Option Investor
Newsletter

Daily Newsletter, Sunday, 04/04/1999

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The Option Investor Newsletter            Sunday  4-4-99  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 4-2           WE 3-26          WE 3-19          WE 3-12
DOW     9832.51 + 10.27  9822.24 - 81.31  9903.55 + 27.20  +140.27  
Nasdaq  2493.37 + 74.20  2419.17 -  2.10  2421.27 + 39.74  + 44.42  
S&P-100  649.92 +  6.24   643.68 -  6.43   650.11 +  1.84  +  9.28  
S&P-500 1293.72 + 10.92  1282.80 - 16.49  1299.29 +  4.70  + 19.12  
RUT      398.74 +  4.82   393.92 -  2.66   396.58 -  1.80  +   .37  
TRAN    3309.16 + 49.05  3260.11 - 78.37  3338.48 + 70.97  - 45.28  
VIX       23.34            25.83            25.84            25.81
Put/Call    .62              .50              .53              .60
******************************************************************

Goldilocks, where are your bears?

The jobs report came in at a very favorable +46,000 new jobs
compared with estimates of +166,000. The market will like that
but the unemployment rate dropped to a level not seen since Feb
1970 of 4.2%. This would concern the Fed except that the average
hourly wage increased only +.03 per hour. The tight labor market
is still not putting pressure on wages which would prompt a Fed
rate hike to stop wage inflation. The Fed has to like this economy.
Good unemployment, no wage pressures, increasing earnings, better
production from improved technology and increased competition on
the Internet holding prices in check. They are on automatic pilot
until something changes drastically. The recently released FOMC
minutes showed no worry over interest rates for the near future.

If the Fed is happy then the markets should be happy and we should
be happy. The Goldilocks economy is alive and well. Asia is improving
and manufacturing is ramping up again. The NAPM report on Thursday
came in at 54.3 compared to 52.4 in Feb. Any number over 50 is
considered an expanding manufacturing sector. The earnings estimates
for earnings this quarter are now +6.4% and +9 to +12% for the next
quarter. With earnings increasing and the Fed on hold, the market 
should continue to move upward for several weeks unless we get 
earnings surprises to the downside.

Now that we are moving into the heavy earnings reporting season
we could see some new cash coming into the market. There is 
nothing visible on the horizon to cause market turmoil. The focus
should be clearly on the earnings announcements and the pre-earnings
runs. This could be a good two to three weeks for call buyers.

The market internals are still not good but could improve in the
short term. Even though the market was up on Friday the decliners
still beat the advancers but only by a slim margin. Currently the
advance has been limited to the large caps and blue chip stocks.
70% of the stocks on the NYSE are trading below their 200 day
moving averages. Only 30% are advancing above the average. This
is either a warning of things to come or an opportunity for the
70% to start gaining ground in a broad market advance. While my
market view is bearish for the second half of the year due to Y2K
cautions, my immediate view is for the blue chip and tech leaders
to move upward through this earnings period. This will continue
to be a stock pickers market. Stocks making new highs should 
continue to do well and the tech sector (Nasdaq) should be making
new highs as well. 

The chances of a positive trending market over the next three
weeks provides a good opportunity for call buyers to enter and
exit several new sequential positions. While call buyers can
make good profits when a stock is moving up there is another
strategy which can be profitable for two of the three directions
a stock can take. Stocks either go up, go down or stay the same.
While call buyers only make money when a stock goes up, put sellers
make money when the stock goes up, stays the same or only goes
down slightly. The coming week is the ideal week to sell puts in
the current monthly cycle. Options expire on April 16th, only two
weeks away. Puts still have value and the market is expected to 
trend up. Selling naked puts requires a margin account and is 
similar to doing covered calls. When you sell naked puts you do
not actually buy the stock. Your sell is covered by cash in the
account. This cash still accrues interest during the play. The
only risk is that the stock will fall below the strike price you
sold and the stock will be put to you by the buyer. 

For example: If you sold a $25 put on XYZ with XYZ @ $27.50 you 
would receive $1.13 per share. The rough margin requirements for 
this play would be around $9.50 for a return on investment of 12%
for two weeks. The stock must drop to less than $23.88 for you to
lose money. ($25 strike - $1.13 premium received) If the stock 
remains above $25 the option would expire worthless and you keep 
the entire $1.13 per share. 

This is just another way to make a bullish play on a stock without
having to be exactly right about the stock direction to make money.
It is slower and more conservative but a technique you could add
to your play book. See the Naked Put section for some stocks to
play.


Good Luck

Jim Brown 
Editor



*****************************************************
JIM'S PLAYS		 
*****************************************************

Last Sunday the only open position I had was OEX puts
that I bought on pure speculation. The Fed meeting and
the numerous economic reports due out last week had
me concerned we could see a sell off. The sell off came
but only after a huge Monday that put my puts almost
out of reach. I was out of the office on Monday and 
did not sell when the market spiked up. With the two
down days on Tue/Wed I was almost back in the money
again but the late day Thursday rally kept OEX-640
just out of my reach. I placed a limit sell on Thursday
hoping for a sell program that would push the market
down to my price but it never came. I considered 
changing to market just before the close but with the
jobs report on Friday I decided to hold over. Probably
a bad move at this point. 

After the big market spike on Monday I did not see 
an entry point for any of the stocks I wanted to play
with calls early in the week. The Wednesday drop at 
the close setup several but my stated objective to go
into the long weekend flat kept me from starting 
several plays.  I did take advantage of the profit 
taking on EMC Wednesday and the firming on Thursday 
to open a new position. It looked like a bottom formed
at $126.50 on Thursday and I could not pass it up.

I am going to sell some naked puts on Monday and
I have several aggressive call positions to initiate
if the market opens positive (and doesn't gap up +100).
Looking forward to an active two weeks!! 



Current:

LONG APR-OEX-640 PUTS  OEY-PH @10.63 
LONG APR-EMC-130 CALLS EMB-DF @ 4.63




*****************************************************
NEW FEATURE - OPTION TRADING CLUBS
*****************************************************

We have had numerous requests lately to sponsor local option
trading clubs. The concept is to have a local group of
options traders that meet regularly and swap stories about
recent trades, techniques used, thoughts on new plays,
problems and solutions, etc. The most common problem with
option traders is a lack of advice and answers. 

Should I sell puts or write calls? Should I write calls 
on my stock if I don't want to sell my stock? How do you 
actually do a spread? Do you think AOL is going to correct?
What would be good entry point for CMGI? etc, etc, etc

We envision a Saturday morning at a local coffee shop 
but it would depend on the desires of the local group.

We obviously cannot support hundreds of local groups
all over the world. To this end we are looking for 
people to volunteer to organize the first meeting of a 
local group in their area. These people would be contacted 
(email) by anyone interested in participating in their area 
and organize a first meeting. Participants could then 
decide on who/what/when/where/how they wanted to conduct 
future meetings.

We will collect and redistribute the names of people 
who are interested. If you are interested in possibly
participating in this type of trading club then email
us at the addresses below. If you would just like to
visit the meetings then use the "visit" address. If you
would be interested in helping to organize the first
one in your area then use the organize address.

We need your first name, email address and city/state.
If you are outside the US then add the country as well.

You must be a subscriber to organize but anybody can
participate. Your email addresses will not be given
out. You will be sent the address of the organizer we
select for your area. You can then contact them for
first meeting details. Once organized we will publish
the cities and contact addresses for the organizers
so new readers can join active clubs already in progress.


To register to receive the address of an organizer in 
your area email to   

            visit@OptionInvestor.com

To register as a possible organizer for your area
email to     

            organize@OptionInvestor.com






*********************************************************
Market Sentiment - By Pinnacle Capital Advisors
*********************************************************
Sunday, April 4, 1999


Everyday Under D10K Signals Caution

April's favorable employment report should spring the Dow Jones 
Industrial average above D10K and into record territory -- so
everyday under D10k should signal caution. It's has often been
said that if the market does NOT do what you expect, get out. 
Watch carefully how long it takes to get airborne. With April's
favorable employment report, many analysts will be proclaiming
NO inflation again and spark a broad market ascent. This may
happen but we still have certain technical and sentiment
indicators that may suggest that we may be range bound. 



BEARISH Signs:

Top Reversals             Several industry sectors revealed 
                          Tweezer top reversal formations on 
                          Friday (3/19) and Tuesday (3/30).

Interest Rates            Bouncing off 200dma and holding above
                          important 5.50% level (5.673%)

Russell 2000              Trading below key 400 level.  Generals  
                          leading but troops are not following.

Advance/Decline Line      Enormous gap between INDU and A/D line. 



BULLISH Signs:


Higher Highs              Several industry sectors revealed 
                          Advanced higher and took out prior
                          highs including Nasdaq 100, Morgan 
                          Stanley Technology, Internet, Software,
                          and Networking.    

Peak Open Interest        April's peak open interest (1.41)
                          climbed higher indicating that Put open
                          is building.

Market Volatility (VIX)   Trading BELOW 50-day moving average
                          (23.34)



 


 


OTM Call Analysis

As we move through April's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 650-700 among option
speculators. As we have been documenting, out-of-the-money
(OTM) call buying has been climbing and may serve as overhead resistance.

March Expiration Cycle
OEX OTM Call Analysis (Open Interest MAR 650-700)
-----------------------------------------------------------------
Date                 Open Interest     Change %    Alert
-----------------------------------------------------------------
Friday, March 5             58,085         -
Friday, March 12            68,675      +18.2%
Thursday, March 18          85,124      +47.6%     *    
   

April Expiration Cycle
OEX OTM Call Analysis (Open Interest Apr 650-700)
-----------------------------------------------------------------
Date                 Open Interest     Change %    Alert
-----------------------------------------------------------------
Friday, March 19            35,626         -
Friday, March 26            60,266      +69.2%     
Friday, April 2             70,952      +99.2%     *
 




Market Sentiment at a Glance
********************************************************************   
                                Friday     Tues      Thurs  
Indicator                       (4/2)     (4/6)      (4/8) Alert
********************************************************************

Pinnacle Index (OEX):          
-----------------------------------------------------------------
Overhead Resistance (650-665)     1.4
Underlying Support  (625-640)     2.6                        *


Put/Call Ratios:
-----------------------------------------------------------------
CBOE Total P/C Ratio               .6
CBOE Equity P/C Ratio              .5                        *   
OEX P/C Ratio                     1.5                        *                


Peak Open Interest (OEX):
-----------------------------------------------------------------
Puts                              520
Calls                             700
P/C Ratio                        1.41                        *


Market Volatility Index (VIX):	
-----------------------------------------------------------------
CBOE VIX                        23.34                        *



Investors Intelligence:
-----------------------------------------------------------------
Bullish                         55.6%                        *  
Bearish                         31.6%                        *
		



The Power of Sentiment Analysis

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

 
Pinnacle Index
-----------------------------------------------------------------
OEX                             Friday      Tues      Thurs
Benchmark                       (4/2)       (4/6)     (4/8)
-----------------------------------------------------------------
               
                    (660-665)      3.2
                    (650-655)       .9
Overhead Resistance (650-665)      1.4

OEX Close                       649.92

Underlying Support  (625-640)      2.6
                    (635-640)      2.0
                    (625-630)      2.5
 
Average ratings: 
Resistance levels 2.0 / Support .5

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


Put/Call Ratio 
-----------------------------------------------------------------
                                Friday      Tues       Thurs
Strike/Contracts                 (4/2)      (4/6)      (4/8)
-----------------------------------------------------------------
CBOE Total P/C Ratio               .63
CBOE Equity P/C Ratio              .47
OEX P/C Ratio                     1.43


Peak Open Interest (OEX)
-----------------------------------------------------------------
                     Friday         Tues         Thurs
Strike/Contracts     (4/2)         (4/6)         (4/8)
-----------------------------------------------------------------
Puts                 520 / 15,222
Calls                700 / 10,780
Put/Call Ratio       1.41

 


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   

April 1, 1999                           23.34


 


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   
March 17, 1999                        52.6        17.6     
March 24, 1999                        55.9        29.7     
March 31, 1999                        55.6        31.6  *   



 
*********************************************************
Market Posture
*********************************************************
As of Market Close - Friday, April 2, 1999 

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

DOW Industrials    9,500  10,000   9,833    Neutral   3.19                
SPX S&P 500        1,250   1,325   1,294    Neutral   3.19     
OEX S&P 100          630     660     650    Neutral   3.19      
RUT Russell 2000     400     435     399    BEARISH   3.12     

NDX NASD 100       2,000   2,100   2,146    BULLISH   3.29       
MSH High Tech        900   1,000   1,038    BULLISH   3.29              

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         800     900     898    Neutral   3.5              
CWX Software         600     650     651    BULLISH   3.29                
SOX Semiconductor    350     400     387    Neutral   3.5        
NWX Networking       420     450     458    BULLISH   4.1  *              
INX Internet         500     580     591    BULLISH   3.29        

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          650     710     666    Neutral   3.19                      
XBD Brokerage        350     415     403    Neutral   3.19          
IUX Insurance        600     655     634    Neutral   3.19                

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           875     940     898    Neutral   3.19        
DRG Drug             390     420     410    Neutral   3.25         
HCX Healthcare       775     835     805    Neutral   3.25                  
XAL Airline          170     185     172    Neutral   3.30      
OIX Oil & Gas        250     260     260    BULLISH   3.30                        



Posture Alert

The broad market backed off record territories to finish 
the short trading week just shy of record levels. We have
turned Bullish on the Networking sector after this index
hit a new 52-week high.

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

www.OptionInvestor.com/marketposture
 


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

NAPM Services       Mar    Forecast:  --     Previous: 57%

Tuesday:

Challenger Layoffs  Mar    Forecast:  --     Previous: 62K   
LJR Redbook         4/3    Forecast:  --     Previous: 0.6%
Leading Indicators  Feb    Forecast:  0.2%   Previous: 0.5%
Wholesale Inventory Feb    Forecast: -0.1%   Previous: -0.2%

Wednesday:

Consumer Credit     Feb    Forecast:  $6.0B  Previous: $14.7B

Thursday:

Jobless Claims     4/3     Forecast:  295K   Previous: 289k 
Chain Store Sales  Mar     Forecast:  --     Previous: 7.0% 
Export Prices      Mar     Forecast:  --     Previous: 0.1%
Money Supply(M2)   3/29    Forecast:  --     Previous: $19.9B

Friday:

Producer Price Indx Mar    Forecast:  0.2%   Previous: 0.4%   




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

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

Their quotes are delivered in a fully customizable spreadsheet
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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              4-4-99
Sunday                   2  of  6


*****************************************************
Last weeks change for this weeks picks:
*****************************************************

Index    Last  Week
Dow    9832.51 10.27
Nasdaq 2493.37 74.20
$OEX    649.92  6.24
$SPX   1293.72 10.92
$RUT    398.74  4.82
$TRAN  3309.16 49.05
$VIX     23.34 -2.49

Stock          Week

RNWK    157.88 37.88 Expect Profit taking.(remains split candidate)
AMZN    171.00 31.94 New, Earnings 4/27, split candidate
QCOM    137.00 25.45 Earnings are April 21st.  Look for dip
AOL     150.00 23.44 Internet Blue chip with $150 bln market cap!!
VISX    113.50 18.25 New, Earnings run in progress!!  Earnings 4/14/99
VOD     186.50 14.31 New, CDMA technology is hot!
DCLK    193.13 10.88 Dropped, moved to a Put play
COF     154.38 10.82 New, Earnings run in progress!!  Earnings 4/15/99
SUNW    126.19  9.69 Splits 2:1 on April 8th (Thursday)
YHOO    179.75  8.38 Earnings run in progress.  Earnings 4/7/99
CMVT     86.00  6.12 New, splits 3:2 on April 15th
EMC     128.63  5.76 Thursday looked like an Entry point.
YUM      73.56  5.62 New, strong growth, new price targets
INSS     70.00  5.43 Dropped, split Friday April 2nd.
CMGI    187.31  4.94 Internets on fire again!
AEOS     73.38  4.19 New, splits 2:1 on May 3rd
BBBY     37.63  4.19 New, Breakout in progress
GE      111.63  3.81 Earnings are April 8th!!!
MSFT     92.69  3.62 Trial delay could provide room for Earnings run
EGRP     60.88  3.00 New, Earnings run with earnings 4/14/99
PVN     109.44  1.76 New price target is $125
WMT      93.25  1.69 Splits 2:1 on April 19th.
TLAB     98.56  1.38 Quietly climbing.  Earnings are 4/26/99
SCH      94.25  1.25 Time for the Earnings Run (earnings April 15th)
BVSN     60.31  0.55 Dropped, not moving fast enough
WHR      53.06  0.01 Also provided an Entry point. Earnings 4/15/99
ALD      50.25 -0.12 Confirm market direction
AHP      66.50 -0.19 Dropped, not moving fast enough
WCOM     89.25 -0.62 Look for renewed momentum before playing
MER      87.75 -1.00 Time for an Earnings Run (4/13/99)
OMC      76.38 -1.12 Provided an Entry point on Thursday
LOW      61.31 -2.50 Dropped, not moving fast enough
MWD      99.94 -2.69 Split candidate with shareholder meeting 4/9/99
FSR      89.19 -3.43 Dropped, not moving, may still have a split run

Puts

EBAY    138.63 -15.8 Competition from AMZN is bad news
LHSG     29.75 -6.13 Digging their way lower.  No news
LTR      73.00 -5.94 New, Catching flack for cigarette sales
CVS      45.31 -3.32 New, Competition may steal marketshare
EMR      51.81 -2.57 Technicals don't look good
ABS      53.06 -2.12 New, Very bearish performance
CMB      79.38 -0.71 Traders continue to punish, but may have bottomed
MU       49.31  2.45 Dropped, Upgrade Wednesday killed put play
ELN      71.50  4.94 Dropped, conference call inspired investors.
DCLK    193.13 10.88 New, Time to catch post split depression




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

EGRP - Etrade Group
VOD  - Vodaphone
YUM  - Tricon Global
BBBY - Bed Bath and Beyond
CMVT - Comverse Technology
AEOS - American Eagle
AMZN - Amazon.com
VISX - Visx, Inc
COF  - Capital One Financial Corp

PUTS: 

DCLK - Double Click
ABS  - Albertsons
LTR  - Loews Corp
CVS  - CVS Corp




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

AHP $66.50 +1.25 (-0.19)  AHP has its back against the wall.  
Even though it managed to post a gain on Thursday, AHP is 
floating in rocky waters.  Some competitors have recently 
gained FDA approval for drugs that will provide new 
competition for AHP, Sands Bros. downgraded the company this 
past Tuesday, and a $110 million lawsuit against AHP over its 
discontinued weight loss drugs went to trial on Wednesday.  
AHP may also have some strong resistance in the near future at 
$67.75.  It bounced off this level twice in the past week.  We 
are dropping it as a play until it breaks and holds above the 
$68 level.

