 
term play.  Remember that we recommend selling before the 
actual split.  7 out 10 companies suffer from post split 
depression.  Also keep in mind that March options expire on 
that Friday as well.
  
News:  Starbucks reached another all time high of $63.75 in 
intraday trading this past Thursday.   

BUY CALL APR-55 SQX-DK OI=1631 at $7.13 SL=5.25
BUY CALL APR-60 SQX-DL*OI=1460 at $4.63 SL=2.75
BUY CALL APR-65 SQX-DM OI= 398 at $2.13 SL=1.00
 
Picked on March 4th at $56.56      PE= 72
Change since picked   +$ 3.50      52 week low =$28.75
Analysts Ratings    5-6-5-0-0      52 week high=$63.75
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 = 1.14 mil
Chart = http://quote.yahoo.com/q?s=sbux&d=3m
*******************************************
KSS - Kohl's Corporation . $75.38 (+5.69)

KSS operates 213 family-oriented specialty department stores in
the Midwest and the Mid-Atlantic, and it has stepped up
expansion in those areas.  Targeting middle-income customers,
it sells moderately priced apparel and shoes for men, women,
and children; accessories; housewares; and soft goods such as
sheets and towels.  KSS runs a tight operation with fewer
departments than traditional, full-line department stores and
central registers to expedite checkout and keep staff costs
down.  The stores stock name brands (NIKE, Levi's, etc.) not
traditionally available to discounters and sells them at lower
prices than department stores. 

In the news last week, KSS reported earnings of 58 cents per
share versus estimates of 54 cents per share.  For its fiscal
year, sales increased 20.3% and net income increased 36.1%. 
Comparable store sales increased 7.9% for the year.  In
February, KSS reported that same store sales increased 11.2%. 
KSS opened 32 stores last year and it is starting to expand to
the West.  KSS plans to open 40 to 45 stores in 1999.  

KSS traded to new highs 4 out of the 5 days last week before a
little profit taking on Friday.  KSS has been in a nice
positive uptrend since mid-December.  With the sector rotation
into retail and the good earnings announcement last week, we
would expect the trend to continue.  KSS has had a tendency
during this latest run to roll back to its 21 dma, which is
currently at $69.09.  

Friday may have provided an entry point, but wait for upward
confirmation.

BUY CALL APR-70 KSS-DN OI= 70 at $ 7.63 SL=5.75
BUY CALL APR-75*KSS-DO OI=243 at $ 4.63 SL=2.75
BUY CALL JUL-75 KSS-GO OI= 75 at $ 8.75 SL=6.50

Picked on Mar 14th at $75.38   PE=61
Change since picked    +0.00   52 week low =$34.06
Analysts Ratings   4-3-6-0-0   52 week high=$78.00
Last earnings  01/99 est=.54   actual=.58
Next earnings  05-19 est=.20   versus=.17
Average Daily Volume = 408K
Chart = http://quote.yahoo.com/q?s=KSS&d=3m
*******************************************
WMT - Wal-Mart $96.38 (+3.13)(+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 had been playing WMT as a slow but steady momentum stock 
with strong fundamentals, and as a split candidate. 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. WMT's
split is April 19th.

On Friday, Wal-Mart set another intra-day high of $96.94 and 
a new closing high of $96.38. WMT's chart looks good--the 
retail king is strong! There will be dips, so choose your 
entry to maximize profits.
 
BUY CALL APR-90  WMT-DR OI=1826 at $8.13 SL=6.25
BUY CALL APR-95* WMT-DS OI=3083 at $5.00 SL=3.25
BUY CALL APR-100 WMT-DT OI= 429 at $2.63 SL=1.25
BUY CALL JUN-95  WMT-FS OI= 406 at $7.00 SL=5.25
BUY CALL JUN-100 WMT-FT OI= 868 at $5.88 SL=4.00

Picked on Jan 26th at $83.56    PE = 48  
Change since picked   +12.82    52 week low= $48.19
Analysts' ratings 7-11-4-0-0    52 week high=$94.25
Last earnings on 12/98 est=.66  actual=.70  
Next earnings on 5-12  est=.43  versus=.37
Average daily volume = 3.10 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m
*******************************************
GE - General Electric $107.38 (+1.38)(+5.69)

GE might not call itself a conglomerate, but it is. Its 14 
divisions make airplane engines, appliances, lighting, 
medical systems, plastics, power systems, and also include 
NBC, financial services, and electrical distribution and 
control. It is one of the largest and most diversified 
industrial corporations in the world.

Since the beginning of January, GE has tried 3 times to break 
through resistance at $105.00. Each time it hit that magic 
number, it pulled back, forming a triple top. Tuesday it finally 
broke out and hit $107.19 before making a new closing high of 
$106.00. Volume was nearly 50% higher than normal. This is a 
very bullish sign for the stock, and we expect it to make new 
highs from here. It is now well above its 10 dma, which 
should provide support, and it has firm support in the $97 
to $98 range.

In the news, GE is buying a 20% stake in ValueVision Intern-
ational through its GE Equity and NBC divisions. NBC's expertise 
will help ValueVision's cable network, and NBC will gain 
Internet and e-commerce opportunities. Early Friday morning, 
a GE satellite tilted away from Earth and disrupted media and 
Broadcast companies for almost 6 hours before it was restored 
to its proper position. GE set a new high that day of $108.69 
and closed at a record $107.38 

BUY CALL APR-105*GE-DA OI=3015 at $5.88 SL=4.00
BUY CALL APR-110 GE-DB OI=3058 at $3.00 SL=1.50 
BUY CALL JUN-110 GE-FB OI=4471 at $6.38 SL=4.50

Picked on March 9 at   $106.00      PE=38
Change since picked      +1.38      52 week low=  69.00
Analysts' ratings    8-8-2-0-0      52 week high=107.19
Last earnings 12-98   est=$.80   actual=.80 surprise 0%
Next earnings on 4-08 est=$.65   versus=.57 
Average daily volume = 4.57mln
Chart = http://quote.yahoo.com/q?s=ge=3m
*******************************************
LOW - Lowe's Companies, Inc. $64.88 (+2.88)(+2.69)(+2.25)

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.

LOW traded to new highs 3 out of 5 days last week.  LOW doesn't
make explosive moves, but as you can tell by the weekly numbers
above, it makes nice, steady moves.  In fact, since its
earnings release at the end of February, LOW has been in a nice
uptrend.  The good thing about LOW's uptrend is that it doesn't
tend to get too far ahead of itself.  It would appear that the
rotation into retail is continuing.  

In the news last week, LOW was upgraded from an accumulate to a
buy.  The analyst had very positive things to say about sales
and margin growth.  They also think that the acquisition of
Eagle Hardware will help accelerate earnings growth over the
next several years.

BUY CALL APR-60*LOW-DL OI=1568 at $6.63 SL=4.75 lower premium
BUY CALL APR-65 LOW-DM OI= 240 at $3.38 SL=1.50
BUY CALL JUL-65 LOW-GM OI= 314 at $6.50 SL=4.75

Picked on Jan 31st at $58.31   PE=40
Change since picked    +6.57   52 week low =$23.88
Analysts Ratings  6-13-3-0-0   52 week high=$66.44
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
*******************************************
BA - Boeing $34.94 (-.57)

The Boeing Company, after its merger in 1997 with McDonnell 
Douglas and acquisition in 1996 of the defense and space 
units of Rockwell International, became the largest aerospace 
company in the world.  Its history mirrors the history of 
aviation.  Boeing is the world's largest manufacturer of 
commercial jetliners, military aircraft and the nation's 
largest NASA contractor.  Company revenues for 1996 were 
$22.7 billion; for 1997 they were $45.8 billion and for 
1998 they reached $56.2 billion.

We are playing Boeing as a takeover play.  This is a 
risky play, as rumor plays normally are.  The rumor is that
GE is interested in buying Boeing.  Actually, there have
been several rumors from different sources all alluding
to a GE/BA merger.  BA appears to have formed a bottom
near $32, so this actually might be less risky when it
comes to normal rumor plays.  Currently, the option prices 
are very attractive.  We recommend May or August calls.  

BUY CALL MAY-35 BA-EG OI= 5090 at $2.38 SL=1.25
BUY CALL MAY-40*BA-EH OI=10703 at $0.75 SL=0.00
BUY CALL AUG-40*BA-HH OI= 5330 at $1.75 SL=1.00

(Takeover/Rumor Play Only)

Chart = http://quote.yahoo.com/q?s=BA&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. $59.63 (-1.93)(+1.56)(-1.75) 

Although CB finished about even on a down day Friday, it
did finally show its weakness last week.  We still see
further selling in this insurance company.  We all saw
what happened to RAD this last week as it pre-announced
lower earnings.  We feel this is very possible with CB
also.  There still is a bit of support at $59, but once
this is broken, we see a drop to at least $55.  

BUY PUT APR-60*CB-PL OI=153 at $3.13 SL=1.50 
BUY PUT APR-55 CB-PK OI=130 at $1.00 SL=0.00

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

*****

CNET - CNET, Inc. $86.25 (+2.26)(+53.37)
       					        
CNET supplies information about the Internet, computers, and
digital technologies by using the World Wide Web and
television.  The company operates several websites including
snap.com, cnet.com, shareware.com, search.com, and news.com.
It also produces "TV.COM" which is the first TV show about
the Internet.  However, 75% of CNET's sales come from its 
Internet operations and advertisements. 

We added CNET as a put play this past Thursday.  Since then,
the stock has proceeded to drop another -$9.56.  We feel the 
profit taking can continue well into next week.  CNET 
initially spiked when it made its split run.  7 out of 10 
companies suffer from post split depression.  Well, CNET is 
definitely one of the 7.  One day after it split back on 
March 9th, the company began its free fall.  CNET proceeded 
to shed points on Wed, Thurs, and Friday that totaled a 
whopping -$24.94 loss.  So, the positive finish for the week 
is deceiving.   CNET could drop all the way to its 30 dma 
which lies around the $68 level or even through that to $60, 
where its price was before it made its split run.  Watch for 
CNET to head further south but make sure to set those 
trailing stop losses!

vol=daily volume 
BUY PUT APR-90 QKZ-PR OI=12 at $14.75 SL=11.75 vol=289 Fri. 
BUY PUT APR-85 QKZ-PQ OI=43 at $12.63 SL=10.50 vol= 90 Fri.
BUY PUT APR-80 QKZ-PP OI=29 at $ 9.50 SL= 6.75 vol=249 Fri.

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

*****

CPQ - Compaq Computer Corp $30.25 (-4.00)

Compaq is the #1 PC maker in the world and stands only behind 
IBM and HWP as a leading computer firm.  Primarily they develop 
and market hardware and software solutions to the business sector, 
but also cater to home users, schools, and the government.  They 
offer a slew of other technology services such as their 
AltaVista internet search engine.

Two major lawsuits initiated by investors against Compaq 
dominated Friday's news.  The separate lawsuits similarly allege 
that CPQ concealed a slowdown in PC sales allowing company 
executives to sell shares of stock at higher prices, a violation 
of US securities law.  Investors claim they weren't notified 
in a timely manner of a poor earnings projection for 1Q and bought 
shares at inflated prices between Jan 27 and Feb 25.  Word had 
leaked out to the Street on Feb 26 regarding the soft sales - via
an investor privy to the warning - and analysts recommended 
shedding the stock.  The response was catastrophic.  CPQ dropped 
$5.82 to $35.37 that day and a record-setting 75 million shares 
traded hands.  The stock has continued to freefall losing another 
4 points in trading this week.  The question about PC demand
is still unanswered and the bottom for CPQ's stock price 
appears to be between $25 and $22.
   
BUY PUT APR-25   CPQ-PE OI= 2402 at $0.63 SL=0.00
BUY PUT APR-27.5 CPQ-PY OI= 4173 at $1.25 SL=0.50
BUY PUT APR-30*  CPQ-PF OI=15946 at $2.25 SL=1.25

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

*****

NAV - Navistar Intl. Corp. $38.13 (-6.63)

NAV is the US's third largest heavy-duty truck maker, behind
DaimlerChrysler's Freightliner and PACCAR.  Along with its
International brand of heavy-duty trucks, NAV also manufactures
medium-sized trucks, school buses, diesel engines, and
replacement parts.  It also provides financing and insurance
for its dealers and customers and sells its diesel engines to
other truck makers, primarily Ford.  NAV operates production
plants in Brazil, Canada, Mexico, and the US.  The company
exports its products to more than 70 countries. 

Back in mid-February, NAV posted earnings that beat analysts
estimates, and there were rumors that Volvo would use the cash
from the sale of its car division to Ford to buy NAV.  The
Volvo rumors started again on February 26, at which point NAV
spiked some more.  Last week Volvo said that they weren't
anxious to do anything foolish like overpay for an acquisition,
and that increased share repurchases was always an option for
the cash.  

NAV traded down every day last week.  It would appear that it
got bid up on the takeover speculation, and with the press
release last week by Volvo, traders decided to bail.  NAV
closed below its 30 dma of Friday, and there will be some
support for NAV around its 50 dma which is at $35.56.  Also
realize when trading NAV, if the takeover rumors were to heat
up again, that would blow the put play out of the water.  We
believe quick hits on this one are warranted (this is not
a buy and hold play).

BUY PUT APR-40 NAV-PH OI= 130 at $4.88 SL=2.75
BUY PUT APR-35*NAV-PG OI=1120 at $2.44 SL=1.00

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

*****

TBH - Telebras $69.13 (+1.13) 

TBH headed higher the first couple days of the week, but
has faded the last few days.  This is a play on the
Brazilian market.  The Bovespa has a direct effect on the
price of TBH.  As economic worries continue in Brazil, we
could see a nice drop in TBH.  This is a risky play, but
could be very profitable if Brazil breaks down some more
or if traders perceive any reason to worry about Brazil.

BUY PUT APR-70*TBH-PN OI=3875 at $5.00 SL=2.75 
BUY PUT APR-65 TBH-PM OI=3063 at $3.13 SL=1.50

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

*******

LHSG - LHS Group $37.13 (-3.56)(-2.31)(-3.88)(P3W 0.00)

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.

Friday intra-day, LHSG dropped below last October's low of 
$36.75 on higher than average volume.  This happened while 
the rest of the market was scratching out new highs last 
week.  When the market heads south, as it usually does 
after crossing a milestone (Dow 10,000), look out below.  
While adding Comcel, Columbia's largest phone company, as a 
customer, it didn't have much effect on the stock price.  
We surmise that insiders' desire to sell most of their 
holdings is driven by some forthcoming event, like losing a 
major customer in 2000 (?), which has been rumored, but we 
can't confirm it.  Anyway, the chart is still ugly, with 
momentum too, now waning.  Confirm stock direction before 
playing.

BUY PUT APR-40*QLH-PH OI=899 at $5.00 SL=3.25
BUY PUT APR-35 QLH-PG OI= 72 at $2.63 SL=1.25

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

*********

MCK - McKesson HBOC, Inc $59.63 (-1.63)

McKesson is a combination of businesses.  Foremost, they 
are a leader in healthcare information systems and North 
America's top distributor of pharmaceuticals and supplies. 
And if you need water to take those pills, Mckesson will 
deliver that too.  They are the #3 distributor of bottled 
water in the US.

MCK spiked up today on news from SG Cowen's issuance of a 
"strong buy" recommendation and a long-term target price 
of $104.  The key word here is long-term!  The stock may 
have closed up, but it also set a new yearly low at $52.25!  
That gave traders an almost 8 point range to rake in the 
profits.  And on the higher end, it provided a great entry 
point for new put plays.  The charts and other technicals
on MCK are still ugly and indicate the stock is in a 
downward trend.  Other reports in the news also shared 
this sentiment.  MarketScope reported recent weakness of 
MCK is in response to internet drug sales, negative drug 
pricing due to possible Medicare pharmaceutical coverage, 
and market concerns over HBOC revenue growth.  Keep this 
stock on your list as a put play but confirm direction
before jumping in.  Friday looked like a one day spike.