*****

INSS $70.00 +0.06 (+5.44)  INSS really picked up the pace in 
the shortened week of trading. It added +$5.44 on split 
momentum.  We have to drop INSS ahead of its 3:2 split on 
Monday April 5th.  Hopefully you were able to close your 
positions safely on Thursday as we had recommended.  As with 
most of our split plays, we drop them due to the fact that 7 
out of 10 companies suffer from post split depression.  We 
will certainly re-add them to our list of plays if they 
resume their uptrend. 

*****

LOW $61.38 +0.88 (-2.43)  Lowe's seems to be rolling between 
a low of around $60 and a high of approximately $65 as of late.  
LOW just bounced off its 30 dma and could continue the trend.  
However, we are dropping it as a play.  It hasn't been moving 
fast enough.  We feel that there are better plays out there.  

*****

FSR $89.19 (-3.75)  FSR may be a bright star in the eyes of 
its stockholders, but it certainly isn't a shooting one.  
This stock has been dragging its feet for too long and we 
can no longer carry it on our list.  Keep in mind this stock 
splits 3:1 after the bell on April 15th, so you may still see 
a pre-split run for FSR.  

*****

BVSN $60.31 (+.55) We are dropping BVSN.  The stock just
can't seem to make a substantial move up.  As with Murphy's law
go, it will probably go up $10 on Monday, but we just feel we
will wait for it to show some strength and put our energy
on some better moving stocks.


PUTS: 

ELN $71.50 (+4.94)  The conference call on Friday evening 
had more of an impact on the stock than anticipated.  ELN 
posted gains 3 out of 4 days this week. With these strong 
advances, the stock not only crossed over its 200 dma, but 
also touched its 10 dma.  In light of the changed 
circumstances, we're dropping ELN as a put play.

*****

MU $49.31 (+2.18)  Just our luck!!  We finally decide to add 
Micron as a put and what happens??  It jumps up $4 in two days 
to position itself right on its 10 dma.  On Wednesday, Micron
and other chip stocks got a big boost from the upgrades on 
industry leaders, XLNX and LSI. This spike is just too steep 
for us to keep MU on our put list and we're dropping it. 


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

VOD  - Vodaphone
MWD  - Dean Witter
SCH  - Charles Schwab
GE   - General Electric
QCOM - Qualcomm
AOL  - America On Line
MWD  - Morgan Stanley
RNWK - RealNetworks
TLAB - Tellabs


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

Symbol - Stock      Splits/Date  

NEG  - Energy East     2:1 04-01-99 ex-date 04-05
DCLK - Double Click    2:1 04-02-99 ex-date 04-05 current play
INSS - Intl NtwkSvcs   3:2 04-05-99 ex-date 04-06 
SUNW - SunMicro        2:1 04-08-99 ex-date 04-09 current play
INTC - Intel           2:1 04-11-99 ex-date 04-12
EXDS - Exodus Comms    2:1 04-12-99 ex-date 04-13
CMVT - Comverse Tech   3:2 04-15-99 ex-date 04-16 current play
FSR  - Firststar Cor   3:1 04-15-99 ex-date 04-16 
MNMD - MiniMed Inc.    2:1 04-16-99 ex-date 04-19
WMT  - Walmart         2:1 04-19-99 ex-date 04-20 current play
ZQT  - Quicksilver     3:2 04-23-99 ex-date 04-26
FDX  - FDX Corp        2:1 05-05-99 ex-date 05-06
COX  - Cox Comms       2:1 05-13-99 ex-date 05-14
AOC  - Aon Corp        3:2 05-17-99 ex-date 05-18
IBM  - IBM             2:1 05-26-99 ex-date 05-27 
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28 current play
EMC  - EMC Corp        2:1 05-28-99 ex-date 05-31 current play
PFE  - Pfizer Corp     3:1 To Be Announced        

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 ! 

*****************************************************
SUNW - Sun Microsystems, Inc. $126.19 (+9.69)(+6.12)

SUNW splits 2-1 on April 8th.  

See details in sector list

Chart = http://quote.yahoo.com/q?s=SUNW&d=3m
*****************************************************
CMVT - Comverse Technology, Inc $86.00 (+6.12)

SUNW splits 3-2 on April 15th.  

See details in sector list

Chart = http://quote.com/q?s=cmvt&d=3m
*****************************************************
WMT - Wal-Mart $91.56 (-3.19)(-1.63)(+3.13)(+9.25P5W)

Stock Splits 2:1 04-19-99 

See details in sector list

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

*****************************************************
SUNW - Sun Microsystems, Inc. $126.19 (+9.69)(+6.12)

SUNW had a great run this last week and is trading just
below its 52-week high.  We foresee a continued split and
earnings run.  The split is April 8th and earnings are in
a couple of weeks.  With the highs SUNW has achieved, the
only resistance is $129, its 52-week high.  This stock has
a lot of momentum and intra-day pullbacks are buyable.

SUNW also benefited this week from its conference with
AOL about their strategic alliance.  Many analysts feel
that this alliance will be great for both companies.  
Lehman reiterated its strong buy rating with a price target
of $135.

See details in sector list

Chart = http://quote.yahoo.com/q?s=SUNW&d=3m
*****************************************************
EGRP - E*Trade Group $60.88 (+3.00)(-2.69)(P3W +16.50)

This play is really simple!  Take a look at the 10-day 
chart.  We are poised for a breakout over $61 on a run to 
earnings April 14.  The price has been rising over the last 
7 trading days on below average volume, indicating no 
sellers at low prices and a modest amount of buyers who are 
already steadily bidding the price up.  Any volume will 
juice EGRP into orbit.  Wait for upward direction (volume 
is the turbo-charging bonus), then execute your plan

See details in sector list

Chart = http://finance.yahoo.com/q?s=EGRP&d=3m

*****************************************************
THE PLAY OF THE DAY -PUTS- ONLY PLAY IN FALLING MARKET
*****************************************************
EMR - Emerson Electric $51.81 (-2.56)(-2.12)(P4W -1.00)

Still a cockroach play.  Where you find one roach, you'll 
find more (thanks Roger).  After trying to keep its head 
above water last Friday and Monday of this week, EMR caved 
in some more.  Its trading pattern seems to be 3 days flat 
then 2 days down substantially.  Here we go again, like a 
staircase to the basement.  Technically, charts don't look 
much worse than this.  EMR has severely negative MACD, 
momentum, stochastic and RSI as the volume has increase.  
The end is not in site.  The best way to make this play is 
to target shoot below $51.  We expect the bugs to come out, 
especially with earnings on May 4.  Confirm market 
direction before playing.

No news, just scientific , eye-glazing product release 
notes. (i.e. "Rosemount Analytical's GCX Process Gas 
Chromatograph chosen "Breakthrough Product of the Year"")

CAUTION: These are thinly traded

See details in sector list

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


***************************************
Brokerage/Banking - Sector
***************************************
COF - Capital One Financial Corp. $154.38 (+10.82)

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.

Back in mid-March, COF bounced off its 50 dma and then never 
looked back. The upgrade to a strong buy from BT Alex Brown 
on March 12th may have triggered the run. But, COF has been 
able to continue its stellar performance on more than just a 
single upgrade. The financial stocks have been hot in the 
last month. COF has its earnings announcement right around 
the corner on April 15th. The financial giant should be able 
to produce some quality numbers. We are now adding it as a 
call play to capture some of this earnings momentum. However, 
keep a close eye on the market's reaction to the employment 
reports and to any further developments in Kosovo. Hopefully 
we will be provided with a solid entry point. 

News: COF set a new all time high of $158.50 in intraday 
trading on Thursday.   After the breakout, we keep watching
for an entry point to jump in and this is a close as we
can get.  As always with a stock moving like this...look
for the profit taking to (start and then) bottom before 
starting a new play. (it may be intraday!)

-April options expire in 2 weeks-

BUY CALL APR-150*COF-DJ OI= 79 at $ 7.63 SL= 5.75
BUY CALL APR-155 COF-DK OI=  0 at $ 5.75 SL= 3.50 (new strike)
BUY CALL MAY-150 COF-EJ OI= 33 at $12.63 SL=10.50
BUY CALL JUN-150 COF-FJ OI=109 at $15.75 SL=12.50 

Picked on April 4th at $154.38      PE= 39
Change since picked     +$0.00      52 week low =$ 51.75
Analysts Ratings    10-6-1-0-0      52 week high=$158.50
Last earnings  01/99  est 0.86      actual 1.04 
Next earnings  04-15  est 1.18      versus 0.96
Average Daily Volume = 433.4 K
Chart = 

******

PVN - Providian Financial $109.44 (+1.75)(-.06)

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. In addition, it recently bought 
GetSmart, giving it an e-commerce loan division. Headquartered 
in San Francisco, PVN still provides traditional banking 
services in its home state of New Hampshire.

We recommended PVN earlier this year, and enjoyed over $20.00 
of gains during the play. We dropped it while it went through 
a correction, but we were watching for a bottom. When PVN 
bounced off its 50 dma on 3-24, we picked it up again. PVN has 
powerful momentum once it gets going--just look at its chart! 
Although its P/E is high, the company believes 50% earnings 
growth is possible this year and one fund manager believes it 
could be even higher. Its price to earnings GROWTH is not out 
of line. Furthermore, we believe PVN could announce a split 
with earnings in a couple of weeks. It last split 3:2 in 
December, 1998, but price gains make a 2:1 split a possibility 
this time--and it has enough authorized shares to do it.

In a March 31st report, Jeffrey K. Evanson, an analyst at 
Piper Jaffray, predicts a 5 to 10% decline in consumer 
bankruptcies in 1999. He says the decline will help certain 
finance companies, including Providian. He has raised earnings 
estimates on PVN by $.15 to $3.30 and upped his price target 
from $116 to $125. With no damaging news from Greenspan on 
Tuesday, PVN moved up until Wednesday morning, but slid lower 
after that to close the week up only $1.75. Watch for 
confirmation, but this may make a good entry point.

Note: Providian could not verify Zacks 4-22 earnings date 
for us. Be forewarned that 2 quarters ago PVN unexpectedly 
announced 1 week early.  (First Call has 4-26)

-April options expire in 2 weeks-

BUY CALL APR-105 PVN-DA OI=203 at $ 7.75 SL=6.00  
BUY CALL APR-110*PVN-DB OI=407 at $ 4.88 SL=3.00  
BUY CALL MAY-110 PVN-EB OI= 64 at $10.00 SL=7.50
BUY CALL JUN-115 PVN-FC OI=108 at $10.13 SL=7.50

Picked on Mar 28th at $107.69      PE = 54
Change since picked  +$  1.75      52 week low =$ 28.38
Analysts' ratings   7-5-2-0-0      52 week high=$118.44
Last earnings 12/98 est  0.62  actual 0.66 surprise=6%
Next earnings 04-22 est  0.72  versus 0.39
Average daily volume = 863.6 K
Chart = http://quote.yahoo.com/q?s=PVN=3m


******

MWD - Morgan Stanley Dean Witter $99.94 (-2.69)(+1.00)(+.50)
                                                 (P6W+14.85)

Morgan Stanley Dean Witter & Co. combines powerful and 
distinct brands to create a global financial services firm. 
The company was formed through the merger of Morgan Stanley 
Group Inc. and Dean Witter Discover & Co. in June 1997.
This combination brings together world-class origination and 
distribution skills and a unique balance of institutional and 
retail capabilities.  The company leverages a global network 
of over 45,000 employees in over 482 offices worldwide.

MWD had a week of profit taking.  Though MWD did trade below
$100, it has held above its 30-dma($98).  A bounce off this
price would be buyable.  Looking at MWD's chart shows a very
nice pattern of higher highs and higher lows, or in other
words, a trend.  Make sure MWD holds above its 30-dma before
initiating new calls. 

MWD's shareholder meeting is scheduled for April 9th.  This
seems to be the most likely time for a possible stock split 
announcement.  MWD also might be benefiting from Goldman
Sachs IPO.  Goldman has announced they will be using a few
of their competitors to help with the offering.  

-April options expire in 2 weeks-

BUY CALL APR- 95 MWD-DS OI=2883 at $6.63 SL=4.75
BUY CALL APR-100*MWD-DT OI=2458 at $3.50 SL=1.75
BUY CALL APR-105 MWD-DA OI=1605 at $1.69 SL=0.75
BUY CALL MAY-105 MWD-EA OI= 737 at $4.75 SL=3.00
BUY CALL JUL-105 MWD-GA OI= 248 at $7.75 SL=6.00

Picked on Feb. 6th at   $89.00   PE = 17
Change since picked     +10.94   52 week low =$ 36.50 
Analysts Ratings     5-4-4-0-0   52 week high=$104.81
Last earnings   03/99 est 1.34   actual 1.76
Next earnings   06-26 est 1.36   versus 1.37
Average daily volume = 2.18 mln
Chart = http://quote.yahoo.com/q?s=MWD&d=3m

*****

SCH - Charles Schwab $94.25 (+1.25)(+3.37)(+5.63)(P4W+14.94)

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. In February, SCH took on $9.4 bln in new customer 
assets, following an $8.8 bln increase the month before. Schwab 
has been growing around 20% per year, but numbers like these 
suggest that is currently enjoying a MUCH higher growth rate. 
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). Schwab's PE is very high and reflects online 
trading growth expectations. As long as online trading 
continues to grow, this market leader will grow with it.

SCH is increasing spending on improvements by nearly $100 mln, 
most of it going toward greater speed and capacity. It set a 
new high Wednesday of $98.00. In the sector, DLJ and MWD have 
both announced strong earnings. MER is expected to announce 
this week, and positive numbers would add more fuel to this 
rocket. Earnings for SCH, due out in a couple of weeks, may 
send the stock higher as well. (We spoke to Schwab, but they 
would not comfirm an exact date.) Analysts consensus was 
revised upward again this week to $.32/share. SCH is in split 
territory and looking good to continue moving up. A 2:1 split 
would require authorization of more shares and shareholder 
approval at its meeting in May. Schwab's market value now 
exceeds that of Merril Lynch. Beware of occasional bouts of 
profit taking along the way.
 
-April options expire in 2 weeks-

BUY CALL APR- 95*SCH-DS OI=1740 at $3.50 SL=1.75  
BUY CALL APR-100 SCH-DT OI=1342 at $1.75 SL=1.00  
BUY CALL MAY- 95 SCH-ES OI= 676 at $7.63 SL=6.00
BUY CALL JUN-100 SCH-Ft OI= 426 at $7.38 SL=5.75

Picked on Feb 21st at $69.06       PE = 100+
Change since picked  +$25.19       52 week low =$18.50
Analysts Ratings   2-0-5-0-0       52 week high=$97.38
Last earnings 12/98 est 0.23   actual 0.26 surprise=+13%
Next earnings 04-15 est 0.32   versus 0.17
Average daily volume = 2.10 mln
Chart = http://quote.yahoo.com/q?s=SCH&d=3m

******

EGRP - E*Trade Group $60.88 (+3.00)(-2.69)(P3W +16.50)

EGRP is the #3 online brokerage firm with almost 550,000
accounts.  EGRP also offers market data, cash and portfolio
management services, and options trading.  About 30% of 
sales come from sales of advertising on its Web site, 
international ventures, subscriptions, and other services.  
Through joint ventures the company also operates in such 
countries as Canada, France, Germany, Japan, the 
Netherlands, and Poland.  SOFTBANK, its joint venture 
partner in E*TRADE Japan, owns 28% of the company. 

This play is really simple!  Take a look at the 10-day 
chart.  We are poised for a breakout over $61 on a run to 
earnings April 14.  The price has been rising over the last 
7 trading days on below average volume, indicating no 
sellers at low prices and a modest amount of buyers who are 
already steadily bidding the price up.  Any volume will 
juice EGRP into orbit.  Wait for upward direction (volume 
is the turbo-charging bonus), then execute your plan

E-Trade has agreed to buy ClearStation, a popular financial 
advisory website offering technical analysis capability to 
over 90,000 subscribers.  Just another helpful tool for e-
traders that will keep 'em coming back to E*Trade.  Terms 
of the deal will not be disclosed until July.  