BUY PUT APR-55 MCK-PK OI= 224 at $2.13 SL=1.00
BUY PUT APR-60*MCK-PL OI=2079 at $3.88 SL=2.50
BUY PUT APR-65 MCK-PM OI= 114 at $7.13 SL=5.25

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

*******

SNC -  Snyder Comm., Inc.  $29.88 (-1.20)(-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.

SNC dropped every day this week except for Friday.  Our steady 
dipper faked us out on Friday by gaining fifty cents when the 
rest of the markets finished in the red.  Go figure!  After 
several down days, a company is bound to recover a little.  
We see the gain as temporary and expect SNC to resume its 
plunge.  It is nearing its all time lows around the $25-26 
level.  Make sure you set your stop losses tight to protect 
any profits.  

BUY PUT APR-30 SNC-PF OI=146 at $3.38 SL=1.75

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

*****

DAL - Delta Air Lines $60.50 (+0.56)  

Delta is the US's third largest airline providing service 
to about 150 cities domestically and to 48 cities in 31 
other countries.  They supply scheduled air transportation 
for passengers, cargo and mail. DAL also has a 33% stake in 
WORLDSPAN, computer reservations service.

Understand we are playing DAL as a put on the expectation 
that the OPEC meeting will deliver some substantial cuts and 
thereby, oil prices will rise significantly cutting the profit 
margin for airlines.  If rumor begins to spread that they will 
not be successful then the airlines are likely to try and rally.  
This was the case yesterday.  We see this as a temporary spike 
and still recommend DAL as put.  Oils are still trending up and 
we expect airlines to trend down, at least, until OPEC members 
issue the final word on March 23.  Oil analysts do expect OPEC 
to enforce the cutbacks in light of the recent press and the 
financial distress of the Arab states.  In related news, the 
Business Travel Coalition (BTC) sent an open letter to all CEO's 
of the nations major airlines emphasizing the gravity of the 
industry's fate regarding deregulation.  It stressed the 
government's dissatisfaction and mistrust of the airlines - 
a sentiment shared by consumers.  High fares and poor customer 
service topped the list of complaints.  Always confirm stock and 
market direction before entering into a new play.  Use stops to 
protect your profits.  

BUY PUT APR-55 DAL-PK OI=342 at $0.69 SL=0.00
BUY PUT APR-60*DAL-PL OI=190 at $1.81 SL=0.75
BUY PUT APR-65 DAL-PM OI=244 at $3.88 SL=2.50

Chart = http://quote.yahoo.com/q?s=DAL&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



*************************************************************
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            3-14-99
Sunday                5  of  6

******************************************************************
Combos
******************************************************************
A New Fear of Heights?

Friday, March 12

U.S. Stocks fell slightly on Friday and the DJIA failed again in
its quest to reach the magical 10,000 mark. Much of the world is
now watching the drama after several strong sessions positioned
the index for an attempt at the new milestone. The Dow ended 21
points lower at 9876 after an early rally faded on worries about
profits at Caterpillar (CAT) and Oracle (ORCL). The technology
issues drove the Nasdaq Composite down sharply, ending 30 points
lower at 2381. The S&P 500 index, which had risen with the Dow
into record territory this past week fell slightly to 1294. In
the broader market, declining issues led advances 1,540 to 1,381
on volume of 815 million shares on the NYSE.

Thursday's new plays (opening positions - prices):

UAL   APR60P/APR70C  $2.62  Credit (Up $3 on sector rally)
ITVU  JUN22C/MAR22C  $3.43  Debit  (Easy entry at that price)
PHB   APR25C/MAR25C  $1.62  Debit  (Gapped up $10!)

The "Play of the day" was our short-term time spread on Pioneer
Hi-Bred. PHB shares rose almost $10 after an announcement that
DuPont is in talks with Pioneer regarding a possible business
combination. DuPont already owns 20% of PHB and indicated earlier
this week it wants to expand in those areas. Although DuPont said
that there was no assurance any transaction will be concluded,
the disclosure of the talks sent Pioneer stock rocketing, much
higher than anyone expected. DuPont said it will not release any
more statements until a decision has been made so there is still
room for speculation.

We decided to discuss this play in detail to demonstrate some of
the possible adjustments that can be made in options trading. The
underlying goal in most of these "roll-outs" is to limit losses
on plays that don't perform as expected.

We opened the position; APR25C/MAR25C at $1.62 debit ($2.62/$1.00).
Around noon, the news of a possible merger/buy-out halted trading.
The stock eventually opened around $33. After the initial frenzy
subsided, the stock settled to the $31-$32 range. There were not
too many alternatives at that point, so we bought-back the short
position (MAR25C @ $8.00), increasing our debit to $9.62 on the
APR25C. Our initial goal was to sell the long position for $10,
and escape the play near break-even (w/commissions). The stock
price moved slighty higher towards the end of the day but not
enough to allow a satisfactory exit. Rather than hold the single
position over the week-end, we compromised our bias, selling the
MAR30C for $5.12. There was still some potential (premium) left in
this ITM position even with only a week to go because no one knows
"exactly" the outcome of the merger discussions. Our current debit
is $4.50 on the new position, an APR25C/MAR30C (Diagonal Spread).
Our hope is that the stock will pull back somewhat over the next
few days and allow us to buy the short position back next Friday,
rolling into an April debit spread (probably the APR25C/APR30C).

Portfolio plays:

SKYT has been strengthening recently and the attention seems to
be on the recent rumors of a merger or buy-out offer from a large
telecom company. WCOM is the most-mentioned candidate and the
news circulating through the daytrading chat rooms is adding to
the already immense volume of the past few days. Rather than take
a chance with our long position, we decided to buy back the sold
March call (MAR20C) and ride the wave until it subsides. When the
interest starts to fade, we will sell a new April position to
reduce the cost of our long-term (June) call.

One week to go for the monthly plays. All of the March credit
spreads are profitable and we don't expect to make adjustments
in that section. The debit spreads are faring better this month
and we expect the last two open plays, AMP and KSU to finish ITM.
Calendar positions that were rolled into credit spreads include
ADI, OMPT, AZPN and PTEK (the last two will be close!) Volatility
plays on MTC and UK will be closed next Friday, hopefully for a
profit. The straddles/strangles portfolio is performing well and
the majority of the long-term plays are profitable. A complete
summary of current positions will be published after the monthly
expiration next week. Good Luck!
******************************************************************
NEW PLAYS 
******************************************************************
PHB - Pioneer Hi-Bred  $34.50     *** Back for More! ***

Pioneer Hi-Bred is the nation's largest seller of hybrid seeds.
PHB uses genetic research to develop seeds that produce higher
crop yields for farmers, who use the crops primarily as feed for
animals. Corn seed accounts for more than 75% of sales but the
company also makes seeds for alfalfa, canola, sorghum, sunflowers,
soybeans, and wheat. Pioneer also makes silage and hay inoculants.
Chemical giant DuPont owns nearly 21% of the company.

This history behind this play is listed above in the "portfolio
plays" section and our emotion may be getting the best of our
judgement. Review all the facts surrounding this issue before
opening any new positions. 

Our current opinion is that the brokerage firm Merrill Lynch and
their agribusiness analyst Leonard Teitelbaum have placed a fair
limit on the stock price by announcing on Friday that DuPont would
likely pay at least $35 a share if it were to acquire a stake in
Pioneer Hi-Bred International Inc. They commented "We initially
conclude that Pioneer is worth at least what it was worth in 1997,
and arguably considerably more," He also said in a research note,
"Opening bids in our opinion (would be) $35 a share, regardless of
current earnings and sales estimates." Its probably closer to $37
but any dip in the stock price should allow us to close this play
early.

We think the current situation presents another good opportunity
for profit in a very speculative play (based mostly on revenge),
and the volatility disparity is just a small bonus. But remember,
we were wrong before! Watch for any significant change in Monday
morning's trading activity before opening this position.

PLAY (aggressive/revenge play):

BUY  CALL MAR-40 PHB-CH OI=154 A=$0.87
SELL CALL MAR-35 PHB-CG OI=356 B=$2.75
INITIAL NET CREDIT TARGET=$2.00 ROI=66% B/E=$37.00

Chart = http://quote.yahoo.com/q?s=PHB&d=3m
******************************************************************
BDX - Becton Dickinson  $39.50     *** On the rebound! ***

Becton, Dickinson is the leading maker of syringes in the US and
one of the top manufacturers in the world. Its Medical Supplies
and Devices segment makes diabetes care, infusion therapy, and
drug injection products, and its Diagnostic Systems segment makes
flow cytometry (cell analysis) systems, immunodiagnostic test
kits, sample-collection devices, and tissue culture labware.
Becton, Dickinson's best-sellers include Hypak prefillable
syringes and Vacutainer blood-collection products. The company
has operations in more than 40 countries and has established
manufacturing plants in China and India.

BDX was honored by PC Week for their innovative corporate use of
technology with their recently launched ACEŽ Brand product Website
(http://www.bd.com/ace). BD carries a full-line of sports medicine
and orthopedic support products and the website has easy-to-use
search tools for finding the product that best supports a specific
type of injury. It is part of BD's efforts to educate consumers so
they make the most successful buying decisions.

Two upgrades in the last month and a favorable technical outlook
with a previous trading range near $40 make this a viable play.
The implied volatility on Becton Dickinson call options jumped up
to about 63% for the nearby at-the-money contracts on Friday and we
will use that new interest to help offset the initial cost of our
position.

PLAY (conservative/debit spread):

BUY  CALL APR-30 BDX-DF OI=10  A=$10.00
SELL CALL APR-40 BDX-DH OI=113 B=$2.25
INITIAL NET DEBIT TARGET=$7.50 ROI(max)=33% B/E=$37.50

Chart = http://quote.yahoo.com/q?s=BDX&d=3m
******************************************************************
DLP - Delta and Pine Land  $32.31     *** More meager mergers ***

Delta and Pine Land leads the US in cottonseed production. It
also breeds, produces, and sells soybean seed. D&PL uses breeding
programs and advanced biotechnology to develop cottonseed with
improved crop yield and fiber characteristics. Monsanto is buying
D&PL and together they have developed herbicide tolerant cotton
and soybeans, as well as pest-resistant cottonseed. D&PL is
researching the controversial "terminator" gene, which germinates
once and would necessitate annual seed purchases. D&PL's cotton
varieties are grown mainly in Arizona and east of Texas.

There's been a frenzy of mergers in ag biotech lately, creating a
rapidly changing competitive landscape. Last year, Monsanto bought
Dekalb Genetics, in which it already owned a 40% stake, and Delta
& Pine Land. Around the same time, DuPont announced plans to
divest 20% of its ownership in Conoco through an IPO and sell off
the rest over several years. DuPont was only talking about raising
$5 billion from selling part of Conoco, but there was speculation
that it would target Monsanto for a takeover. DuPont also owns a
stake in Pioneer Hi-Bred. The idea is that Dupont has the cash,
MTC has the technology and DLP and the other seed companies have
the basic genomes of important agricultural crops. The future
possibilities are endless!

The only reason there is still speculation in this position is
because the deal has not been finalized. It is expected to occur
anytime but the department of Justice has yet to issue their final
approval and some experts seriously doubt that it will occur in
March.

PLAY (conservative/credit spread):

BUY  PUT MAR-25 DLP-OE OI=1803 A=$0.38
SELL PUT MAR-30 DLP-OF OI=1885 B=$0.81
INITIAL NET CREDIT TARGET=$0.50 ROI=11% (1 week)

Chart = http://quote.yahoo.com/q?s=DLP&d=3m
******************************************************************
SAPE - Sapient  $63.38     *** Technicals Only ***

Sapient serves its clients Web-based technology and integrated
software systems. The company's QUADD (Quality Design & Delivery)
program is a rapid-development workshop-based system that designs,
installs, and tests interactive client/server computer systems.
The company offers its customers a fixed price and guaranteed
delivery date for its software systems. The firm specializes in
designing software systems for financial services companies,
telecommunications, manufacturing, energy, and health and social
services organizations. The company was founded in 1991 by co-CEOs
Jerry Greenberg and Stuart Moore, who each own about 25% of SAPE.

Not much news on this one. A "buy" recommendation in a report by
CS First Boston and a recent announcement that the company has
named Alex Kormushoff vice president of its manufacturing, retail
and distribution practice. We do like the short-term technical
stability (both price rate-of-change and volume are dropping) and
the shrinking volatility for a 1 week play.

PLAY (aggressive/credit strangle):

SELL CALL MAR-65 QPE-CM OI=35 B=$2.00
SELL PUT  MAR-60 QPE-OL OI=66 B=$1.12
INITIAL NET CREDIT TARGET=$3.25 ROI=16%
UPSIDE B/E=$68.25 DOWNSIDE B/E=$56.75

PLAY (very conservative/credit spread):

BUY  CALL MAR-75 QPE-CO OI=95 A=$0.31
SELL CALL MAR-70 QPE-CN OI=72 B=$0.62
INITIAL NET CREDIT TARGET=$0.38 ROI=8% (1 week)

Chart = http://quote.yahoo.com/q?s=SAPE&d=3m
******************************************************************
CMGI - CMG Inc.  $164.00     *** For the brave only! ***

CMGI (formerly CMG Information Services) is one of the chief
architects of the Internet. What began as a direct marketing firm
has become a prolific investor in the future of the Internet. The
venture capital arm, @Ventures, is a savvy trend-spotter boasting
a portfolio with stakes in more than 30 Internet companies. Its
Internet Group includes a string of subsidiaries offering most
Web-related services such as advertising and hosting.

CMGI reported net income Thursday of $14 million, or 28 cents per
diluted share, which includes gains from the sale of investments
in Lycos, Amazon.com and GeoCities. Excluding those one-time gains,
CMGI reported a loss of 40 cents a share. The consensus estimate,
as compiled by First Call, was a loss of 22 cents. But CMGI said
that analysts were not able to properly project the magnitude of
gains so the discrepancy may be misleading. The company also said
it has no intention of splitting its stock, having completed a
2-for-1 split in January.

Internet stocks will be may be active Monday as PaineWebber hosts
its third annual Internet conference. Among the companies slated
to talk to analysts are CMGI which has taken a stand opposing USA
Networks' planned acquisition of Lycos. The company's CEO, David
Wetherell, made it clear he feels the terms of the deal continue
to be inadequate and CMGI is the largest Lycos shareholder.

For those of you that like to play CMGI options, we offer a small
disparity play. Please don't participate if you can't monitor the
position (or have a broker that will). For day-traders, the long
option can purchased to open the play and if the stock price
continues to fall, a quick profit will be made. If you do open the
credit spread, the recent volatility in the underlying issue makes
this an excellent candidate for a roll-out should the stock break
through the thin support near $140.

PLAY (aggressive/credit spread):

BUY  PUT MAR-130 QGW-OF OI=352 A=$0.87
SELL PUT MAR-135 QGW-OG OI=198 B=$1.62
INITIAL NET CREDIT TARGET=$1.00 ROI=25%

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


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                      DISCLAIMER
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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            3-14-99
Sunday                6  of  6

******************************************************************
COVERED CALL SECTION
******************************************************************
Why do we trade?

The stock market brings together a world of traders and investors
with different expectations and goals. Many of us play stocks and
options with an opinion on which direction the market will move 
while others use spreads and combination strategies to profit
from price discrepancies between similar and related positions.
Traders buy options because they have increased leverage with
limited risk. They allow you to control an expensive stock for
a fraction of the price and the cost is limited to the price you
pay for the option. Others use options to protect existing stock
holdings and acquire new issues. Even market-makers contribute as
middlemen, buying and selling to accommodate other participants.