-April options expire in 2 weeks-

BUY CALL APR-55 QGR-DK OI=2514 at $ 7.63 SL=6.00
BUY CALL APR-60*QGR-DL OI=4022 at $ 4.13 SL=2.50
BUY CALL APR-65 QGR-DM OI=3251 at $ 2.13 SL-1.00
BUY CALL MAY-65 QGR-EM OI= 405 at $ 6.50 SL=4.75
BUY CALL JUL-65 QGR-GM OI=2039 at $10.50 SL=8.00

Picked on April 3 at   $60.88         PE = n/a
Change since picked     +0.00         52 week high=$66.44
Analysts Ratings    3-4-3-0-0         52 week low =$ 5.00
Last Earnings 01/99 est -0.14 actual -0.12 surprise = 14%
Next Earnings 04-14 est -0.16 versus  0.08
Average daily volume = 7.4 mln 
Chart = http://finance.yahoo.com/q?s=EGRP&d=3m


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

PLAYS CONTINUED IN SECTION THREE.

******************************
SEE DISCLAIMER IN SECTION ONE
******************************

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


*****************************************************
MER - Merrill Lynch $87.75 (-1.00)(-2.00)(+3.50)(P4W+18.12)

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.

MER surged past earlier resistance at $80.00 on March 4th and
climbed 5 straight weeks in a row before giving back some gains
over the last 2 weeks on decreased volume. Several positive 
things should help the stock in the near term. First, MER 
recently reversed its policy against online trading. Second, 
MER is considered the favorite acquisition target of Chase 
Manhattan. Third, and very importantly, both DLJ and Morgan 
Stanley Dean Witter have announced very strong earnings, and 
Schwab has pre-announced that it will exceed estimates. 
Finally, MER's own earnings are due out this April 8th, 
according to Zacks and April 13th according to First Call.
(We called Merril Lynch, but they refused to confirm a definite 
date.) If the market cooperates, the stock could see a short 
run-up as the date approaches. On the negative side is a 
lawsuit filed on behalf of individual investors who lost 
money in the 1994 Orange County bankruptcy. MER has already 
settled with the County for $420 mln, but had appealed to 
have the individuals' suit thrown out. The California Supreme
Court just denied the appeal, exposing MER to as much as 
$240 mln more in damages if MER loses in court. MER has also 
been the target of other costly lawsuits in recent 
months. To put these sums in perspective, however, remember 
that MER's annual revenues exceed $35 BILLION.

A planned stock offering by Goldman Sachs, continued positive 
news in the sector, and MER's earnings expected this Thursday 
may renew dwindling volume in this stock. As always, we 
caution against holding over earnings. Plan your trades 
accordingly.

-April options expire in 2 weeks-

BUY CALL APR-85*MER-DQ OI=7769 at $5.00 SL=3.25  
BUY CALL APR-90 MER-DR OI=5044 at $2.63 SL=1.25  
BUY CALL APR-95 MER-DS OI=4887 at $1.06 SL=0.00  riskier
BUY CALL MAY-90 MER-ER OI= 818 at $5.25 SL=3.50
BUY CALL MAY-95 MER-ES OI=1241 at $3.38 SL=1.75
BUY CALL JUL-95 MER-GS OI=1085 at $6.13 SL=4.50

Picked on Feb 28th at $76.75       PE = 30
Change since picked  +$11.00       52 week low =$ 35.75
Analysts Ratings   4-2-5-0-0       52 week high=$109.13 
Last earnings 12/98 est 0.63   actual 0.86 surprise=+37%
Next earnings 04-13 est 1.23   versus 1.30
Average daily volume = 3.29 mln
Chart = http://quote.yahoo.com/q?s=MER&d=3m

*********
Internet
*********

AMZN - Amazon.com, Inc $171.00 (+31.94)

Amazon.com uses the internet to sell books, CDs, and videos.  
They're billed as the largest bookstore retailer in the world.  
They offer almost 5 mln different choices - including 
out-of-print titles - at discounts of up to 40%.  Amazon 
buys directly from distributors or publishers and typically 
delivers an order to its customers within 2-3 days. They are 
presently expanding into other Web-based enterprises.

Wowza!! AMZN is surging ahead once again. Amazon announced on 
Monday it'd go head-to-head with Ebay and gained $10.56 while 
shares of Ebay tumbled. The stock advanced over 7% on optimism 
that they could be the next leader in the internet auction 
business. They are positioning themselves as the Web's
retailing king acquiring stakes in Pets.com, a pet supply 
retailer and Drugstore.com, an online pharmacy. "Bid Click" 
went online Tuesday with over 8 mln members registered and 
about 100 charter merchants. Investors were confident of 
Amazon's future success and the stock jumped up another 
$15.06.  AMZN continued to climb this week and closed at 
$171 on Thursday. The MACD and MOM technicals are positive 
and its 10 dma is in the shadows at around $149-150. 

With Amazon's prolific announcements came the upgrades.  
On Monday, BancBoston Robertson Stevens reiterated a 
"strong buy" rating citing above expected revenue growth.  
Pacific Crest came in on Tuesday and upgraded their rating 
from "buy" to "strong buy".  And their analyst, Steve 
Weinstein, believes AMZN has become the "Wal-Mart of the 
Web in less than 10 years and shares could see plus 800% 
upside over time".  Earnings are due April 27th and are 
expected to have excellent numbers. For the history books, 
AMZN just split 3:1 on 1-99 and 2:1 on 6-98. Are we headed 
for another stock split? Time will tell.  Remember Internet 
stocks are very volatile and move quickly.  To everyone who 
decides to begin a new play, please keep your stops in place.  

***The best play here would be for AMZN to give us a good 
pullback to provide an entry point.  You have to decide:
do you wait for the pullback? or was Thursday it!  This
qualifies as a HIGH RISK play.

-April options expire in 2 weeks-

BUY CALL APR-160 YQN-DL OI=4878 at $17.88 SL=14.00
BUY CALL APR-170 YQN-DN OI=2475 at $12.25 SL= 9.75
BUY CALL APR-180*YQN-DP OI=2727 at $ 7.63 SL= 5.75
BUY CALL MAY-170 YQN-EN OI= 544 at $24.00 SL=18.75
BUY CALL MAY-180*YQN-EP OI= 421 at $19.63 SL=15.25
BUY CALL JUL-180 YQN-GP OI=1943 at $31.00 SL=24.00

Picked on March 18th at $171.00   PE = n/a
Change since picked       +0.00   52 week low =$ 12.87
Analysts Ratings      7-5-8-0-0   52 week high=$199.12
Last earnings 12/98 est= -.18 actual= -.14 surprise= 22.22%
Next earnings 04-27 est= -.29 versus= -.07
Average daily volume = 10.1 mln
Chart = http://quote.com/q?s=AMZN&d=3m

*****

YHOO - Yahoo! $179.75 (+8.38)(P2W -4.62)

Yahoo! is the undisputed leader of Internet media 
applications.  Second only to AOL in advertising revenue, 
YHOO offers up 95 million page views per day making it #1 
on the net according to Hoover's.  They have recently 
agreed to acquire GoeCities and Broadcast.com in separate 
transactions.  Japan's media technology aggregator, 
Softbank owns 28%.

Shame on us for forgetting to mention the earlier rumors 
that YHOO was interested in purchasing Broadcast.com.  The 
fact is this played right into our hands and was primarily 
responsible for YHOO's hefty gains since we recommended it 
Tuesday night.  In simple terms, this gives YHOO the 
ability to increase and retain visitors' eyeballs much like 
television does.  Hello advertising revenue.  That said, 
YHOO reports earnings April 7 (First Call).  Historically, 
they have a 14-36% earnings run into the announcement.  
Target shooting on Wednesday provided a great entry and 
could be effective again.  Support is about $172.  Now's
the time to scale into a position (there is not much
time left).  Confirm market direction before starting the 
play. (remember, we don't recommend holding over earnings).

JP Morgan upgraded YHOO to a buy rating Thursday in the 
wake of Yahoo's $5.7 bln. planned purchase of 
Broadcast.com.  No cash, just stock will change hands in a 
pooling of interest.

-April options expire in 2 weeks-

BUY CALL APR-175 YHV-DO OI=2422 at $15.38 SL=12.00
BUY CALL APR-180*YHV-DP OI=5478 at $12.75 SL=10.25
BUY CALL APR-185 YHV-DQ OI=2112 at $10.75 SL= 7.50
BUY CALL MAY-185 YHV-EQ OI= 173 at $19.50 SL=15.25
BUY CALL MAY-190 YHV-ER OI= 166 at $17.50 SL=13.50

Picked on March 30 at $172.31         PE = 1634 (really!)
Change since picked     +7.44         52 week high=222.50
Analysts Ratings   6-13-5-0-0         52 week low = 22.69
Last Earnings 01/99  est  .08 actual .10 surprise = 25%
Next Earnings 04-07  est  .08 versus .02
Average daily volume = 9.8 mln. 
Chart = http://finance.yahoo.com/q?s=YHOO&d=3m

*****

AOL - America On Line $150.00 (+24.31)(+6.44)(P6W+37.25)

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.  AOL is now the 
proud owner of Netscape.   Revenues should exceed $4.5 
billion in FY99, up from $2.6 billion in FY98.

That consolidation we wrote about last Sunday -- 
fugeddabouddit.  As we also wrote on Tuesday, sometimes 
it's better to be lucky.  Such was the case with AOL last 
week.  Our best conclusion for the huge run-up is that AOL 
is under substantial accumulation by institutions.  Volume 
corroborates this.  We've been pounding the table that AOL 
is the safest and most profitable of the Internet plays, 
and index funds need to buy them to accurately reflect the 
indexes.  The funds that waited for the pullback when the 
announcement first came in January never got it, and were 
left at the starting line as the price doubled over the 
next 90 days -- big miscalculation.  They won't take that 
chance again.  AOL's earnings are April 27.  Again, they 
are a slit candidate at the $120 and above level.  A 2:1 
will require a shareholder vote, but there won't be many 
objecting.  A 3:2 would not require shareholder approval.  
Technical chart looks strong too.  Just remember, nothing
moves in a straight line.  So protect those huge profits 
with stops and enjoy the ride.

Wit Capital initiated a "buy" rating on AOL which may have 
helped shake off concern over a Wall Street Journal article 
that described the potential threat to AOL's earnings 
results if AOL is forced to alter the way it has accounted 
for its acquisition of Netscape (Reuters).  Investors 
warmly greeted Sun's participation with AOL's Netscape 
division to develop a new browser and e-commerce solutions 
too.

-April options expire in 2 weeks-

BUY CALL APR-145 AOO-DI OI=4567 at $11.25 SL= 8.75
BUY CALL APR-150*AOO-DJ OI=9110 at $ 8.50 SL= 6.50
BUY CALL APR-155 AOO-DK OI=4087 at $ 6.38 SL= 4.50
BUY CALL MAY-150 AOO-EJ OI=3787 at $16.50 SL=12.75
BUY CALL MAY-155 AOO-EK OI=1077 at $14.13 SL=11.00

Picked on March 14 at $96.13         PE = 682 (really!)
Change since picked   +53.87         52 week high=$155.00
Analysts Ratings  24-7-0-0-0         52 week low =$ 16.69
Last Earnings 01/99  est .09 actual .09 surprise =0%
Next Earnings 04-21  est .09 versus .04
Average daily volume =  24.9 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=AOL&d=3m

*****

CMGI - CMGI, Inc. $187.31 (+4.94)(+1.18)

CMGI is a direct market service provider which invests in, 
develops and integrates advanced Internet, interactive and 
database management technologies.  The company and its 
subsidiaries offer a wide variety of direct marketing 
services including internet and interactive media direct 
marketing software technologies, literature fulfillment and 
turnkey outsourcing and business-to-business telemarketing 
services.  The company also offers accurate mailing lists, 
database management, design and development capabilities, 
consultative list management and brokerage services. 
(from Hoovers Online)

CMGI had a very tame week for being an Internet company. 
We did see an overall gain of $4.94 for the week, though
most of it came on Friday.  CMGI's chart shows that CMGI
has been in a consolidation phase.  We like the prospects
of this heading higher as excitement about the Internets
continues. 

No current news on CMGI, but watch the news for anything
dealing with the Lycos/USA deal.  CMGI has been a huge
thorn in this deal being accomplished.  CMGI doesn't feel
that USA offered enough for Lycos.  CMGI is the largest 
shareholder in Lycos.

-April options expire in 2 weeks-

BUY CALL APR-180 QGW-DP OI=936 at $13.50 SL=10.25
BUY CALL APR-185 QGW-DV OI=507 at $11.75 SL= 9.50
BUY CALL APR-190*QGW-DW OI=886 at $ 9.50 SL= 7.25
BUY CALL MAY-190 QGW-EW OI=116 at $22.50 SL=17.50

Picked on Mar 23rd at $164.00   PE = 701
Change since picked    +23.31   52 week low =$ 13.52
Analysts Ratings    2-6-1-0-0   52 week high=$226.00
Last Earnings 03/99  est -.23   actual .28 surprise +222% 
Next Earnings 06-12  est -.20   versus .00
Average daily volume = 3.75 mln.
Chart = http://quote.yahoo.com/q?s=CMGI&d=3m

*****

RNWK - RealNetworks $157.88 (+37.88)(-21.88)(+46.63)(P3W+32.20)

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. (-Hoovers)

What a comeback!! RNWK decided to reach new highs and to do
it in style.  RNWK gained $35.69 on Friday.  There continues
to be rumors that RNWK is a likely takeover candidate, maybe
by buy-happy Yahoo!.  More than likely, one of YHOO's 
competitors trying to keep up. There was a great article on Wall 
Street City talking about RNWK.  One point that was made is
that when stocks break above previous highs on very strong
volume, they tend to continue.  Volume was very high on 
Friday.  The negative is that RNWK continues to say it will
remain independent.  

RNWK is continually signing deals with various companies, 
but the excitement has been caused by takeover rumors.  With
the prices RNWK has obtained, a stock split with earnings
is very likely.  They have plenty enough shares to do a 2-1
or 3-1 split.  

***WARNING: After Friday's move, you had better expect
some profit taking.  Wait for the pullback and don't 
try to guess the bottom!

-April options expire in 2 weeks-

BUY CALL APR-145 RNW-DI OI=288 at $22.38 SL=17.25
BUY CALL APR-150*RNW-DJ OI=181 at $19.00 SL=14.75
BUY CALL MAY-150 RNW-EJ OI=177 at $31.75 SL=24.75
(150 strike is highest strike)

Picked on Feb. 27th at  $70.13   PE = n/a
Change since picked     +87.88   52 week low =$ 14.50
Analysts Ratings     1-7-0-0-0   52 week high=$158.25
Last Earnings   01/99 est -.04   actual -.02
Next Earnings   04-27 est -.02   versus -.07
Average daily volume = 1.15 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m


**************
Communications
**************

VOD - Vodaphone $186.50 (+14.31)(+1.00)(P2W-9.81)

Vodaphone, serving over 4 mln. mobile telecom customers is 
the largest mobile telecommunications provider in the UK. 
28% of their revenue is generated from operations in 12 
additional countries.  They also operate messaging, paging 
and mobile data services over their analog and digital 
networks.  Upon completion of their purchase of AirTouch, 
Communications, a former spin-off of Pacific Bell, VOD will 
more than double in size to approximately $10 bln in sales.  
There are no anti-trust issues; the FTC has already cleared 
the way.

It's Back!  VOD has started a new run.  After exploding
off of $170, VOD has been exceptionally strong.  Thursday
is gapped open (as it is prone to do) and traded above 
resistance at $190, but couldn't hold it with the long
weekend ahead of us.  VOD's options tend to be light on
the volume.  An alternative would be to play ATI options, 
but the return potential is not as great.  They are more 
liquid, however.  VOD is thinly traded and generally gaps 
up or down, so stops may not be as helpful, but use them 
anyway.  Some protection is better than none at all.  
Confirm market direction, then make your play.
Conservative players should wait for VOD to close above $190.

Just so you know, ATI uses CDMA technology which is 
superior to TDMA, the kind used by AT&T.  CDMA is growing 
substantially while TDMA is flattening out.  ATI will be 
better able to offer enhanced services in the future as a 
result of Qualcom's and Ericsson's recent agreement on CDMA 
patented technology.  While it seems insignificant now 
(after all, we just want to make a simple call), CDMA is 
the wave of the future.

-April options expire in 2 weeks-
***No May strikes due to low or no open interest

BUY CALL APR-185 VOD-DQ OI= 98 at $ 5.75 SL= 4.00
BUY CALL APR-190*VOD-DR OI=260 at $ 3.13 SL= 1.50
BUY CALL JUL-185 VOD-GQ OI=705 at $15.88 SL=12.25
BUY CALL JUL-190 VOD-GR OI=395 at $13.50 SL=10.50

Picked on April 3 at $186.50      PE = 81
Change since picked    +0.00      52 week high=$197.75
Analysts Ratings   3-3-1-0-0      52 week low =$ 94.00
Average daily volume = 653 K
Chart = http://finance.yahoo.com/q?s=VOD&d=3m

*****

CMVT - Comverse Technology, Inc $86.00 (+6.12)

Comverse is the world's leading supplier of enhanced services 
platforms to wireless and wireline network operators.  For 
instance, their AudioDisk and Ultra lines are communication 
monitoring systems used by police, emergency 911, and even 
financial institutions. They are also the 3rd largest firm in 
the voice-mail market, only behind Lucent and Northern Telecom.  