You may think that options trading is very risky but there are
people who make money consistently with proven strategies and
methods. They succeed by using the proper techniques and sound
money management. You can be successful but first you must define
your goals and risk - reward profile. Most investors simply want
financial independence and a comfortable standard of living. The
key is to construct favorable positions that are appropriate for
your type of portfolio and risk tolerance.

Before you begin trading options, develop a plan. After you have
specific goals in place, it is much easier to concentrate on the
strategies and trading techniques. Use the newsletter for a wide
range of candidates and narrow them down through your own "due
diligence" until you find plays that meet your requirements. Use
sound money management such as "stop loss" and "limit" orders to
maximize profits on the winners and reduce losses on plays that
don't perform as expected.

Surviving the "learning curve" to eventually profit in the market
is not easy. Most traders lose money in the beginning but being
human, they rarely talk about their failures. Listening to those
who have played the markets, it would seem that no one ever made
a losing trade. The fact is, every successful trader has his/her
share of disaster stories. What separates the successful option
trader is the ability to survive those occurrences and profit
from the experience. Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (1 week to strike date)
******************************************************************
Stock  Price  Last   Mon  Strike  Opt     Profit   ROI   Monthly
Sym    Picked Price       Price   Bid     /Loss          ROI

AMMB   10.25   9.81   Mar  10.00  1.44   $  1.00  11.4%  24.7%
CCMC   10.69  14.19   Mar  10.00  1.69  *$  1.00  11.1%  16.1%
PDQ    10.31  10.81   Mar  10.00  1.25  *$  0.94  10.4%  15.0%
COOL   19.06  19.38   Mar  17.50  2.63  *$  1.07   6.5%  14.1%
BTC    14.50  15.31   Mar  15.00  0.81  *$  1.31   9.6%  13.9%
ESPI    5.38   9.13   Mar   5.00  1.06  *$  0.68  15.7%  13.7%
BAMM   11.81  10.19   Mar  10.00  3.13  *$  1.32  15.2%  13.2%
NXTR   10.38  18.25   Mar  10.00  1.44  *$  1.06  11.9%  12.9%
GADZ    7.69   8.00   Mar   7.50  0.94  *$  0.75  11.1%  12.1%
ZD     16.94  22.38   Mar  15.00  3.38  *$  1.44  10.6%  11.5%
DIGE    6.44   6.81   Mar   5.00  1.69  *$  0.25   5.3%  11.4%
ARTT    8.63   8.31   Mar   7.50  1.50  *$  0.37   5.2%  11.3%
ARTT    8.00   8.31   Mar   7.50  1.50  *$  1.00  15.4%  11.1%
CRCL   17.25  17.44   Mar  17.50  0.81   $  1.00   6.1%   8.8%
BTC    15.25  15.31   Mar  15.00  0.81  *$  0.56   3.9%   8.4%
USWB   37.13  37.38   Mar  35.00  3.38  *$  1.25   3.7%   8.0%
POSS   11.00  12.38   Mar  10.00  1.50  *$  0.50   5.3%   7.6%
CNXT   17.06  21.75   Mar  15.00  2.75  *$  0.69   4.8%   7.0%
IGEN   28.50  27.63   Mar  25.00  5.00  *$  1.50   6.4%   6.9%
BVSN   40.00  61.00   Mar  35.00  7.50  *$  2.50   7.7%   6.7%
NIN    22.63  23.00   Mar  20.00  3.50  *$  0.87   4.5%   6.6%
PPOD    9.13   9.38   Mar   7.50  2.13  *$  0.50   7.1%   6.2%
CIEN   22.44  26.81   Mar  20.00  3.50  *$  1.06   5.6%   6.1%
CTYA   33.63  41.88   Mar  30.00  5.13  *$  1.50   5.3%   5.7%
WKR    17.88  21.25   Mar  17.50  1.25  *$  0.87   5.2%   5.7%
BTIM   16.63  15.38   Mar  12.50  4.88  *$  0.75   6.4%   5.5%
CLST   12.31  11.00   Mar  10.00  3.00  *$  0.69   7.4%   5.4%
XYLN   19.94  36.31   Mar  17.50  3.25  *$  0.81   4.9%   5.3%
BYND   28.00  22.75   Mar  20.00  9.50  *$  1.50   8.1%   5.0%
ITVU   22.75  22.13   Mar  17.50  6.00  *$  0.75   4.5%   4.9%
CKFR   30.56  41.00   Mar  25.00  6.88  *$  1.32   5.6%   4.8%
MYLX   11.88  10.75   Mar   7.50  4.75  *$  0.37   5.2%   3.8%
SRCM   21.06  16.19   Mar  17.50  5.00   $  0.13   0.8%   0.7%
GYMB   10.50   8.88   Mar  10.00  1.06   $ -0.56  -5.9%   0.0%
--------------------------------------------------------------
MTIC    5.88   5.56   Apr   5.00  1.44  *$  0.56  12.6%   9.1%
MCHM    9.75  10.13   Apr   7.50  2.88  *$  0.63   9.2%   6.6%

Previously closed: LGND, SNAP, ALKS

-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

COOL   19.38  Mar 17.50  QOO CW  2.44  253   16.94   3.31%   3.31%
IDTC   18.50  Mar 15.00  IQJ CC  3.75  3036  14.75   1.69%   1.69%
------------------------------------------------------------------
AMMB    9.88  Apr  7.50  UKQ DU  2.88  339    7.00   7.14%   7.14%
DAOU    6.06  Apr  5.00  QQX DA  1.56  1227   4.50  11.11%  11.11%
ENZN   16.56  Apr 15.00  QYZ DC  2.38  122   14.18   5.78%   5.78%
GALT   23.94  Apr 20.00  QFG DD  5.00  408   18.94   5.60%   5.60%
NWAC   25.69  Apr 25.00  NAQ DE  2.00  122   23.69   5.53%   5.53%
PWAV   28.94  Apr 25.00  VFQ DE  5.13  30    23.81   5.00%   5.00%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis
COOL   19.38  Mar 17.50  QOO CW  2.44  253   16.94   3.31%   3.31%
IDTC   18.50  Mar 15.00  IQJ CC  3.75  3036  14.75   1.69%   1.69%
------------------------------------------------------------------
DAOU    6.06  Apr  5.00  QQX DA  1.56  1227   4.50  11.11%  11.11%
AMMB    9.88  Apr  7.50  UKQ DU  2.88  339    7.00   7.14%   7.14%
ENZN   16.56  Apr 15.00  QYZ DC  2.38  122   14.18   5.78%   5.78%
GALT   23.94  Apr 20.00  QFG DD  5.00  408   18.94   5.60%   5.60%
NWAC   25.69  Apr 25.00  NAQ DE  2.00  122   23.69   5.53%   5.53%
PWAV   28.94  Apr 25.00  VFQ DE  5.13  30    23.81   5.00%   5.00%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

              SAME AS RC - ALL POSITIONS ARE ITM
******************************************************************
Company Descriptions
******************************************************************
One week plays to profit on overvalued premiums. The use of margin
will help offset commission costs on the low ROI positions.
******************************************************************
COOL - Cyberian Outpost  $19.38     *** 1 week play ***

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 moved
higher on news of improved fiscal Q4 revenues, expected to be
about four times the year ago level. The company plans to report
in the first week of April and we think the recent support near
$17 makes this play favorable speculation for one week.

Mar 17.50 QOO-CW Bid=2.44 OI=253 CB=16.94 RC=3.31% RNC=3.31% 

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
******************************************************************
IDTC - IDT Corporation  $18.50  *** 1 week speculation ***

IDT Corporation is a telecommunications company which offers a 
broad range of integrated long-distance telephone and Internet 
access services. IDT Corp has been trending down (probably in 
anticipation of lackluster earnings) but rebounded sharply on
news that an agreement was signed with GeoCities to become a
member of its e-commerce affiliate program. We speculate that
IDTC will hold above $15 for one week. The return on a monthly
basis is 7.3%.

Mar 15.00 IQJ-CC Bid=3.75 OI=3036 CB=14.75 RC=1.69% RNC=1.69% 

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
******************************************************************
AMMB - Amresco Inc.  $9.88     *** Buy-out Speculation ***

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. A new long-term play
to own the stock well below the recent trading range.

APR  7.50 UKQ-DU Bid=2.88 OI=339 CB=7.00 RC=7.14% RNC=7.14% 

Chart = http://quote.yahoo.com/q?s=AMMB&d=3m
******************************************************************
DAOU - DAOU Systems, Inc.  $6.06  *** Basing above $5 ***

DAOU designs, implements, supports and manages advanced computer
network systems for hospitals, integrated healthcare delivery 
networks and other healthcare provider organizations. No recent
news since appointing Larry Grandia as its new president, DAOU
seems to forming a base above $5 with stronger support around
$4. Selling pressure has dropped off throughout March and some 
short term "buy" signals have appeared.

APR 5.00 QQX-DA Bid=1.56 OI=1227 CB=4.50 RC=11.11% RNC=11.11% 

Chart = http://quote.yahoo.com/q?s=DAOU&d=3m
******************************************************************
ENZN - Enzon, Inc.  $16.56  *** New trading range ***

Enzon, Inc. is a biopharmaceutical company that develops, 
manufactures and markets enhanced therapeutics for life
threatening diseases. Enzon jumped out of its recent trading
range on Wednesday (short squeeze?) and the only news was on 
Thursday (Josef Bossart, Ph.D., had been appointed President 
of SCAŽ Ventures). We like the support that $15 now offers 
along with the bullish chart pattern.

APR 15.00 QYZ-DC Bid=2.38 OI=122 CB=14.18 RC=5.78% RNC=5.78% 

Chart = http://quote.yahoo.com/q?s=ENZN&d=3m
******************************************************************
GALT - Galileo Technology Ltd.  $23.94 *** Just Upgraded! ***

Galileo Technologies defines, develops and markets advanced 
digital semiconductor devices that perform critical functions
for network systems. Galileo is in an up-trend since the February
lows and has been recently upgraded. BOP is showing maxed buying
pressure with volume support. We like the cost basis at the
bottom of the support area from $19 to $22.

APR 20.00 QFG-DD Bid=5.00 OI=408 CB=18.94 RC=5.60% RNC=5.60% 

Chart = http://quote.yahoo.com/q?s=GALT&d=3m
******************************************************************
NWAC - Northwest Airlines  $25.69     *** Long-Term Play ***

Northwest Airlines, the US's fourth-largest airline, with hubs in
Detroit, Memphis, Minneapolis-St. Paul, Osaka, and Tokyo. They
serve about 400 destinations in over 80 countries. With about 400
aircraft, Northwest is one of the world's top air cargo carriers.
Among its other interests are the WORLDSPAN computer reservation
system and subsidiaries such as Northwest Aerospace Training. 
The current trading range reflects a positive long term outlook.

APR 25.00 NAQ-DE Bid=2.00 OI=122 CB=23.69 RC=5.53% RNC=5.53% 

Chart = http://quote.yahoo.com/q?s=NWAC&d=3m
******************************************************************
PWAV - Powerwave Technologies  $28.94 *** Technicals Only ***

PWAV designs, manufactures and markets ultra-linear radio 
frequency power amplifiers for use in the wireless communications
market. The Co's. amplifiers increase the signal strength of 
wireless transmissions while reducing interference. On Friday,
DLJ initiated coverage with a "buy" rating. PWAV appears ready
to resume its up-trend after the February consolidation. BOP is
excellent and support exists near the sold strike.