Comverse made its mark on March 16th.  The company reported 
record 4Q and fiscal results and announced a 3:2 stock split 
set for 4-15-99. The split run began on Monday advancing the 
stock +5.62 on market momentum, but it certainly held its gains 
throughout the ups and downs of the week.  Tuesday CMVT even 
hit a new 52 week high at $87.56 on strong volume during the 
market correction!  Confirm the stocks direction before starting
a new play and target the lows of the day as entry points. Keep
your stops in place - always expect volatility.

The day after their earnings report, Lehman Brothers reiterated
a "buy" on CMVT and raised its target price on the stock to $100 
from $85.  They also increased their 1999 and 2000 fiscal 
estimates due to Comverse coming in at .66 p/s and beating out 
Lehman's own expectations of .63 p/s.  More recently, CMVT was 
selected by B-Band operators in Brazil to provide enhanced 
services for the deployment of new digital wireless networks
for companies, BSE and BCP.

-April options expire in 2 weeks-

BUY CALL APR-80 CQV-DP OI=225 at $6.75 SL=5.00
BUY CALL APR-85*CQV-DQ OI=727 at $3.50 SL=1.75
BUY CALL APR-90 CQV-DR OI=296 at $1.31 SL=0.75
BUY CALL MAY-90 CQV-ER OI=104 at $5.50 SL=3.75

Picked on March 18th at $86.00   PE = 36
Change since picked      +0.00   52 week low =$29.37
Analysts Ratings     9-2-0-0-0   52 week high=$87.56
Last earnings  1/99 est= .63   actual= .66 surprise= 4.76%
Next earnings  6-15 est= .66   versus= .51
Average daily volume = 741.2 K
Chart = http://quote.com/q?s=cmvt&d=3m

*****

QCOM -  QUALCOMM Inc. $137.00 (+25.44)(+27.00)(+7.31)(P2W+4.24)

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.

We are beginning to run out of adjectives that can adequately 
describe QCOM's explosive run as of late.  Since we added it 
back on March 9th, the company has flown over +$57.25.  The 
news behind the huge move centered around QCOM's agreements 
with Ericcson.  Now add to that the excitement over recent 
developments in China and you have an unstoppable stock.  
"China will adopt the CDMA mobile telephone standard 
nationwide." (-Reuters)  What does this mean to QCOM?  It means 
there is a strong possibility that China will buy 500 million 
dollars worth of equipment from QCOM once a pact and timetable 
are formulated.  QCOM is also working on a dual-role chip with 
MSFT that could be used in devices that can serve as both a 
mobile phone and a hand-held computer for a lower price by the 
end of 2000 or early 2001.  Although we see QCOM continuing to 
soar, there is always the possibility of profit taking.  Make 
sure to use your trailing stop losses.  No stock will ever 
travel in a straight line.  QCOM has jumped for seven days in 
a row.  Watch for a pullback before initiating any new positions.  

News:  On Thursday, QCOM set yet another all time high at $138.38 
in intraday trading.  Keep in mind that QCOM is one of our split 
candidates.  It split back in 1994 at the $60 level and has 
plenty of authorized shares for another 2:1 split.  
 
! wait for a pullback...it may be intraday.
-April options expire in 2 weeks-

BUY CALL APR-135*QAQ-DU OI=45 at $ 9.38 SL= 7.25
BUY CALL APR-140 QAQ-DV OI=68 at $ 7.25 SL= 5.75
BUY CALL MAY-140 QAQ-EV OI=45 at $12.75 SL=10.50 
 
Picked on March 9th at $79.75      PE = 72
Change since picked   +$57.25      52 week low =$ 37.75
Analysts Ratings    5-5-6-0-0      52 week high=$138.38
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 = 2.16 mln
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m

*****

WCOM - MCI WorldCom, Inc. $89.25 (-0.63)(-1.62)(+5.56)(+3.13)

MCI WorldCom is the #2 telecommunications provider.  AT&T 
holds the top spot for now.  WCOM was formed in 1998 when 
WorldCom acquired MCI Communications.  The company now provides
telecommunication services to business, government, and 
consumer customers by using fiber optics, digital microwave 
technology, and satellite stations.  WCOM is also part owner 
of American Sky Broadcasting and offers Internet access 
through an alliance with AOL.

WCOM seems to be caught in a trading pattern the last two 
weeks.  It appears to run up to its resistance level of $94 
then consolidate back down to its support at the $85 level.  
If the markets hold, WCOM could continue adding to its gains 
of +0.69 initiated on Thursday.  However, in light of the war 
in Kosovo and the effects that the employment report could 
have on the markets, it might be wise to wait for the next 
pullback for an entry point.  

News:  On Wednesday, the US Department of Agriculture awarded 
WCOM with a multi-year contract potentially worth more than 
$150 million.  WCOM will provide the USDA voice, data, and 
Internet services.  However, WCOM could also be headed for 
court.  Cable and Wireless is suing WCOM for allegedly 
violating terms of an agreement to sell its Internet business 
and provide C&W with promised customers as well as some new 
employees.   

-April options expire in 2 weeks-
 
BUY CALL APR-85 LDQ-DQ OI=6521 at $5.75 SL=4.25
BUY CALL APR-90*LDQ-DR OI=7782 at $2.69 SL=1.25
BUY CALL MAY-85 LDQ-EQ OI= 700 at $8.25 SL=6.50
BUY CALL MAY-90 LDQ-ER OI=1584 at $5.38 SL=3.75 

Picked on March 18th at $93.75      PE = N/A
Change since picked    -$ 4.50      52 week low =$39.00
Analysts Ratings    22-8-3-0-0      52 week high=$94.25
Last earnings 02/99 est 0.10   actual 0.23 surprise=+130% 
Next earnings 04-29 est 0.34   versus 0.10
Average Daily Volume = 12.0 mln
Chart = http://quote.yahoo.com/q?s=WCOM&d=3m

*****

TLAB - Tellabs Inc. $98.56 (+1.38)(+5.06)(+1.44)(+1.69)

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.  (from Hoovers)

TLAB's had a positive week, though it was actually very
quiet.  The stock has had a problem breaking through the
$100 level.  The stock has formed an ascending triangle,
which usually precedes a large move.  We really like this
stock going into its shareholder meeting on April 22nd. 
Earnings should also be announced around this time.  We
do anticipate a nice earnings run.  

For those of you that like TLAB's for the long term, the
PCX exchange just announced they will offer year 2000 and
2001 Leaps on the stock.  These will be available on April
7th. 

-April options expire in 2 weeks-

BUY CALL APR- 95 TEQ-DS OI=1278 at $ 6.50 SL=4.25
BUY CALL APR-100*TEQ-DT OI=1252 at $ 4.13 SL=2.25
BUY CALL MAY-100 TEQ-ET OI= 398 at $ 7.63 SL=5.25
BUY CALL JUN-100 TEQ-FT OI=6031 at $ 9.63 SL=7.00

Picked on Mar.13th at   $90.69   PE = 38
Change since picked      +7.87   52-week low =$ 31.38
Analysts Ratings   13-15-2-0-0   52-week high=$101.13
Last Earnings   01/99  est .59   actual .62
Next Earnings   04-26  est .49   versus .37
Average daily volume = 2.79 mln
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m


*********
Software 
*********

MSFT - Microsoft $92.69 (+3.63)(+3.47)(+5.50)(P6W -10.00)

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. 

First, note that all prices and changes listed above and 
below reflect the 2:1 split effective Friday, March 26 
after the close.  For our play, MSFT announces earnings on 
April 22.  In the noise of the trial, they are setting up 
for an earnings run.  If history is any indicator, MSFT 
will have managed the Street expectations to under-reflect 
actual results.  The technical chart is positive on MACD, 
momentum and stochastic, telling us the forward march isn't 
likely to let up, barring surprise trial news.  So far 
we've been lucky enough to dodge the post split blues, but 
keep your stops set and of course, confirm market direction 
before starting a new play.

Now, let the villagers rejoice!  The trial resumption has 
been postponed until May 10 while MSFT tries to work a 
settlement with the DOJ, though most experts privately 
admit there isn't much of chance of that anytime soon.  In 
the meantime, Bill Gates and Steve Ballmer, MSFT's 
President, have been talking up the plan of splitting MSFT 
into 5 divisions, effectively beating DOJ to the punch.  
The biggest hang-up is finding someone to head the MSN 
division.  When that happens we'll get firm plans.  The net 
effect is MSFT has more time to reach a settlement.  
Investors will reward the news when the uncertainty is 
lifted.

-April options expire in 2 weeks-

BUY CALL APR-90*MSQ-DR OI=21541 at $4.25 SL=2.50
BUY CALL APR-95 MSQ-DS OI=30570 at $1.63 SL=0.75
BUY CALL MAY-90 MSQ-ER OI= 6016 at $7.50 SL=5.75
BUY CALL MAY-95 MSQ-ES OI= 2930 at $5.00 SL=3.25

MSFT now becomes an Earnings run play
Average daily volume = 34.8 mln. (skewed by split)

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


***********
PC Hardware
***********

EMC - EMC Corporation $128.63 (+5.75)(+4.63)(P5W +15.88)

EMC is a Fortune 500 company that designs, manufactures, 
markets and 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.  They have 35% market 
share in the storage business.

Veteran readers are probably tired of reading this, 
however, EMC is the leader in data storage.  It is a 
requirement in the digital age for most companies to 
archive the growing mountains of data transmitted via 
corporate intranets and the Internet.  While not completely 
recession proof, demand for data storage does not slow down 
with the rest of the economy.  In fact it grows no matter 
what, and accelerates as data transmission becomes more 
ubiquitous and cheaper by the month.  Turning to the 
technical chart, we see strong positive indicators in MACD, 
momentum and stochastics, though lighter volume is giving 
the signal that EMC may need a breather before climbing 
again.  Use trailing stops to thwart Mr. Market and the 
profit thieves since there is lots of gain available for 
their consumption.  Of course, confirm market direction 
before playing. (don't forget, EMC has a split May 28th)

News was scarce last week however, previous news is 
important and bares repeating.  To wit, Lehman Bros. began 
coverage the previous week with an outperform rating 
citing, "The company has become a category leader and 
continues to demonstrate an ability to deliver outstanding 
results and we believe the shares represent an attractive 
long-term value."  They are looking for revenue of $10 bln. 
by 2001, 1999 EPS of $2.00 and 2000 EPS of $2.60.  Also of 
note, EMC agreed to buy $3 bln. of disk drive technology 
from IBM over the next 5 years.  They also get access to 
IBM's treasure trove of other storage technology.

-April options expire in 2 weeks-

BUY CALL APR-125 EMB-DE OI=1452 at $ 7.88 SL= 6.00
BUY CALL APR-130*EMB-DF OI=2357 at $ 4.88 SL= 3.00
BUY CALL MAY-130 EMB-EF OI=2317 at $10.00 SL= 7.50
BUY CALL MAY-135 EMB-EG OI=1274 at $ 7.75 SL= 5.00
BUY CALL JUL-135 EMB GG OI= 355 at $12.63 SL=10.00

Picked on Feb 14th at $118.25    PE = 86
Change since picked    +10.38    52 week low =$ 35.81
Analysts Ratings   10-5-0-0-0    52 week high=$134.94
Last earnings   12-98 est .46    actual .48
Next earnings   04-20 est .39    versus .28
Average Daily Volume = 4.2 mln.
Chart = http://quote.yahoo.com/q?s=EMC&d=3m

*****

SUNW - Sun Microsystems, Inc. $126.19 (+9.69)(+6.12)

With world headquarters in Palo Alto, California, Sun 
Microsystems, Inc. has been described as "the last standing, 
fully integrated computing company adding its own value at 
the chip, OS and systems level." (John Doerr, Kleiner Perkins, 
quoted in Fortune, October 13, 1997).  In an industry 
characterized by red ink and fierce competition, Sun has 
averaged double digit growth over the last several years and 
has one of the strongest balance sheets in the industry, with 
nearly $1 billion cash in the bank. Sun is the leading provider 
of network computing systems including workstations, servers, 
and thin clients. 

SUNW had a great run this last week and is trading just
below its 52-week high.  We foresee a continued split and
earnings run.  The split is April 8th and earnings are in
a couple of weeks.  With the highs SUNW has achieved, the
only resistance is $129, its 52-week high.  This stock has
a lot of momentum and intra-day pullbacks are buyable.

SUNW also benefited this week from its conference with
AOL about their strategic alliance.  Many analysts feel
that this alliance will be great for both companies.  
Lehman reiterated its strong buy rating with a price target
of $135.

-April options expire in 2 weeks-

BUY CALL APR-125 SUQ-DE OI=3849 at $ 6.50 SL=4.75
BUY CALL APR-130*SUQ-DF OI=4402 at $ 4.13 SL=2.50
BUY CALL MAY-125 SUQ-EE OI= 932 at $11.63 SL=9.25
BUY CALL MAY-130 SUQ-EF OI= 695 at $ 9.00 SL=6.75
BUY CALL JUL-135 SUQ-GV OI=1579 at $11.88 SL=9.25

Picked on Mar.30th at $116.50   PE = 44
Change since picked     +9.69   52 week low =$ 38.19
Analysts Ratings   11-8-4-0-0   52 week high=$129.00
Last Earnings  01/99  est .66   actual .67 
Next Earnings  04-21  est .70   versus .59
Average daily volume = 8.13 mln.
Chart = http://quote.yahoo.com/q?s=SUNW&d=3m




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

PLAYS CONTINUED IN SECTION FOUR.

*****************************
SEE DISCLAIMER IN SECTION ONE
*****************************

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

*************
Drug-Biotech
*************

VISX - VISX, Inc $113.50 (+18.25)

VISX can help you see the world more clearly.  The company
makes a laser-vision correction system (LVC) designed to 
recontour the surface of the cornea.  Opthamologists using 
the VISX system - an excimer laser and computerized 
workstation - can correct nearsightedness and astigmatisms 
in typically about 30 minutes.  More complex pathological 
vision disorders can also be corrected.  VISX markets their 
product through 20 distributors and has the system installed 
in 45 countries.  The VISX system is the only excimer laser 
currently approved by the FDA.

This company has caught the eye of many investors.  VISX made 
its grand debut as "sexy stock" at the beginning of March.  
Dain Rauscher initiated coverage as a "strong buy" on the 2nd 
and BancBoston Robertson Stephens also gave it some press the 
same day.  They raised its rating on VISX to a "buy" from 
"long-term attractive", positively adjusted fiscal estimates, 
and had set a target price of $81 - long since surpassed!  
VISX took off again this week!!  Just since Friday it's tacked 
on $18.25. And on Thursday, it hit $115.75 during intraday 
trading to set a new 52 week high. So there's no overhead 
resistance holding back this stock anymore and VISX has its 
10 dma beat by almost 10 points. Now, be warned, profit-takers 
could rear their ugly heads next week so confirm direction and 
keep those stops in place.

There's lots of expectations for great earnings from VISX.
An air of confidence seems to be blowing around that they 
will be well ahead of the Street's calculations and should 
report between .51 and .55 EPS.  Earnings are expected out 
April 14th. In March alone, the composite stock price has 
increased by 59% and analysts can't say enough about the 
performance of the LVC sector. BancBoston Robertson Stephens 
continued to rave about VISX this week and not only reiterated 
its "buy" rating for the stock, but also raised its fiscal 
estimates again - less than a month after the last increase!  
For 1999 a raise to 2.25 from 2.10 p/s and for the year 2000 
it was increased to 3.00 from 2.70 p/s.  Strong fundamentals 
and a powerful earnings run should keep VISX on top. 

-April options expire in 2 weeks-

BUY CALL APR-110*VSQ-DB OI=200 at $ 8.25 SL=6.50
BUY CALL MAY-110 VSQ-EB OI=  1 at $13.13 SL=10.50
BUY CALL JUN-110 VSQ-FB OI=165 at $15.63 SL=12.25
(highest strikes available)

Picked on March 18th at $113.50   PE = 0
Change since picked       +0.00   52 week low =$12.25
Analysts Ratings      3-2-1-0-0   52 week high=$115.75
Last earnings on 12/98 est= .35   actual= .36   surprise= 2.86%
Next earnings on 4-14  est= .53   versus= .23
Average daily volume = 677.7K
Chart = http://quote.com/q?s=VISX&d=3m


*************
Miscellaneous  
*************

OMC - Omnicom Group Inc. $76.38 (-1.12)(+3.57)(+4.32)

Omnicom Group Inc. is the place to go for your advertising 
needs.  The company operates advertising agencies that plan, 
create, and produce advertising in various media.  To further 
assist customers, the company also supplies marketing 
consultation, market research, sales promotion, and public 
relations assistance. It is affiliated with BBDO Worldwide, 
DDB Needham, GGT Group, TBWA International Network, and 
Diversified Agency Services(DAS).  OMC receives approximately 
one third of its annual revenues from DAS.