APR 25.00 VFQ-DE Bid=5.13 OI=30 CB=23.81 RC=5.00% RNC=5.00% 

Chart = http://quote.yahoo.com/q?s=PWAV&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
PDX   20.00 Mar   20.00 PDXCD   2.38  11.88   178   392
PDX   20.00 Apr   20.00 PDXDD   4.25  21.25     1    33
ESPI   9.13 Apr   10.00  AQDB   1.69  18.49   291  1556
FRTE   4.94 Apr    5.00 RQFDA   0.88  17.72   120   181
AMMB   9.81 Apr   10.00 UKQDB   1.56  15.92   617  1164
ZD    22.19 Apr   22.50  ZDDX   3.50  15.77   216   926
PDX   20.00 Apr   22.50 PDXDX   3.13  15.63    79    49
BNYN   9.81 Apr   10.00 QYNDB   1.50  15.29    55   892
HS     6.88 Apr    7.50  HSDU   1.00  14.55   606  2059
POSS  12.38 Apr   12.50 UPQDV   1.75  14.14    35   499
QMDC   9.00 Apr   10.00 QCDDB   1.25  13.89   203     5
OFIS   4.63 Apr    5.00 OFQDA   0.63  13.51    10    75
TERA   4.69 Apr    5.00 QIPDA   0.63  13.33     9   238
TALK  10.00 Apr   10.00 QQKDB   1.31  13.13   123  4898
TRA    4.94 Apr    5.00 TRADA   0.63  12.66   120   229
DAOU   5.94 Apr    7.50 QQXDU   0.75  12.63   113   891
DANKY  5.00 Apr    5.00 DNQDA   0.63  12.50    30   107
PAH    5.00 Apr    5.00 PAHDA   0.63  12.50     5   155
PDX   20.00 Apr   25.00 PDXDE   2.50  12.50   142   350
FFD    9.94 Apr   10.00 FFDDB   1.19  11.95    53   192
ESSI   6.81 Apr    7.50 QESDU   0.81  11.93    20   100
SPYG  10.00 Apr   10.00 YQGDB   1.19  11.88     7   130
MCOM   7.38 Apr    7.50 MQMDU   0.88  11.86     7   695
ZD    22.19 Apr   25.00  ZDDE   2.63  11.83   598  3145
WALK   4.78 Apr    5.00 OQWDA   0.56  11.76    20    20
ENMD  25.00 Apr   25.00 QMADE   2.94  11.75    10     1
ERTH   9.63 Apr   10.00 QERDB   1.13  11.69    10   351
MWHS  15.00 Apr   15.00 MQRDC   1.75  11.67    12    64
PCMS   7.50 Apr    7.50 PQPDU   0.88  11.67     5   472
SMOD  14.00 Apr   15.00 UYQDC   1.63  11.61    17   377
AHAA  17.44 Apr   17.50 GAQDW   2.00  11.47    25   220
MCRE   6.63 Apr    7.50 MQZDU   0.75  11.32    25   150
CURE  14.38 Apr   15.00 NQHDC   1.63  11.30    10    88
WFR    7.25 Apr    7.50 WFRDU   0.81  11.21    20    25
WAXS   7.25 Apr    7.50 WXQDU   0.81  11.21    60   404
TWMC  12.28 Apr   12.50 TQTDV   1.38  11.20     6   147
PLCM  17.00 Apr   17.50 QHDDW   1.88  11.03   114   167
SYBS   7.38 Apr    7.50 SBQDU   0.81  11.02    12   318
FORE  13.63 Apr   15.00 FQODC   1.50  11.01  1021  2608
PTEN   4.56 Apr    5.00 NZQDA   0.50  10.96    34    30
DBCC  14.94 Apr   15.00 BQDDC   1.63  10.88   302  1099
MMCN  14.38 Apr   15.00 CMQDC   1.56  10.87    10   224
BEAS  15.00 Apr   15.00 BRQDC   1.63  10.83    30    79
WSTL   4.63 Apr    5.00 QLWDA   0.50  10.81    10   111
SPLH   7.00 Apr    7.50 QRXDU   0.75  10.71    20   481
PAIR   9.94 Apr   10.00 PQGDB   1.06  10.69   460  3973
OMPT  11.75 Apr   12.50 QTTDV   1.25  10.64   245   312
ARTT   8.31 Apr   10.00 AOQDB   0.88  10.53   182   559
IDC    4.81 Apr    5.00 IDCDA   0.50  10.39    40  1236
KEG    4.81 Apr    5.00 KEGDA   0.50  10.39   141  1309
EGGS  14.56 Apr   15.00 EGQDC   1.50  10.30   207   769
TRL    9.19 Apr   10.00 TRLDB   0.94  10.20    22   651
NSIT  24.53 Apr   25.00 QNTDE   2.50  10.19    12    20
AMMB   9.81 Apr   12.50 UKQDV   1.00  10.19   210   276
GCTI  16.00 Apr   17.50 QHFDW   1.63  10.16    10    34
IDTC  18.50 Apr   20.00 IQJDD   1.88  10.14   180  1382
ICII   9.88 Apr   10.00 BQJDB   1.00  10.13    69   167
PETC   7.44 Apr    7.50 QPTDU   0.75  10.08    10    42
HLYW  20.56 Apr   25.00 HWQDE   2.06  10.03    30   170
THQI  20.00 Apr   20.00 QHIDD   2.00  10.00     6    42
PPOD   9.38 Apr   10.00 QPPDB   0.94  10.00    20   551
WSTL   4.63 May    5.00 QLWEA   1.06  22.97    20   307
REGI   5.00 May    5.00 QRGEA   1.06  21.25    30   143
WIRE   9.25 May   10.00 QWREB   1.81  19.59    70   236
VTA    4.56 May    5.00 VTAEA   0.88  19.18    10   140
PCMS   7.50 May    7.50 PQPEU   1.44  19.17    15  2146
MCRE   6.63 May    7.50 MQZEU   1.25  18.87    60   180
PDX   20.00 May   22.50 PDXEX   3.63  18.13    22    54
DANKY  5.00 May    5.00 DNQEA   0.88  17.50   140  2000
PDX   20.00 May   25.00 PDXEE   3.38  16.88     2    83
PAH    5.00 May    5.00 PAHEA   0.81  16.25    10   303
ENMD  25.00 May   25.00 QMAEE   4.00  16.00     2   472
CLST  11.00 May   12.50 EQLEV   1.63  14.77    14   281
BAANF  7.22 May    7.50 BQFEU   1.06  14.72    10   255
PWAV  28.88 May   30.00 VFQEF   4.13  14.29     7    50
QMDC   9.00 May   10.00 QCDEB   1.25  13.89    30    14
ZONA  29.00 May   30.00 NQZEF   4.00  13.79    10    97
PTEN   4.56 May    5.00 NZQEA   0.63  13.70    10   809
PERI   7.06 May    7.50 HQSEU   0.94  13.27    12    10
ARTT   8.31 May   10.00 AOQEB   1.06  12.78    66   914
EXBT   4.94 May    5.00 EXQEA   0.63  12.66     6    34
KERA  13.94 May   15.00 KVQEC   1.75  12.56     5   474
LGND   8.50 May   10.00 LQPEB   1.06  12.50     5   204
SBTK  16.25 May   20.00 XQYED   2.00  12.31     4   101
GMGC   3.56 May    5.00 GGQEA   0.44  12.28    25  2694
NOI   11.25 May   12.50 NOIEV   1.38  12.22    15    76
FTL   12.31 May   12.50 FTLEV   1.50  12.18     5  1008
ABRX  18.50 May   20.00 IQOED   2.25  12.16    10    27
TBI    7.31 May    7.50 TBIEU   0.88  11.97     7    32
PPP   12.06 May   12.50 PPPEV   1.44  11.92    84   327
SGI   14.69 May   15.00 SGIEC   1.75  11.91    13  1648
HYSL  16.88 May   17.50 WQEEW   2.00  11.85    10   264
OSI   30.00 May   30.00 OSIEF   3.50  11.67    10   237
CPWR  23.69 May   25.00 CWQEE   2.75  11.61    22   247
IO     7.06 May    7.50  IOEU   0.81  11.50    48   297
AND    6.63 May    7.50 ANDEU   0.75  11.32    30   355
CDN   24.00 May   25.00 CDNEE   2.69  11.20    10   813
PTEK  10.13 May   12.50 TQOEV   1.13  11.11   237  1316
TAVA   5.69 May    7.50 QTVEU   0.63  10.99    10  1150
ITWO  27.31 May   30.00  JQEF   3.00  10.98     2   446
CEPH   9.25 May   10.00 CQEEB   1.00  10.81    72  1678
BD    11.13 May   12.50  BDEV   1.19  10.67    26    64
CPU    5.94 May    7.50 CPUEU   0.63  10.53    60   499
ENMD  25.00 May   30.00 QMAEF   2.63  10.50    11   766
NMR   19.19 May   20.00 NMRED   2.00  10.42    15   260
OXHP  16.38 May   17.50 OQXEW   1.69  10.31    44  1413
QNTM  20.94 May   22.50 QNQEX   2.13  10.15    12  1061
RCOT  13.75 May   15.00 ROQEC   1.38  10.00    11   308





************************************************************
NAKED PUT SECTION
************************************************************
Technical Analysis...An Overview...

There are three types of information that most traders use to
determine a bias or opinion on a specific stock. The first is
"fundamental" analysis; income statements, balance sheets, and
the future projections for revenues and earnings. The second
is "sentiment" analysis; investor expectations of market and
individual stock performance, news or upcoming events and other
possible activities such as mergers and stock splits. The final
category is "technical" analysis or "charting".

This method relies on the actual history of trading and price
in a specific stock. The issue can also be a future, index, or
industry group. Most analysts believe that charts can reflect
all of the known information and public opinion surrounding a
particular stock or security.

Technical analysis involves the use of historical pricing to
identify trends and patterns. Different types of indicators are
displayed on price charts. Moving averages, support/resistance
lines, envelopes, Bollinger bands, and momentum curves are all
common indicators. Price, time and volume are all inputs into
these indicators. Price reflects the level of change in the
attitude of investors. Time measures the cycle or period of
change and volume (relative to its past history) measures the
intensity of that change.

Various systems have been developed to help traders form an
opinion based on the chart patterns and predict future turning
points (and direction) in the underlying issue. Analysis begins
by determining the strength and direction of a trend. The basis
for future predictions is supported by the fact that once a
trend is in motion, it will continue in that direction until a
change in character occurs.

Successful analysts will look at many indicators from different
perspectives and identify signals that forecast upcoming changes
or trend reversals. When you can do this accurately on a regular
basis, it is time to take the ultimate test by placing a bet on
the horse of your choice in the giant race that is the stock
market!
------------------------------------------------------------------
Selling naked-puts offers an attractive method of generating small
profits on portfolio collateral. A premium is received for the
obligation to buy the underlying security at a specific price. A
successful outcome is achieved if the stock remains above the sold
strike at expiration. It is also one of the best ways to achieve a
technically correct entry position for owning a stock.
                      *** 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