Finally!  The pullback we had been waiting for.  On Thursday, 
OMC lost -$3.56 and provided us with an entry point.  Looks 
like some simple profit taking before the long holiday weekend. 
However, before diving in, make sure the pullback is over.  
There are still a lot of factors which can affect the market's 
performance in early trading next week.  It remains to be seen 
how investors will react to the employment reports and the 
circumstances in Kosovo.  

No new news.

-April options expire in 2 weeks-

BUY CALL APR-75*OMC-DO OI=192 at $3.38 SL=1.75
BUY CALL APR-80 OMC-DP OI=224 at $1.38 SL=0.00
BUY CALL JUL-75 OMC-GO OI= 53 at $6.38 SL=4.75 
 
Picked on March 21st at $73.94    PE = 47
Change since picked    +$ 2.44    52 week low =$37.00
Analysts Ratings     3-3-0-0-0    52 week high=$80.94
Last earnings   02/99 est 0.45    actual 0.55 surprise=+22% 
Next earnings   04-23 est 0.36    versus 0.31
Average Daily Volume = 623.7 K
Chart = http://quote.yahoo.com/q?s=OMC&d=3m

*****

WHR - Whirlpool Corp. $53.06 (+0.00)(+4.07)(+2.63)

Whirlpool is an appliance manufacturer and marketer of 
commercial and home appliances with facilities in North, 
South and Central America, Asia, Africa, the Middle East, 
and Europe. 

WHR suffered from long overdue profit taking on Thursday.  It 
looked like a typical pullback ahead of the long holiday 
weekend.  But, it could prove to be a convenient entry point.  
Look for the market's direction on Monday and make sure WHR 
heads back up before opening any new positions.  It remains 
to be seen how the markets will react to the employment 
reports and to any further developments in Kosovo.  It is 
better to be safe and wait for the correct signals than to 
jump in too soon and be sorry.  

No new news.

-April options expire in 2 weeks-

BUY CALL APR-50 WHR-DJ OI=238 at $3.88 SL=2.50
BUY CALL APR-55*WHR-DK OI=337 at $1.00 SL=0.00
BUY CALL MAY-50 WHR-EJ OI=176 at $5.00 SL=3.25
BUY CALL MAY-55 WHR-EK OI=223 at $2.38 SL=1.25 

Picked on March 25th at $51.38      PE = 13
Change since picked    +$ 1.68      52 week low =$40.94
Analysts Ratings     2-2-4-0-0      52 week high=$75.25
Last earnings 01/99 est 0.85   actual 1.09 surprise=+28% 
Next earnings 04-15 est 0.79   versus 0.90
Average Daily Volume = 400.3 K
Chart = http://quote.yahoo.com/q?s=WHR&d=3m

*****

AEOS - American Eagle Outfitters, Inc $73.38 (+4.19)

American Eagle Outfitters is a casual apparel retailer for 
men and women.  All of its products bear its private-label 
brand name.  The company operates 350 mall stores in 39 
states primarily east of the Rockies.

AEOS is primed for a split run.  On Monday, the company 
announced a 2:1 stock split set for May 3rd. Just this 
week it has gained over 4 points pushing it above its 
resistance of $68-70.  Its technicals are positive indicating 
it could scale upwards.  But before beginning a new play, 
AEOS needs to move through its resistance at $74-75.  
Confirm the bounce and always use stops to protect profits.

Earlier in March, on the 3rd, MSDW initiated coverage on 
the stock to an "outperform" and the following day AEOS 
posted great 4Q earnings at 1.03 versus .68 p/s. And in 
reference to a one year price gain, the company is up an 
amazing 277%. 

-April options expire in 2 weeks-

BUY CALL APR-70 AQU-DN OI=1029 at $ 5.38 SL= 3.75
BUY CALL APR-75 AQU-DO OI= 331 at $ 2.50 SL= 1.25
BUY CALL MAY-70 AQU-EN OI=1238 at $ 8.38 SL= 6.50
BUY CALL MAY-75*AQU-EO OI=1193 at $ 5.88 SL= 4.25
BUY CALL AUG-70 AQU-HN OI=1111 at $13.63 SL=11.00 

Picked on March 18th at $73.38   PE = 31
Change since picked      +0.00   52 week low =$27.37
Analysts Ratings     4-4-0-0-0   52 week high=$76.18
Last earnings  1/99 est= .95   actual= 1.03 surprise= 8.42%
Next earnings  5-31 est= .32   versus=  .24
Average daily volume = 352.3K
Chart = http://quote.com/q?s=aeos&d=3m

*****

WMT - Wal-Mart $93.25 (+1.69)(-3.19)(-1.63)(+3.13)(P5W+9.25)

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 are playing WMT for its slow but steady momentum based on 
strong fundamentals, and for its coming split run. On 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. This stock does not move the 
way the Internets do, but it not as risky, either.

WMT is in the top 10 on Forbes "Super 100" list of the 100 
most powerful companies in America. The list takes into account 
sales, profits, assets, and market value. We are entering the 
2 week period prior to splitting, when a run-up in price 
normally occurs. Resistance is at the high it set on 3-18 of 
$98.38. WMT splits on April 19th. 
 
-April options expire in 2 weeks-

BUY CALL APR- 90 WMT-DR OI=3843 at $4.75 SL=3.00  
BUY CALL APR- 95*WMT-DS OI=6559 at $2.13 SL=1.00  
BUY CALL MAY- 95 WMT-ES OI=1192 at $5.00 SL=3.25
BUY CALL JUN- 95 WMT-FS OI=2830 at $6.50 SL=4.75
BUY CALL JUN-100 WMY-FT OI=3255 at $4.38 SL=2.75

Picked on Jan 26th at $83.56       PE = 48  
Change since picked  +$ 9.69       52 week low =$48.19
Analysts' ratings 7-10-4-0-0       52 week high=$98.38
Last earnings 12/98 est 0.66   actual 0.70  
Next earnings 05-12 est 0.43   versus 0.37
Average daily volume = 3.34 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m


*****

GE - General Electric $107.81 (+3.82)(-4.19)(P3W+11.69)

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.

Beginning in January, GE tried 3 times to break through 
resistance at $105.00, its previous high. Each time it hit 
that magic number, it pulled back, forming a triple top. On 
March 9th, 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 was a very bullish sign for the stock, and 
investors moved in to send the price higher.

For the second year in a row, GE is at the top of Forbes Super 
100 list of the most powerful companies in America. Forbes 
looked at sales, assets, profits, and market value in ranking 
the companies. On Wednesday, GE reached a new high of $114.19, 
which is now its only resistance. Look for GE to power higher.

-April options expire in 2 weeks-

BUY CALL APR-105 GE-DA OI=3186 at $7.75 SL=5.75
BUY CALL APR-110*GE-DB OI=6734 at $3.63 SL=2.00  
BUY CALL APR-115 GE-DC OI=4679 at $1.38 SL= .50  
BUY CALL MAY-110 GE-EB OI=2267 at $6.50 SL=4.75 
BUY CALL JUN-115 GE-FC OI=1256 at $5.38 SL=3.50

Picked on Mar 9th at $106.00       PE = 40
Change since picked +$  5.63       52 week low =$ 69.00
Analysts' ratings  8-8-2-0-0       52 week high=$113.81
Last earnings 12/98 est 0.80   actual 0.80 surprise=+0%
Next earnings 04-08 est 0.65   versus 0.57 
Average daily volume = 4.71 mln
Chart = http://quote.yahoo.com/q?s=GE=3m

*****

BBBY - Bed Bath and Beyond $37.63 (+4.19)

Bed Bath and Beyond, Inc. is the largest retailer of home 
furnishings, with $1.3 billion in annual sales. It operates 
189 superstores in 35 states selling mainly high quality 
domestic merchandise and home furnishings that are also sold 
in upscale department stores. It continues to steal market 
share from those same department stores. 

BBBY was stuck in a sideways consolidation period for a few 
months, but it broke out to new highs on strong volume after 
announcing record earnings on 3-30. Income for the 4th quarter 
was $34.2 mln ($.24/share) versus $28.4 mln ($.17/share), $.02 
above estimates.  Total sales jumped 37% to $419.2 mln, while 
same store sales climbed 10.8% over the previous year. Fiscal 
earnings have increased 7 years in a row (1998 earnings were 
$97.3 mln versus $73.1 in 1997). Interest rates remain low, 
the housing market is booming, and consumer spending in the 
U.S. is very strong. Baby-boomers are spending more time at 
home, so they are spending more money on their homes and what 
goes in them. Analysts expect a 26% growth rate for BBBY for 
the next 5 years. It enjoys high profit margins due to its 
189 store buying leverage and because suppliers ship directly 
to stores. 

On 3-24, Lehman Brothers upgraded BBY from "outperform" to 
"buy". On 4-1, Prudential upped the stock from "hold" to 
"accumulate". And BancBoston Robertson Stephens analyst Lauren 
Cooks Levitan, with a "buy" rating on the stock, believes BBBY 
has "dramatic" expansion potential, reliable profitability, and 
a strong balance sheet. Having just opened 3 stores since the 
year began, BBBY has plans to open 47 more superstores in Fiscal
Year 1999. BBBY's move is a powerful breakout, but watch out 
for profit taking. BBBY sports a high PE and is up around 
12% in the last 3 days of trading. Use stops or buy on dips.

-April options expire in 2 weeks-

BUY CALL APR-35*BHQ-DG OI=4217 at $3.00 SL=1.50  
BUY CALL MAY-35 BHQ-EG OI= 273 at $4.25 SL=2.50
BUY CALL MAY-40 BHQ-EH OI=   0 at $1.81 SL=1.00 (new)

Picked on Apr 4th at  $37.63      PE = 53
Change since picked +$  0.00      52 week low =$17.13 
Analysts' ratings  9-7-4-0-0      52 week high=$35.38
Last earnings 02/99 est 0.22  actual 0.24 
Next earnings 06-25 est 0.11  versus 0.09
Average daily volume = 1.18 mln
Chart = http://quote.yahoo.com/q?s=BBBY=3m

*****

YUM - Tricon Global $73.56 (+5.62)

The Tricom corporation is made up of four operating divisions 
organized around its three core concepts: Taco Bell, Pizza 
Hut, and KFC. YUM operates, develops, franchises, and licenses 
restaurant units. There are 29,000 YUM units worldwide.

YUM is has been climbing in price with occasional pullbacks 
for some time. On 3-30,Lehman Brothers analyst Mitchell 
Speiser raised his year-end price target to $82.00 from $72.00. 
Two days later, on 4-1, YUM closed above its resistance at 
$70.75, the high it had set on 3-19. It was up a big $3.25 on 
nearly double its average volume, even as trading in other 
issues was light. Speiser sees a good business model, exciting 
brand development, and solid fundamentals. He expects 30% 
growth this year. Last year, increasing the re-franchising of 
units (thus reducing company ownership) helped YUM reduce debt. 
It sold non-core businesses and turned the company around. In 
its first full year as an independent company, although revenues 
fell, margins increased and profits jumped. Each of its 3 
divisions posted same-store sales growth for the full year for 
the first time in a decade.

Momentum is building. Earnings are roughly 3 weeks away and
this stock is taking off! 

-April options expire in 2 weeks-

BUY CALL YUM-DN APR-70 OI=360 at $4.50 SL=2.75  
BUY CALL YUM-DO*APR-75 OI=109 at $1.69 SL= .75  
BUY CALL YUM-EO MAY-75 OI= 46 at $3.50 SL=1.75
BUY CALL YUM-GO JUL-75 OI= 48 at $5.63 SL=4.00

Picked on Apr 4th at  $73.56      PE = 26
Change since picked +$  0.00      52 week low =$29.56 
Analysts' ratings  4-2-6-0-0      52 week high=$72.63
Last earnings 12/98 est 0.66  actual 0.99 surprise=50%
Next earnings 04-27 est 0.47  versus 0.35
Average daily volume = 611.5 k
Chart = http://quote.yahoo.com/q?s=YUM=3m

******

ALD - AlliedSignal, Inc $50.25 (-0.13)(+4.44)

AlliedSignal, a global conglomerate, is an advanced 
technology and manufacturing company with operations in 40 
countries.  It serves customers in a wide variety of 
business segments.  ALD provides aerospace technology like 
weather-radar systems and automotive products such as Fram 
filters and Prestone anti-freeze. They also develop and 
manufacture chemicals, fibers, plastics, and advanced 
materials.  For example, our law enforcement benefit from 
Spectra, a polymer used in body armor.

During this short trading week, ALD didn't make any 
spectacular moves in either direction.  The stock found 
comfortable support at $49 and all week has flirted with 
its new resistance at $50.94 - the new high set on Monday.  
The narrow range was exemplified on Wednesday and Thursday.  
First it gave up $1, then the following day it took back 
$1.06 to close near its daily high on moderate volume.  
Watch for ALD to move through this resistance before 
initiating a new play.

No news on AlliedSignal this week.  But in the industry, 
AMP announced shareholder approval of a merger with Tyco. 

-April options expire in 2 weeks-

BUY CALL APR-45.00 ALD-DI OI= 453 at $5.63 SL=3.75
BUY CALL APR-47.50 ALD-DW OI= 320 at $3.38 SL=1.75
BUY CALL APR-50.00*ALD-DJ OI= 130 at $1.69 SL=1.00
BUY CALL MAY-50.00 ALD-EJ OI= 215 at $3.13 SL=1.50
BUY CALL JUN-50.00 ALD-FJ OI=1087 at $3.63 SL=2.00

Picked on March 28th at    $50.38   PE = 20
Change since picked         -0.13   52 week low =$32.62
Analysts Ratings        8-4-1-0-0   52 week high=$50.94
Last earnings on 12/98  est= 0.62   actual= 0.62
Next earnings on 04-22  est= 0.59   versus= 0.52
Average daily volume = 1.45 mln
Chart = http://quote.com/q?s=ALD&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 
****************

EBAY - eBAY Inc. $138.63 (-15.87)(-5.25)

If you like auctions, you'll like eBAY!  eBAY is the world's 
largest personal online trading community.  eBay created a new 
market: efficient one-to-one trading in an auction format on 
the Web.  Individuals- not big businesses- use eBay to buy and 
sell items in more than 1,000 categories.

eBAY may have posted its meager +1.31 gain at the close of 
trading on Thursday in sympathy to investor excitement over 
the YHOO/BCST deal.  We feel this is a temporary gain and expect 
eBAY to resume its plunge on Monday.  We still feel that AMZN 
and its new auction capabilities will be a formidable competitor 
to eBAY.  Look for eBAY's descent to continue especially if 
investors decide to bail based on the employment reports or 
further developments Kosovo.  

No new news.  

-April options expire in 2 weeks-

BUY PUT APR-140*QXB-PH OI=1194 at $12.00 SL=9.50
BUY PUT APR-135 QXB-PG OI= 567 at $ 9.38 SL=7.25
BUY PUT APR-130 QXB-PF OI=1226 at $ 7.50 SL=5.75
 
Average Daily Volume = 4.14 mln  

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

*****

LHSG - LHS Group $29.75 (-6.13)(-1.83)(+0.50)(P6W -9.75)

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.

LHSG dug out quite a crater last week, as it was hit 
particularly hard on Monday afternoon before the close for 
an approximate $4 loss.  This company makes it a point not 
to release any bad news and we can find no explanation on 3 
different news sources.  After watching LHSG for a couple 
of weeks now, we can discern that lack of any news for LHSG 
means bad news.  The last 2 days have traded flat on larger 
than average volume meaning the selling is not over, but 
buyers appear prepared to take it off their hands at fire 
sale prices.  We may be forming another base.  The best 
plan is to wait for downward movement, or target shoot your 
way in.  Set stops in case we encounter good news.

No news to report

-April options expire in 2 weeks-

BUY PUT APR-35*QLH-PG OI=525 at $5.75 SL=4.00 premium=$0.50
BUY PUT APR-30 QLH-PF OI=299 at $2.00 SL=1.00

Average daily volume = 163 K
Chart = http://quote.yahoo.com/q?s=LHSG&d=3m

*****

EMR - Emerson Electric $51.81 (-2.56)(-2.12)(P4W -1.00)

Emerson Electric Co. designs, engineers, manufactures and 
sells a diverse range electrical, and electronic products 
on contract for others and for its own label on a worldwide 
basis. 

Still a cockroach play.  Where you find one roach, you'll 
find more (thanks Roger).  After trying to keep its head 
above water last Friday and Monday of this week, EMR caved 
in some more.  Its trading pattern seems to be 3 days flat 
then 2 days down substantially.  Here we go again, like a 
staircase to the basement.  Technically, charts don't look 
much worse than this.  EMR has severely negative MACD, 
momentum, stochastic and RSI as the volume has increase.  
The end is not in site.  The best way to make this play is 
to target shoot below $51.  We expect the bugs to come out, 
especially with earnings on May 4.  Confirm market 
direction before playing.

No news, just scientific , eye-glazing product release 
notes. (i.e. "Rosemount Analytical's GCX Process Gas 
Chromatograph chosen "Breakthrough Product of the Year"")

CAUTION: These are thinly traded

-April options expire in 2 weeks-

BUY PUT APR-55*EMR-PK OI=208 at $3.63 SL=2.00
BUY PUT APR-50 EMR-PJ OI= 35 at $0.75 SL=0.00

Average Daily Volume  = 1.1 mln.
Chart = http://quote.yahoo.com/q?s=EMR&d=3m

*****

CMB - Chase Manhattan Corp. $79.38 (-1.12)(-2.00)

The Chase Manhattan Corporation is a bank holding company 
providing diversified financial services.  Chase provides 
domestic and international corporate finance, wholesale 
banking and investment services. Financial services include 
personal and commercial checking accounts, savings and time 
accounts, personal and business loans, brokerage and insurance. 
The corporation serves a wide range of customers including 
commercial, professional and middle market customers. 
(from Stock SmartPro) 

CMB again had a negative week, but will not break its support
at its 50-dma.  We are currently sitting right on this level.
Monday will be a key day.  If CMB breaks below its current
levels on decent volume, this will be our entry point.  Make
sure the price isn't just a blip below.  With worries over
seas and international concerns, there is pressure on these
multinational companies.

BUY PUT APR-85 CMB-PQ OI= 627 at $6.50 SL=4.25 ITM $5.62
BUY PUT APR-80*CMB-PP OI=1930 at $2.94 SL=1.50

Average Daily Volume = 3.98 mln

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

*****

DCLK - DoubleClick Inc. $193.13 (+10.88)(+2.50)

DoubleClick is the global Internet Advertising Solutions 
company.  They specialize in developing the solutions which 
make advertising work on the Internet for Web publishers and 
Web advertisers mainly through its DART Service.   DCLK has 
operations in Asia, Australia, Canada, Europe, Latin America, 
and of course, the US.  Some of their current customers 
include Microsoft, AT&T, and IBM. 

DCLK is now a put play.  We had been recommending it as a call 
before it split on Friday April 2nd.  DCLK came through with a 
+$10.88 finish for the week.  Now it is time to flip the coin 
and make money off of the fact that 7 out of 10 companies suffer 
from post split depression.  Since DCLK made some substantial 
gains in its split run, it is more likely that it will give 
some of it back after the split.  Wait for the confirmation 
then feel free to "put" DCLK in your portfolio.  

News:  On Wednesday, three British companies chose DCLK's DART 
ad serving solution to help their businesses.  Excite Europe 
also renewed a contract with DCLK for another year.  Did you 
know that DCLK served 8 billion ads across close to 6.5 K sites
worldwide in March alone?

BUY PUT APR-195 QWE-PS OI= 41 at $18.13 SL=14.00
BUY PUT APR-190*QWE-PR OI=141 at $15.38 SL=12.00

Average Daily Volume = 2.23 mln
Chart = http://quote.yahoo.com/q?s=DCLK&d=3m

*****

ABS - Albertsons, Inc  $53.06  (-2.12)

Albertsons Inc is a large retail supermarket chain.  Those 
of you in the western U.S. already know this since they 
operate 950 stores throughout the west and mid-west.  Their 
stores typically contain pharmacies, bakeries, in-store 
banking and floral centers.  Albertsons has recently been 
in acquisition mode as it acquired American Stores in 1998, 
which will add several new chains to its existing base. 

ABS has been in a downtrend and is trading below its 50
and 200-dma.  The chart shows little support for the stock
all the way down to its 52-week low in the $45 range.  The
stock has closed near its low of the day the last three
trading days, a very bearish sign.  Earnings in March came
in at estimates, but there are concerns about margins.

BUY PUT APR-55*ABS-PK OI=295 at $2.63 SL=1.25
BUY PUT APR-50 ABS-PJ OI=224 at $0.44 SL=0.00   

Average Daily Volume = 719k

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

*****

LTR - Loews Corp.  $73.00 (-5.94)

Loews Corporation primarily operates in property, casualty 
and life insurance through its 84% owned subsidiary CNA 
Financial Corporation.  The company is also involved in the 
production and sale of cigarettes through Lorillard Inc. 
Other businesses include the operation of oil and gas 
drilling rigs, the operation of hotels and the distribution 
and sale of watches and other timing devices. 
(from Stock SmartPro)

We are adding LTR as a put this week.  The stock has been 
in a terrible downtrend and is sitting near its 52-week low.
The main reason for this drop has been the fact that LTR
deals in cigarettes.  Tobacco stocks have been reeling from
court decisions awarding millions of dollars.  There was 
also rumors that LTR was going to sell off some of its
subsidiaries, but the company said these are unfounded.
We feel there will be continued pressure on tobacco stocks.

BUY PUT JUN-70*LTR-RN OI=515 at $2.38 SL=1.25

Average Daily Volume = 267 K

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

*****

CVS - CVS Corp. $45.31 (-3.32)

CVS Corporation is a leader in the chain drugstore industry 
in the United States. The company currently operates 3,888 
retail stores in 24 states in the Northeast, Mid-Atlantic, 
Midwest and Southeast regions and in the District of Columbia. 
The company's primary business is pharmacy which includes 
prescription drugs and services. The company also offers a 
broad selection of general merchandise which includes 
categories of over-the-counter drugs, greeting cards, film 
and photo finishing services, beauty and cosmetics, seasonal 
merchandise and convenience foods. 

CVS is another stock that has been heading down.  There is
increased competition in the drug store arena with the start
up of some Internet drug stores.  CVS has also struggled 
from the terrible earnings announcement made by RiteAid.  
The stock is just below its 200-dma and could see a bounce
off of $45.  A break through $45 should see the stock fade 
to at least $40.  Make sure of direction before initiating
new puts.

BUY PUT APR-45*CVS-PI OI=114 at $1.38 SL=0.75

Average Daily Volume = 1.37 mln.

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




******************************
SEE DISCLAIMER IN SECTION ONE
******************************


The Option Investor Newsletter            4-4-99
Sunday                5  of  6

***********************************************************
Combos
***********************************************************
A Well Deserved Break...

Wednesday, March 31

U.S. stocks moved lower Wednesday as portfolio managers trimmed
their accounts on the last day of the first quarter, adding top
performing issues and unloading the laggards. The DJIA ended down
127 points at 9786. Technology shares also drifted downward, and
the Nasdaq composite index closed off 18 points at 2461. In the
broader market, declining issues beat advances 16 to 13 on heavy
volume of 920 million shares on the NYSE.

Tuesday's new plays (positions/prices):

TWX  JUN70C/JUN75C    debit  $2.38  (stayed positive all day)
UTX  MAY125C/JUN130C  debit  $3.62  (easy entry at the target)
WMT  MAY90C/JUN95C    debit  $3.12 	(lower near the close)

Portfolio plays:

MSFT split 2 for 1 and our new position on the April put-credit
spread is APR70P/67P. The LSI straddle finally broke-out as the
stock gapped up $4.00. The APR30C traded as high as $2.50. The
BTC position is one to watch as it is failing somewhat. We may
need to take an early exit on the May call option to maintain a
profit. CTXS is no longer a factor but NSOL will keep us honest
right to the end. PBI also pulled back slightly, giving us room
to breathe again.

Thursday, April 1

The market drifted higher Thursday as Friday's key jobs report
and the growing crisis in Yugoslavia made investors cautious on
the way to a long Easter holiday weekend. The Dow finished up 46
points at 9832. The Nasdaq index of technology stocks also moved
higher, climbing 32 points to close at 2493. In the broad market,
advancing issues edged out declines by a small margin on active
volume of 704 million shares on the NYSE.

Portfolio plays:

NSOL is still too close to call as it struggles to hold the $100
level. We recommend you consider closing the debit spread and
taking the small profit rather than risking a $3.88 loss. The
credit spread (APR85P/APR90P) is relatively safe at the moment
but we will monitor that position closely.   Good Luck!
******************************************************************
				- NEW PLAYS -
******************************************************************
NTLI - NTL Inc.  $83.50     *** Solid Technicals ***

NTL Inc. operates a digital fiber-optic network through which it
provides Internet access, TV programming, and local/long-distance,
and international telephone service to one million business and
residential customers in the UK. The firm also offers television
and radio broadcast transmission services and wholesales network
access to telecommunications operators, cable operators, and
Internet service providers (ISPs).

The company's purchase of Comcast UK Cable Partners made NTL one
of the UK's largest cable companies and now they have announced
that effective April 1, it will have completed a restructuring to
create a holding company. All stockholders of NTL will now become
stockholders of the holding company, and NTL will be a subsidiary
of the new holding company. The new company will trade under the
same ticker, NTLI.

They recently announced a 1998 loss of $12.69 a share, wider than
the single-analyst outlook for a loss of $12.57 and the year-ago
loss of $10.60 but investors decided to overlook the shortcoming,
probably because of the overall strength of the company. We like
the solid support near $80 and the positive sector performance.

PLAY (conservative/debit spread):

BUY  CALL APR-75 IQS-DO OI=184 A=$9.75
SELL CALL APR-80 IQS-DP OI=466 B=$5.75
INITIAL NET DEBIT TARGET=$3.75 ROI(max)=33% B/E=$78.75

Chart = http://quote.yahoo.com/q?s=NTLI&d=3m
******************************************************************
XCIT - Excite  $135.93     *** Internet Play ***

Excite is one of the largest World Wide Web search and delivery
services. Its services include shopping, entertainment, chat and
geographic search aids. The company's other web tools include the
WebCrawler and Excite Communities, which provides e-mail and many
other services. About 20 million people use Excite each month and
partners include America Online, which sold WebCrawler to Excite
and and Intuit.

At Home Corporation, a provider of high-speed Internet access via
cable TV, has agreed to acquire Web portal heavyweight Excite. A
great deal of controversy has arisen from this merger but most
experts think it will eventually be completed. ATHM is actually a
fairly small company but they have a big future and any short-term
merger pains should be easily overcome by the natural growth of
this new media giant. One of the Internet analysts at NationsBanc
Montgomery Securities recently initiated "buy" ratings on several
Internet stocks, ATHM and XCIT were among them.

The technicals for both companies are still bullish and the sector
is performing very well. We will use the small disparity in this
ITM spread to play the current Internet 'craze' in a conservative
debit position.

PLAY (conservative/debit spread):

BUY  CALL MAY-110 KQB-EB OI=186 A=$34.38
SELL CALL MAY-125 KQB-EE OI=333 B=$25.25
INITIAL NET DEBIT TARGET=$8.75 ROI(max)=71% B/E=$118.75

Chart = http://quote.yahoo.com/q?s=XCIT&d=3m
******************************************************************
AMAT - Applied Materials  $64.38     *** On The Rebound? ***

Applied Materials is the world's #1 maker of semiconductor wafer
fabrication equipment. The company's machines have a big share in
most industry segments, including deposition, etching, and ion
implantation. Its customers include Advanced Micro Devices, Intel,
Lucent, and Motorola. AMAT also makes metrology systems and wafer
and photomask inspection equipment. The company owns about 50% of
Applied Komatsu Technology, a maker of fabrication systems for
liquid crystal displays.

Worldwide shipments of equipment used to make computer chips fell
21% last year due to the Asian slowdown, an oversupply of smaller
wafers and a delay in making the transition to larger wafers. But,
most of the segments seemed to hit their low point late in the
third quarter and have been steadily improving. The industry ended
1998 on an 'up' note and now appears to be stabilizing and headed
towards recovery with a long period of growth ahead.

Last week, options on AMAT drew interest after positive comments
from several retail brokerage houses following an analyst meeting
on Wednesday. The implied volatility is higher than normal and
a small disparity exists in the May ITM call options.

PLAY (conservative/debit spread):

BUY  CALL MAY-55 ANQ-EK OI=98  A=$12.12
SELL CALL MAY-60 ANQ-EL OI=322 B=$8.25
INITIAL NET DEBIT TARGET=$3.62 ROI(max)=38% B/E=$58.62

Chart = http://quote.yahoo.com/q?s=AMAT&d=3m
******************************************************************
DRIV - Digital River  $44.94     *** Internet Commerce ***

Digital River provides electronic commerce services to software
publishers and online retail clients, including the creation of
Web stores and merchandising services. They also have services
for fraud prevention, export control, and online registration.
Their clients include Corel, Cyberian Outpost, and Lotus.

DRIV is up on speculation they will announce impressive earnings
and some insiders say they have new contracts with AMZN and other
online retailers. Analysts at Bear Stearns recently set a target
at almost double the current price. Technically, this stock has
excellent support near $35 and with any momentum, the new trend
may take it into the low $50-$60 range.

We found this play in the covered-call research. It has a fairly
low return but the risk is very small as well.

PLAY (very conservative/debit spread):

BUY  CALL MAY-30 OI=25 DQI-EF A=$16.62
SELL CALL MAY-35 OI=41 DQI-EG B=$12.25
INITIAL NET DEBIT TARGET=$4.00 ROI(max)=25% B/E=$34.00

Chart = http://quote.yahoo.com/q?s=DRIV&d=3m
******************************************************************
LU - Lucent Technologies  $111.75     *** Split Play ***

Lucent is the leading US manufacturer of telecom equipment and
software, including business communications systems, switching
and transmission equipment, and wireless networks. Lucent also
makes integrated circuits, digital signal processors, and power
systems and is a major supplier to the personal communications
services market. Technology developed by Bell Labs provides the
basis for Lucent's products. Most of LU's customers are telecom
network operators and AT&T accounts for almost 15% of sales.

Lucent options were active on Thursday as investors bought up the
calls before the stock splits 2 for 1 on Monday. The April calls
were among the most actively traded but they are probably better
as a 'sale' than a 'buy'. We are going to use the sell-the-split
strategy and a small disparity in the OTM positions to make this
play favorable. These are pre-split options so you will need to
find the new series on Monday and look for the appropriate ratio
of credit premium in the spread.

PLAY (conservative/credit spread):

PRE-SPLIT OPTIONS

BUY  CALL APR-125 LU-DE OI=5737  A=$0.81
SELL CALL APR-120 LU-DD OI=13279 B=$1.38
INITIAL NET CREDIT TARGET=$0.62 ROI=17%

Chart = http://quote.yahoo.com/q?s=LU&d=3m
******************************************************************
SUNW - Sun Microsystems  $126.87     *** Split Play ***

Sun Microsystems is a leading maker of UNIX-based, workstation
computers, storage devices, and servers for powering corporate
computer networks. The company is the largest to make computers
that use its own chips (SPARC) and operating systems (Solaris).
Sun's most talked-about product is Java, a programming language
intended to create software that can run unchanged on any kind
of computer. The company mainly sells its hardware and software
to the telecommunications, financial, government, manufacturing,
and education markets.

SUNW is expected to report its third-quarter earnings on April 15.
Analysts are expecting revenue growth in the high-teens, and some
are hoping for 20% growth. According to First Call, the consensus
is for earnings of $0.70 a share but most analysts believe that
SUNW will announce higher-than-expected numbers. Another bonus
is that SUNW's shares are expected to split two-for-one on or
about April 8. We expect there will be a small run next week as
these two events occur and the deep OTM put-credit spread offers
a reasonable risk/reward position.

PLAY (conservative/credit spread):

BUY  PUT APR-110 SUQ-PB OI=2510 A=$0.93
SELL PUT APR-115 SUQ-PC OI=1376 B=$1.50
INITIAL NET CREDIT TARGET=$0.62 ROI=17%

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




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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 
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delivery times due to factors beyond our control.


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

*********************
COVERED CALL SECTION
*********************
Option Basics...

Each week, I receive an overwhelming number of basic questions
about stock options. Here are some common facts that you should
understand before you begin trading:

Options expire on the Saturday following the third Friday of
the expiration month, although the third Friday is the last day
of trading. Option trades have a one-day settlement. The trade
settles on the next business day after the trade. When you buy
an option, it must be paid for in full, and the credits from
sales are posted to the account the very next day. All options
are quoted on a per-share basis, regardless of how many shares
of stock the option involves. Normally the quote assumes 100
shares of the underlying stock. When the underlying stock pays
dividend or splits, the terms of its options are adjusted. This
may result in fractional strike prices or options for other than
100 shares per contract. When this occurs, the exchange also
publishes a new quote symbol for each new series. As time passes,
the fractional strikes are eliminated as they expire. Changes
in the price of the underlying stock will generate new strike
prices. A new series is usually opened when the stock trades at
the lowest (or highest) existing strike in any series.