COOL   19.06  19.38   Mar  15.00  0.50  *$  0.50  11.6%  25.2%
ENMD   20.44  25.00   Mar  17.50  0.63  *$  0.63  10.7%  23.3%
HRBC    7.25   6.13   Mar   5.00  0.31  *$  0.31  17.6%  19.1%
SOF    21.50  19.63   Mar  17.50  0.44  *$  0.44   8.7%  19.0%
PSIX   37.88  39.50   Mar  35.00  1.00  *$  1.00   7.5%  16.4%
EGRP   46.06  50.81   Mar  35.00  2.13  *$  2.13  18.8%  16.3%
SDLI   54.50  65.75   Mar  45.00  1.38  *$  1.38  10.1%  14.6%
OMKT   12.69  11.63   Mar  10.00  0.38  *$  0.38  13.0%  14.1%
DRMD    6.75   6.63   Mar   5.00  0.25  *$  0.25  15.6%  13.6%
BTC    14.50  15.31   Mar  12.50  0.38  *$  0.38   9.1%  13.2%
DLP    32.56  32.31   Mar  25.00  0.63  *$  0.63   8.8%  12.8%
ZD     16.94  22.38   Mar  12.50  0.44  *$  0.44  11.5%  12.5%
CLST   10.94  11.00   Mar   7.50  0.25  *$  0.25  10.2%  11.1%
PRD    24.25  21.63   Mar  20.00  0.44  *$  0.44   7.5%  10.8%
IGEN   28.50  27.63   Mar  22.50  0.63  *$  0.63  10.0%  10.8%
CIEN   22.44  26.81   Mar  17.50  0.44  *$  0.44   8.9%   9.7%
BVSN   40.00  61.00   Mar  30.00  1.00  *$  1.00  11.1%   9.7%
THQI   23.25  20.00   Mar  15.00  0.69  *$  0.69  12.9%   9.4%
CIEN   27.81  26.81   Mar  22.50  0.38  *$  0.38   6.1%   8.9%
SUIT   32.00  25.50   Mar  25.00  0.88  *$  0.88  12.1%   8.8%
ITVU   22.75  22.13   Mar  15.00  0.38  *$  0.38   7.7%   8.4%
CIEN   24.19  26.81   Mar  17.50  0.63  *$  0.63  11.5%   8.3%
PSUN   27.00  31.50   Mar  20.00  0.69  *$  0.69  11.3%   8.2%
GLIA   27.00  26.00   Mar  20.00  0.31  *$  0.31   5.4%   7.9%
LUK    30.50  30.69   Mar  25.00  0.25  *$  0.25   3.6%   7.8%
ZONA   32.25  29.00   Mar  25.00  0.75  *$  0.75  10.4%   7.5%
SPLN   54.06  57.81   Mar  40.00  0.38  *$  0.38   3.4%   7.4%
BTIM   16.63  15.38   Mar  10.00  0.25  *$  0.25   7.0%   6.1%
AVID   30.00  29.81   Mar  22.50  0.44  *$  0.44   6.8%   5.9%
CATP   30.00  22.31   Mar  22.50  0.44   $  0.25   3.9%   3.4%
NAV    45.00  38.13   Mar  40.00  0.63   $ -1.24  -9.1%   0.0%
OXHP   19.00  16.38   Mar  17.50  0.44   $ -0.68 -10.4%   0.0%
--------------------------------------------------------------
MCHM    9.75  10.13   Apr   7.50  0.56  *$  0.56  22.3%  16.2%

Previously closed: AWA

-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   19.38  Mar 17.50  QOO OW  0.63  321   16.87   9.69%
ITVU   22.06  Mar 20.00  QYU OD  0.38  56    19.62   5.32%
----------------------------------------------------------
AMMB    9.88  Apr  7.50  UKQ PU  0.44  140    7.06  18.21%
ARTT    8.38  Apr  7.50  AOQ PU  0.75  20     6.75  23.28%
ITX    15.06  Apr 12.50  ITX PV  0.31  0     12.19   8.21%
MCHM   10.31  Apr  7.50   QQ PU  0.38  0      7.12  15.56%
NWAC   25.69  Apr 22.50  NAQ PX  0.50  56    22.00   6.59%
WKR    21.38  Apr 17.50  WKR PW  0.38  0     17.12   7.52%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

COOL   19.38  Mar 17.50  QOO OW  0.63  321   16.87   9.69%
ITVU   22.06  Mar 20.00  QYU OD  0.38  56    19.62   5.32%
----------------------------------------------------------
ARTT    8.38  Apr  7.50  AOQ PU  0.75  20     6.75  23.28%
AMMB    9.88  Apr  7.50  UKQ PU  0.44  140    7.06  18.21%
MCHM   10.31  Apr  7.50   QQ PU  0.38  0      7.12  15.56%
ITX    15.06  Apr 12.50  ITX PV  0.31  0     12.19   8.21%
WKR    21.38  Apr 17.50  WKR PW  0.38  0     17.12   7.52%
NWAC   25.69  Apr 22.50  NAQ PX  0.50  56    22.00   6.59%
******************************************************************
Company Descriptions
******************************************************************
COOL - Cyberian Outpost  $19.38     *** 1 week play ***

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 moved
higher on news of improved fiscal Q4 revenues, expected to be
about four times the year ago level. The company plans to report
in the first week of April and we think the recent support near
$17 makes this play favorable speculation for one week.

Mar  17.50  QOO-OW  Bid=0.63  OI=321  CB=16.87  ROI=9.69%

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
******************************************************************
ITVU - InterVU  $22.06     *** 1 week play ***

InterVU enables businesses, advertisers and Web developers to
present videos online. Multiple viewers can receive videos
quickly and efficiently. InterVU also creates banners; offers
VUTOPIA, which targets specific markets; and presents live
broadcasts. The future earnings outlook is favorable, revenues
are strong and there is also rumor that Broadcast.com and ITVU
may be working together on some new projects.

Mar  20.00  QYU-OD  Bid=0.38  OI=56  CB=19.62  ROI=5.62%

Chart = http://quote.yahoo.com/q?s=ITVU&d=3m
******************************************************************
AMMB - Amresco Inc.  $9.88     *** Merger/Takeover? ***

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. A new long-term play
to own the stock well below the recent trading range.

Apr  7.50  UKQ-PU  Bid=0.44  OI=140 CB=7.06  ROI=18.21%

Chart = http://quote.yahoo.com/q?s=AMMB&d=3m
******************************************************************
ARTT - Advanced Radio Telecom  $8.38  *** Technicals Only! ***

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. The cost-basis is below recent support at $7.

Apr  7.50  AOQ-PU  Bid=0.75  OI=20  CB=6.75  ROI=23.28%

Chart = http://quote.yahoo.com/q?s=ARTT&d=3m
******************************************************************
ITX - IT Group  $15.06     *** Own This One! ***

The IT Group manages hazardous-waste cleanups. Their services
include identification and assessment of risks; and planning and
execution of property and equipment decontamination including
engineering, construction, and facilities management. They clean
up land disposal sites that contain hazardous materials. They
agreed to buy assets of ICF Kaiser's Environment and Facilities
Management Group for $82 million in cash adding $120 million to
revenue, $20 million to operating cash flow and about $0.20 per
share to earnings annually. It was obviously a favorable move!

Apr  12.50  ITX-PV  Bid=0.31  OI=0  CB=12.19  ROI=8.21%

Chart = http://quote.yahoo.com/q?s=ITX&d=3m
******************************************************************
MCHM - MacroChem  $10.31   *** On its way now! ***

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-PU  Bid=0.38  OI=0  CB=7.12  ROI=15.56%

Chart = http://quote.yahoo.com/q?s=MCHM&d=3m
******************************************************************
NWAC - Northwest Airlines  $25.69     *** Long-Term Play ***

Northwest Airlines, the US's fourth-largest airline, with hubs in
Detroit, Memphis, Minneapolis-St. Paul, Osaka, and Tokyo. They
serve about 400 destinations in over 80 countries. With about 400
aircraft, Northwest is one of the world's top air cargo carriers.
Among its other interests are the WORLDSPAN computer reservation
system and subsidiaries such as Northwest Aerospace Training. We
like this price to own the stock for future covered-call plays.

Apr  22.50  NAQ-PX  Bid=0.50  OI=56  CB=22.00  ROI=6.59%

Chart = http://quote.yahoo.com/q?s=NWAC&d=3m
******************************************************************
WKR - Whittaker Corporation  $21.38  *** Blue Sky Above! ***

WKR develops innovative fluid control and fire safety systems for 
aerospace and industrial applications. Stock gapped in December
after the EPA announced WKR is set to be taken off the Superfund
National Priorities List and Tennenbaum & Co. mentioned it would
like to acquire the company. Recent signs of accumulation and a
positive earnings report 3/1/99 are driving this one higher.

Apr  17.50  WKR-PW  Bid=0.38  OI=0  CB=17.12  ROI=7.52%

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





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*************************************************************
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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.





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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