Placing an order:

When you place an option order, you must specify; whether the
order is a "buy" or a "sell", the option to be bought or sold,
whether the trade is an opening or closing position and the
desired price. There are also specific types of orders to help
you buy or sell based on certain conditions or requirements:

"Market" orders are simple orders to buy or sell the option at
the best possible price as soon as the order is received at the
exchange. "Limit" orders are used to buy or sell at a specific
price. It may be executed at a better price than the "limit" but
if the limit is never reached, the order may never be executed.
A "Good-until-canceled" order is a limit, stop, or stop-limit
order that remains valid for up to six months if the conditions
for the order execution do not occur. A "Stop" order becomes
a market order when the security trades at or through the price
specified on the order. "Buy Stop" orders are placed above the
current price, and "Sell Stop" orders are used below the
current price. Such orders are used to either limit loss or
protect a profit. This order is not always valid on all option
exchanges and is usually ineffective on fast moving issues like
Internet stocks. A "Stop-Limit" order becomes a "limit" order
when the specified price is reached. Whereas the "Stop" order
has to be executed as soon as the 'stop price' is reached, the
"Stop-Limit" may or may not be filled, depending on the market.
This type of order is generally used to open a position rather
than to close it. There are many other types of orders that can
be used when trading with a full service broker such as "Market
Not Held" or "Market On Close". Those are some of the benefits
of having a floor agent working on your behalf in the execution
of trades. Next week, we will discuss the various components of
a 'Trading Plan'. Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (2 WEEKS TO THE APRIL EXPIRATION)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit   ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

KLOC   13.75  16.13   Apr  12.50  2.50  *$  1.25  11.1%  16.1%
PROX   30.00  29.00   Apr  30.00  3.88   $  2.88  11.0%  16.0%
MMCN   15.19  16.75   Apr  15.00  1.44  *$  1.25   9.1%  13.2%
ARTT    9.38  11.88   Apr   7.50  2.56  *$  0.68  10.0%  10.8%
COOL   20.63  18.81   Apr  17.50  4.25  *$  1.12   6.8%   9.9%
DAOU    6.06   5.88   Apr   5.00  1.56  *$  0.50  11.1%   9.7%
UBS    11.88  11.56   Apr  12.50  1.25   $  0.93   8.7%   9.5%
MTIC    5.88   5.44   Apr   5.00  1.44  *$  0.56  12.6%   9.1%
PPOD   11.00  11.00   Apr  10.00  1.50  *$  0.50   5.3%   7.6%
MCHM    9.75   9.88   Apr   7.50  2.88  *$  0.63   9.2%   6.6%
AXTI   21.25  22.50   Apr  17.50  4.75  *$  1.00   6.1%   6.6%
CUST   11.75  18.31   Apr  10.00  2.31  *$  0.56   5.9%   6.4%
FORE   18.75  20.56   Apr  15.00  4.38  *$  0.63   4.4%   6.4%
IDTC   17.25  17.88   Apr  15.00  2.88  *$  0.63   4.4%   6.4%
MMCN   14.56  16.75   Apr  12.50  2.75  *$  0.69   5.8%   6.3%
AMMB    9.88   7.75   Apr   7.50  2.88  *$  0.50   7.1%   6.2%
OMKT   14.00  12.56   Apr  12.50  2.00  *$  0.50   4.2%   6.0%
ESPI   10.88  13.44   Apr   7.50  3.75  *$  0.37   5.2%   5.6%
VYTL   25.50  28.13   Apr  22.50  4.00  *$  1.00   4.7%   5.1%
ENZN   16.56  15.13   Apr  15.00  2.38  *$  0.82   5.8%   5.0%
GALT   23.94  29.00   Apr  20.00  5.00  *$  1.06   5.6%   4.9%
FORE   13.13  20.56   Apr  10.00  3.63  *$  0.50   5.3%   4.9%
NWAC   25.69  28.00   Apr  25.00  2.00  *$  1.31   5.5%   4.8%
PWAV   28.94  27.50   Apr  25.00  5.13  *$  1.19   5.0%   4.3%
NDB    26.88  27.44   Apr  22.50  5.00  *$  0.62   2.8%   4.1%
FFD    10.88   8.94   Apr  10.00  2.00   $  0.06   0.7%   0.7%
--------------------------------------------------------------
KLOC   13.75  16.13   May  10.00  4.75  *$  1.00  11.1%   6.0%

-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

BVSI    8.75  Apr  7.50  VQB DU  1.69  15     7.06   6.23%   6.23%
CMTO   25.38  Apr 22.50  CQH DX  3.63  185   21.75   3.45%   3.45%
FORE   20.56  Apr 17.50  FQO DW  3.75  7711  16.81   4.10%   4.10%
NTPA   10.69  Apr  7.50  NQD DU  3.63  55     7.06   6.23%   6.23%
PROX   29.13  Apr 25.00  WQG DE  4.75  117   24.38   2.54%   2.54%
SUGN   22.50  Apr 17.50  UGQ DW  5.50  366   17.00   2.94%   2.94%
------------------------------------------------------------------
EXCA   14.25  May 12.50  XQA EV  2.75  113   11.50   8.70%   8.70%
FIBR   25.13  May 20.00  QFW ED  7.00  1241  18.13  10.31%  10.31%
GSTX   11.06  May 10.00  QGS EB  2.13  47     8.93  11.98%  11.98%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

NTPA   10.69  Apr  7.50  NQD DU  3.63  55     7.06   6.23%   6.23%
BVSI    8.75  Apr  7.50  VQB DU  1.69  15     7.06   6.23%   6.23%
FORE   20.56  Apr 17.50  FQO DW  3.75  7711  16.81   4.10%   4.10%
CMTO   25.38  Apr 22.50  CQH DX  3.63  185   21.75   3.45%   3.45%
SUGN   22.50  Apr 17.50  UGQ DW  5.50  366   17.00   2.94%   2.94%
PROX   29.13  Apr 25.00  WQG DE  4.75  117   24.38   2.54%   2.54%
------------------------------------------------------------------
GSTX   11.06  May 10.00  QGS EB  2.13  47     8.93  11.98%  11.98%
FIBR   25.13  May 20.00  QFW ED  7.00  1241  18.13  10.31%  10.31%
EXCA   14.25  May 12.50  XQA EV  2.75  113   11.50   8.70%   8.70%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

       SAME AS 'RETURN CALLED', ALL PLAYS ARE IN-THE-MONEY
******************************************************************
Company Descriptions
******************************************************************
BVSI - Brite Voice Systems, Inc. $8.75 *** Telecom Sector ***

BVSI designs, integrates, assembles, markets, and supports voice 
processing systems and services which incorporate voice response, 
recognition, facsimile messaging and audiotex applications. BVSI 
also offers telecommunications management services. Brite Voice
has been in a down trend (near term) since posting lower earnings 
but the longer term base pattern (7 months) with strong support
around 7.50 is our focus. The stock has been testing support for
the last two weeks but changed character with Thursday's jump on
increasing volume support. This is a two week play to stay above
$7.50 and it is supported by several short term buy signals.

Apr 7.50 VQB-DU Bid=1.69 OI=15 CB=7.06 RC=6.23% RNC=6.23% 

Chart = http://quote.yahoo.com/q?s=BVSI&d=3m
******************************************************************
CMTO - Com21, Inc.  $25.38  *** Moving Up? ***

Com21, Inc. designs, develops, markets and sells value-added, 
high-speed communications solutions for the broadband access
market. Com21 was in a trading channel from about $21 to $24 for
the last two months until Monday's upgrade by PCM, Inc. Volume
has increased recently and several bullish indicators suggest
that the two week time frame for this play offers a favorable
risk/reward ratio.

Apr 22.50 CQH-DX Bid=3.63 OI=185 CB=21.75 RC=3.45% RNC=3.45% 

Chart = http://quote.yahoo.com/q?s=CMTO&d=3m
******************************************************************
FORE - Fore Systems  $20.56     *** Takeover Target? ***

FORE Systems is the maker of computer networking products based
on high-speed asynchronous transfer mode (ATM) offers switches
and adapter cards, internetworking and management software, and
ATM video products. Another week (still merger speculation), and
another entry point. Our cost basis is higher than last week so
of course the risk rises (less downside protection), but this is
mitigated somewhat by the shorter time to the strike date.

Apr 17.50 FQO-DW Bid=3.75 OI=7711 CB=16.81 RC=4.10% RNC=4.10% 

Chart = http://quote.yahoo.com/q?s=FORE&d=3m
******************************************************************
NTPA - Netopia, Inc. $10.69    *** Internet ***

NTPA develops, markets, and supports products and services which 
enable growing organizations to establish their presence on the 
Internet. It looks like Internet mania has returned (did it ever
leave?). Netopia jumped too quickly and caught some 'shorts' off
guard. Will this be the time that NTPA climbs above its trading
range of the last year? This is good speculation for two weeks...

Apr 7.50 NQD-DU Bid=3.63 OI=55 CB=7.06 RC=6.23% RNC=6.23% 

Chart = http://quote.yahoo.com/q?s=NTPA&d=3m
******************************************************************
PROX - PROX - Proxim  $29.13     *** Earnings Run? ***

Proxim is one of the leading makers of portable, wireless LAN
access components. Wireless LANs transmit and receive data over
the air via radio waves, and Proxim makes the radio-frequency
modules and wireless adapters that are used by manufacturers in
products such as handheld data-collection terminals, notebooks,
and pen-based notepads. Frost & Sullivan recently said that PROX
has the leading share of worldwide wireless LAN unit shipments.
Traders are still speculating on the earnings report, due just
after the April strike date.

Apr 25.00 WQG-DE Bid=4.75 OI=117 CB=24.38 RC=2.54% RNC=2.54% 

Chart = http://quote.yahoo.com/q?s=PROX&d=3m
******************************************************************
SUGN - SUGN - Sugen  $22.50     *** Cancer Breakthrough? ***

SUGEN develops small-molecule drugs that target cellular signal 
transduction pathways; variations in these pathways are present
in cancer, diabetes, and other disorders. SUGEN's drugs signal
molecules that function as enzymatic switches to turn on/off
specific pathways. A team at UCLA announced it was starting
trials of Sugen's drug, called SU5416, on people with advanced
colon cancer. A previous Sugen study will be chronicled on '60
Minutes,' scheduled to air April 4" on CBS. Excellent technical
support exists near $17-$18.

Apr 17.50 UGQ-DW Bid=5.50 OI=366 CB=17.00 RC=2.94% RNC=2.94% 

Chart = http://quote.yahoo.com/q?s=SUGN&d=3m
******************************************************************
                          MAY POSITIONS
******************************************************************
EXCA - Excalibur Technologies  $14.25  *** New Trend? ***

EXCA designs, develops, markets and supports knowledge retrieval 
software products capable of supporting paper, text, image and 
video data. With the two month consolidation past and an increase
in earnings and revenues, Excalibur resumed its uptrend with good
volume support. A bullish looking chart with the new support area
near our cost basis.

May 12.50 XQA-EV Bid=2.75 OI=113 CB=11.50 RC=8.70% RNC=8.70% 

Chart = http://quote.yahoo.com/q?s=EXCA&d=3m
******************************************************************
FIBR - Osicom Technologies, Inc.  $25.13  *** Telecom Sector ***

Osicom Technologies, Inc., through its subsidiaries, designs, 
manufactures and markets integrated networking and bandwidth
aggregation products for enhancing the performance of data and
telecommunications networks. While Osicom Tech has been receiving
new orders, its price has attained a new, two year high. The 
chart is very bullish but somewhat overextended. We prefer the
over-valued premium in the $20 option.

May 20.00 QFW-ED Bid=7.00 OI=1241 CB=18.13 RC=10.31% RNC=10.31% 

Chart = http://quote.yahoo.com/q?s=FIBR&d=3m
******************************************************************
GSTX - GST Telecommunications  $11.06  *** Telecom Sector ***

GSTX provides a broad range of integrated telecommunications 
products and services, primarily to business customers located
in the western continental United States and Hawaii. GST Telecom
is one of the companies that Qwest has an interest in, according
to Bear Stearns analyst James Henry. The Telecom sector has been
showing recent strength and we like the bullish characteristics
of GSTX, though we prefer the conservative ITM approach.

May 10.00 QGS-EB Bid=2.13 OI=47 CB=8.93 RC=11.98% RNC=11.98% 

Chart = http://quote.yahoo.com/q?s=GSTX&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
SUGN     22.44  Apr   22.50  UGQDX   3.25  14.48   448   767
QMDC      7.00  Apr    7.50  QCDDU   0.75  10.71    44    33
TAVA      4.91  Apr    5.00  QTVDA   0.50  10.19     5   468
SKYC      7.44  Apr    7.50  KQFDU   0.75  10.08     7    40
PTEN      5.00  Apr    5.00  NZQDA   0.50  10.00     3   102
PXD       7.50  Apr    7.50  PXDDU   0.75  10.00     3     8
BTIM     17.50  Apr   17.50  QBODW   1.75  10.00   286   963
AGTX      7.50  Apr    7.50  QDXDU   0.75  10.00    50    25
EPTO      4.94  May    5.00  QTPEA   0.94  18.99    10    35
SUGN     22.44  May   22.50  UGQEX   4.25  18.94   248   146
GCTI     14.63  May   15.00  QHFEC   2.50  17.09    20    18
AXNT     20.00  May   20.00  XQEED   3.38  16.88    29    15
DANKY     4.88  May    5.00  DNQEA   0.75  15.38    10  2009
BTIM     17.50  May   17.50  QBOEW   2.69  15.36    14    77
MCHM      9.88  May   10.00   QQEB   1.50  15.19    10   242
QMDC      7.00  May    7.50  QCDEU   1.06  15.18    10    13
AGTX      7.50  May    7.50  QDXEU   1.13  15.00    20    10
ESPI     13.44  May   15.00   AQEC   2.00  14.88   849    85
UAG       8.50  May   10.00  UAGEB   1.25  14.71    33   244
LBFC      9.81  May   10.00  QBBEB   1.44  14.65   131   135
NSIT     23.25  May   25.00  QNTEE   3.38  14.52    38    78
KMAG      4.31  May    5.00  KMQEA   0.63  14.49    30    51
HS        3.50  May    5.00   HSEA   0.50  14.29   236  1154
FGCI      7.44  May    7.50  JZQEU   1.06  14.29   170   594
ANIC      9.25  May   10.00  NIQEB   1.31  14.19    66    60
EXCA     14.13  May   15.00  XQAEC   2.00  14.16    70    66
STRX      9.75  May   10.00  TQQEB   1.38  14.10    30   462
TAVA      4.91  May    5.00  QTVEA   0.69  14.01    57   422
DRTE     21.63  May   22.50  DEQEX   3.00  13.87    10    17
KEA      19.44  May   20.00  KEAED   2.69  13.83    48    32
CYMI     20.00  May   20.00  CQGED   2.75  13.75    11    98
PCMS      7.28  May    7.50  PQPEU   1.00  13.73   130  2215
IMG       8.25  May   10.00  IMGEB   1.13  13.64    10   328
TLXN      9.19  May   10.00  TNQEB   1.25  13.61    10   199
GMGC      3.69  May    5.00  GGQEA   0.50  13.56   178  3112
TWMC     12.00  May   12.50  TQTEV   1.63  13.54     5    58
TECD     22.19  May   22.50  TDQEX   3.00  13.52    47    82
PTEK     12.50  May   12.50  TQOEV   1.69  13.50  1038  2163
IFMX      7.44  May    7.50  IFQEU   1.00  13.45   194  1854
MMCN     16.75  May   17.50  CMQEW   2.25  13.43    11    26
HLIT     28.88  May   30.00  LOQEF   3.88  13.42    10    10
BNYN     13.56  May   15.00  QYNEC   1.81  13.36   117   131
CATP     15.00  May   15.00  TQPEC   2.00  13.33   471   415
SUGN     22.44  May   25.00  UGQEE   2.94  13.09    23   124
ZD       24.00  May   25.00   ZDEE   3.13  13.02   262   259
AEIS     25.00  May   25.00  OEQEE   3.25  13.00     2     7
DRMD      9.63  May   10.00  DUQEB   1.25  12.99    10  1389
PAH       4.81  May    5.00  PAHEA   0.63  12.99    70   378
CFN       6.75  May    7.50  CFNEU   0.88  12.96    50    99
AVID     17.38  May   17.50  AQIEW   2.25  12.95     3    27
ICO       7.25  May    7.50  ICOEU   0.94  12.93     5    50
PTVL     19.00  May   20.00  QUTED   2.44  12.83    32   422
IMRS     17.06  May   17.50  QIQEW   2.19  12.82    10   125
CYBX      9.81  May   10.00  QAJEB   1.25  12.74    20    50
ARTT     11.88  May   12.50  AOQEV   1.50  12.63    28   759
NMGC     10.00  May   10.00  GJQEB   1.25  12.50    50    33
TKLC      7.50  May    7.50   KQEU   0.94  12.50    20   133
MDM       5.00  May    5.00  MDMEA   0.63  12.50   145   282
SPCT     12.00  May   12.50  QCSEV   1.50  12.50   500    64
PROX     29.00  May   30.00  WQGEF   3.63  12.50    25    18
ATML     17.13  May   17.50  AQTEW   2.13  12.41   233  2038
PCTY      4.06  May    5.00  TYQEA   0.50  12.31    30    70
Z         7.13  May    7.50    ZEU   0.88  12.28   293  1814
OMPT     14.00  May   15.00  QTTEC   1.69  12.05   111  1651
SPYG      8.88  May   10.00  YQGEB   1.06  11.97     5    23
OFIS      4.19  May    5.00  OFQEA   0.50  11.94     3   374
POSS     10.00  May   10.00  UPQEB   1.19  11.88     2   160
FORE     20.56  May   22.50  FQOEX   2.44  11.85   997   241
DDIM      4.22  May    5.00   QMEA   0.50  11.85    21   122
PDX      26.63  May   30.00  PDXEF   3.13  11.74    25   312
SRCM     17.13  May   17.50   SQEW   2.00  11.68    80   109
MCOM      7.00  May    7.50  MQMEU   0.81  11.61    17   120
CYTC     14.00  May   15.00  YQKEC   1.63  11.61    33   196
PAGE      4.31  May    5.00  PGQEA   0.50  11.59    10   316
ERTH      8.63  May   10.00  QEREB   1.00  11.59    30    55
PPOD     11.00  May   12.50  QPPEV   1.25  11.36     6   134
HDCO     29.88  May   30.00  HQOEF   3.38  11.30     3    99
FHS      11.63  May   12.50  FHSEV   1.31  11.29    40    50
GYMB     10.00  May   10.00  GMQEB   1.13  11.25    69    12
RMDY     15.00  May   15.00  LRQEC   1.69  11.25    30   360
PTEN      5.00  May    5.00  NZQEA   0.56  11.25    20   615
AXNT     20.00  May   22.50  XQEEX   2.25  11.25   116   161
GSB      22.25  May   22.50  GSBEX   2.50  11.24     5    25
SBTK     16.13  May   17.50  XQYEW   1.81  11.24    20   373
AFCI      8.97  May   10.00  AQFEB   1.00  11.15   276   330
AND       6.75  May    7.50  ANDEU   0.75  11.11     5   656
CPU       6.75  May    7.50  CPUEU   0.75  11.11   329  2200
FILE      6.75  May    7.50  ILQEU   0.75  11.11    20     5
ENMD     22.63  May   25.00  QMAEE   2.50  11.05    13   569
PGNS     13.63  May   15.00  PHQEC   1.50  11.01   100   419
SDTI     18.19  May   20.00  QSDED   2.00  11.00     5   198
CYCH     13.69  May   15.00  KBQEC   1.50  10.96    14   118
ZONA     23.44  May   25.00  NQZEE   2.56  10.93     5   346
SYBS      7.44  May    7.50  SBQEU   0.81  10.92    17   268
PWAV     27.50  May   30.00  VFQEF   3.00  10.91     1   190
CRUS      6.94  May    7.50  CUQEU   0.75  10.81    35    33
VLNC      6.94  May    7.50  VHQEU   0.75  10.81    10    68
ORB      29.00  May   30.00  ORBEF   3.13  10.78   384   486
SKYT     15.13  May   17.50  MMQEW   1.63  10.74    85   589
GCTI     14.63  May   17.50  QHFEW   1.56  10.68    10    90
VYTL     28.13  May   30.00  VQLEF   3.00  10.67    15    39
DAOU      5.88  May    7.50  QQXEU   0.63  10.64     2   112
BDT       3.56  May    5.00  BDTEA   0.38  10.53   100    57
GEMS      3.56  May    5.00  GQMEA   0.38  10.53    90   211
TWLB      9.50  May   10.00  QBTEB   1.00  10.53    69   417
IDTC     17.88  May   20.00  IQJED   1.88  10.49    70   419
BEAS     16.75  May   17.50  BRQEW   1.75  10.45   167    87
CENT     16.88  May   17.50  EQHEW   1.75  10.37    14   210
IDX       7.25  May    7.50  IDXEU   0.75  10.34     5    40
BEAM     10.94  May   12.50  BAQEV   1.13  10.29   145   549
UAG       8.50  May   12.50  UAGEV   0.88  10.29    30    69
UBS      11.56  May   12.50  UBSEV   1.19  10.27    10   790
TSA       7.31  May    7.50  TSAEU   0.75  10.26    10    85
CBSI     19.63  May   20.00  CQQED   2.00  10.19    21    80
CPWR     24.63  May   25.00  CWQEE   2.50  10.15    44   731
KMAG      4.31  May    7.50  KMQEU   0.44  10.14     1  1000
DGN      11.13  May   12.50  DGNEV   1.13  10.11    50   406
ANTC     24.75  May   25.00  AQCEE   2.50  10.10    20    97
REGI      6.19  May    7.50  QRGEU   0.63  10.10   160   321
NMR      24.94  May   25.00  NMREE   2.50  10.03     2     1
PRD      19.94  May   20.00  PRDED   2.00  10.03    15   171
ACTN     28.13  May   30.00  QNCEF   2.81  10.00    20    56
IDXC     14.38  May   15.00  XQWEC   1.44  10.00     3    90
CFN       6.75  Jun    7.50  CFNFU   1.69  25.00    15   660
GGUY      4.13  Jun    5.00  GQUFA   1.00  24.24    10   432
SKYC      7.44  Jun    7.50  KQFFU   1.75  23.53    17   237
TLXN      9.19  Jun   10.00  TNQFB   1.88  20.41     9  1228
BTIM     17.50  Jun   17.50  QBOFW   3.38  19.29   104   443
VLNC      6.94  Jun    7.50  VHQFU   1.31  18.92    50   907
AFCI      8.97  Jun   10.00  AQFFB   1.69  18.82    64  1782
DRMD      9.63  Jun   10.00  DUQFB   1.75  18.18     2   952
CYCH     13.69  Jun   15.00  KBQFC   2.38  17.35    30   895
TWMC     12.00  Jun   12.50  TQTFV   2.06  17.19    25   158
PPOD     11.00  Jun   12.50  QPPFV   1.88  17.05    18   493
WALK      4.06  Jun    5.00  OQWFA   0.69  16.92     5    34
CATP     15.00  Jun   15.00  TQPFC   2.50  16.67    63   429
ETEC     28.88  Jun   30.00  EBQFF   4.75  16.45     2   115
PHYC      4.66  Jun    5.00  PQHFA   0.75  16.11    50   310
GEMS      3.56  Jun    5.00  GQMFA   0.56  15.79    10   566
SKYT     15.13  Jun   17.50  MMQFW   2.38  15.70     5   750
IRF       7.31  Jun    7.50  IRFFU   1.13  15.38    10   314
SYBS      7.44  Jun    7.50  SBQFU   1.13  15.13     5  1116
PROX     29.00  Jun   30.00  WQGFF   4.38  15.09     3   169
MDM       5.00  Jun    5.00  MDMFA   0.75  15.00   115  3683
DBCC     13.63  Jun   15.00  BQDFC   2.00  14.68    50   983
IDX       7.25  Jun    7.50  IDXFU   1.06  14.66   150   308
IM       21.31  Jun   22.50   IMFX   3.13  14.66    19   733
TECD     22.19  Jun   22.50  TDQFX   3.25  14.65    50   167
HRBC      6.88  Jun    7.50   BQFU   1.00  14.55    10   124
ICGX     21.75  Jun   22.50  QIGFX   3.13  14.37    10   525
BEAM     10.94  Jun   12.50  BAQFV   1.56  14.29    13   143
PXD       7.50  Jun    7.50  PXDFU   1.06  14.17     5   119
IDTC     17.88  Jun   20.00  IQJFD   2.50  13.99    14   575
ESPI     13.44  Jun   15.00   AQFC   1.88  13.95    21   497
ASPT      6.75  Jun    7.50  ATQFU   0.94  13.89     5   181
BTIM     17.50  Jun   20.00  QBOFD   2.38  13.57   291   237
DGN      11.13  Jun   12.50  DGNFV   1.50  13.48    91   380
MMWW     15.00  Jun   15.00  EQBFC   2.00  13.33     3   100
OEI       6.56  Jun    7.50  OEIFU   0.88  13.33     4  3874
ORB      29.00  Jun   30.00  ORBFF   3.75  12.93   470   701
AMMB      7.75  Jun   10.00  UKQFB   1.00  12.90    57  1363
EGGS     17.81  Jun   20.00  EGQFD   2.25  12.63    15  1580
DUSA      8.44  Jun   10.00  QDUFB   1.06  12.59    10    48
NEM      17.19  Jun   17.50  NEMFW   2.13  12.36    10   647
TLXN      9.19  Jun   12.50  TNQFV   1.13  12.24    20   217
CYGN      8.22  Jun   10.00  YNQFB   1.00  12.17    10   108
HMSY      4.63  Jun    5.00  HQNFA   0.56  12.16     2    76
BEAS     16.75  Jun   17.50  BRQFW   2.00  11.94     9  1411
CHRZ     10.50  Jun   12.50  ZQHFV   1.25  11.90    40   199
WND       7.38  Jun    7.50  WNDFU   0.88  11.86    10   644
ABTE      6.38  Jun    7.50  QZBFU   0.75  11.76    30  4366
CRUS      6.94  Jun    7.50  CUQFU   0.81  11.71     5   319
KMAG      4.31  Jun    7.50  KMQFU   0.50  11.59     4   298
FOSL     29.13  Jun   30.00  QFSFF   3.38  11.59    10    29
IDC       4.44  Jun    5.00  IDCFA   0.50  11.27    20  4208
SLI      22.38  Jun   22.50  SLIFX   2.50  11.17    10   155
SKYC      7.44  Jun   10.00  KQFFB   0.81  10.92     2    70
SNC      28.69  Jun   30.00  SNCFF   3.13  10.89    10   160
TDFX     13.25  Jun   15.00   FQFC   1.44  10.85    18   229
KELL     16.44  Jun   17.50  KQCFW   1.75  10.65    30   322
HMAR      2.38  Jun    5.00  VQHFA   0.25  10.53    30   162
ZITL      2.38  Jun    5.00  ZQIFA   0.25  10.53    40  2812
IDTC     17.88  Jun   22.50  IQJFX   1.88  10.49     5   188
XIRC     25.75  Jun   30.00  XQRFF   2.69  10.44     3   110
ARX      14.38  Jun   15.00  ARXFC   1.50  10.43     2   130
FSII      6.00  Jun    7.50  FQHFU   0.63  10.42     5    34
PLAB     19.38  Jun   20.00  PQFFD   2.00  10.32    20    31
NE       16.50  Jun   17.50   NEFW   1.69  10.23     3  1572
PDS      12.44  Jun   12.50  PDSFV   1.25  10.05     3    16
CATP     15.00  Jun   17.50  TQPFW   1.50  10.00    37   136



************************************************************
NAKED PUT SECTION
************************************************************
Put Writing: Tactics and Strategies

'Put writing' is designed to complement a stock trading portfolio 
because it offers two methods for generating profits: collecting
premium by selling an out-of-the money option or acquiring a
stock at a reduced price.

The basic strategy involves selling a put against funds or other
collateral held in your brokerage account. The sole purpose of
the collateral is to assure that money is available to purchase
the stock should the put be assigned to the account. Generally,
the buyer of the put will exercise the option if the underlying
stock drops below the sold strike price. If the stock does not
drop below the strike price by expiration, the premium will be
retained by the seller.

'Put writing' takes advantage of the concept of time decay (the
premium of option declines as the option approaches expiration).
Unlike stock trading, where an investor can hold on to a stagnant
stock indefinitely hoping it will rebound, the value of an option
will decline if the stock fails to move. This time erosion allows
a trader to profit without having to correctly predict the future
direction of a stock's movement, as long as it remains above the
sold strike price. Time premium decays at a fairly predictable
rate and falls rapidly in the final month of option expiration.

'Put writing' for monthly income generally involves selling
out-of-the-money puts on a stock that the investor expects to
finish above the sold strike price. The majority of the time,
the sold put will expire worthless, allowing the investor to
keep the premium and receive a reasonable profit without ever
having to buy the underlying stock. There is still the margin
requirement but this commitment of funds is usually less than
the outright purchase of an equivalent number of shares.

An investor who is interested in buying a stock may also consider
selling a cash-secured put as another means of acquiring the issue.
Generally, when a person wants to buy a stock at a specific price,
he will use some type of "limit" order. The problem is, after the
initial order is placed, the stock will not be purchased until it
trades at or below the limit price. Instead of waiting for that
to happen, he could sell a cash-secured put. A premium (the price
of the option) will be paid to his account for the obligation to
buy the stock. He has determined that the cost basis (strike price
minus the premium) is an acceptable price to own this new stock
that he wants to be a part of his portfolio. This strategy is used
by portfolio managers as well as individual investors because it
"pays" them for assuming the obligation to buy a particular stock.

Next week: Choosing the right option...
------------------------------------------------------------------
                      *** 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

WAVO    9.25   8.00   Apr   7.50  0.44  *$  0.44  18.4%  26.7%
DRMD    6.81   9.63   Apr   5.00  0.44  *$  0.44  24.4%  26.6%
XCED   12.38  14.75   Apr  10.00  0.44  *$  0.44  14.6%  21.2%
ARTT    8.38  11.88   Apr   7.50  0.75  *$  0.75  23.3%  20.2%
PROX   30.00  29.00   Apr  25.00  1.13  *$  1.13  13.9%  20.1%
NDB    25.13  27.44   Apr  20.00  1.06  *$  1.06  17.4%  18.9%
ZD     24.63  24.00   Apr  17.50  0.63  *$  0.63  11.3%  16.4%
NDB    26.88  27.44   Apr  22.50  0.81  *$  0.81  11.3%  16.3%
MCHM    9.75   9.88   Apr   7.50  0.56  *$  0.56  22.3%  16.2%
AMMB    9.88   7.75   Apr   7.50  0.44  *$  0.44  18.2%  15.8%
FORE   13.13  20.56   Apr  10.00  0.50  *$  0.50  16.0%  14.7%
CYCH   15.00  13.69   Apr  12.50  0.38  *$  0.38   9.8%  14.2%
ZD     25.06  24.00   Apr  17.50  0.75  *$  0.75  13.0%  14.1%
MCHM   10.31   9.88   Apr   7.50  0.38  *$  0.38  15.6%  13.5%
EGGS   19.69  17.81   Apr  15.00  0.50  *$  0.50  11.3%  12.2%
COOL   20.63  18.81   Apr  15.00  0.38  *$  0.38   8.4%  12.2%
COOL   20.81  18.81   Apr  15.00  0.50  *$  0.50  10.7%  11.7%
PWAV   27.06  27.50   Apr  22.50  0.63  *$  0.63   9.1%   9.9%
RCNC   31.31  35.94   Apr  25.00  0.50  *$  0.50   7.4%   8.0%
ITX    15.06  12.88   Apr  12.50  0.31  *$  0.31   8.2%   7.1%
WKR    21.38  23.25   Apr  17.50  0.38  *$  0.38   7.5%   6.5%
NWAC   25.69  28.00   Apr  22.50  0.50  *$  0.50   6.6%   5.7%

-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

DRIV   44.94  Apr 35.00  DQI PG  0.44  169   34.56   4.67%
FIBR   25.13  Apr 20.00  QFW PD  0.56  374   19.44  10.03%
HDL    13.25  Apr 12.50  HDL PV  0.69  15    11.81  13.17%
MUSE   46.13  Apr 35.00  QUM PG  0.44  18    34.56   4.55%
PROX   29.13  Apr 22.50  WQG PX  0.56  0     21.94   8.77%
SUGN   22.50  Apr 17.50  UGQ PW  0.56  15    16.94  11.07%
TERN   39.13  Apr 30.00  TUN PF  0.63  123   29.37   7.45%
XCED   14.88  Apr 12.50  XCU PV  0.50  15    12.00  12.28%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

HDL    13.25  Apr 12.50  HDL PV  0.69  15    11.81  13.17%
XCED   14.88  Apr 12.50  XCU PV  0.50  15    12.00  12.28%
SUGN   22.50  Apr 17.50  UGQ PW  0.56  15    16.94  11.07%
FIBR   25.13  Apr 20.00  QFW PD  0.56  374   19.44  10.03%
PROX   29.13  Apr 22.50  WQG PX  0.56  0     21.94   8.77%
TERN   39.13  Apr 30.00  TUN PF  0.63  123   29.37   7.45%
DRIV   44.94  Apr 35.00  DQI PG  0.44  169   34.56   4.67%
MUSE   46.13  Apr 35.00  QUM PG  0.44  18    34.56   4.55%
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Company Descriptions
******************************************************************
DRIV - Digital River  $44.94     *** Internet Commerce ***

Digital River provides electronic commerce services to software
publishers and online retail clients, including the creation of
Web stores and merchandising services. They also have services
for fraud prevention, export control, and online registration.
Their clients include Corel, Cyberian Outpost, and Lotus. DRIV is
up on speculation that they will announce impressive earnings and
some say they have new contracts with AMZN and some other online
retailers. Analysts at Bear Stearns set a target at almost double
the current price.

Apr  35.00  DQI PG  Bid=0.44  OI=169  CB=34.56  ROI=4.67%

Chart = http://quote.yahoo.com/q?s=DRIV&d=3m
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FIBR - Osicom Technologies  $25.13     *** Telecom Sector ***

Osicom Technologies makes components that enhance the performance
of data and telecommunications networks. Osicom products include
dense-wave division multiplexing products, which increase an
optical fiber's transmission capacity. They also offer companies
a low-cost way to make printers and digital cameras network-ready.
The company has technical support services such as installation,
systems integration, and training. A recent IPO filing and new
product orders should help this one move higher.

Apr  20.00  QFW PD  Bid=0.56  OI=374  CB=19.44  ROI=10.03%

Chart = http://quote.yahoo.com/q?s=FIBR&d=3m
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HDL - Handleman  $13.25   *** Teletubbies Mania! ***

Handleman chooses which music products go in customers' racks. It
serves mass merchants like Kmart, WalMart and other supermarkets, 
drugstores, and specialty chains. Handleman also owns 75% of the
Teletubbies product marketer "itsy bitsy Entertainment". HDL has
left the software and book distribution business and is leaving
video distribution to focus on its music/video business. Recently
announced a joint venture with Motion Picture Corporation (MPCA)
to produce five family feature films. Don't play this one unless
you want to own the stock!

Apr  12.50  HDL PV  Bid=0.69  OI=15  CB=11.81  ROI=13.17%

Chart = http://quote.yahoo.com/q?s=HDL&d=3m
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MUSE - Micromuse  $46.13     *** Network Security ***

Micromuse makes software that monitors and manages the elements
of information technology infrastructures. Their software stores
network data and customizes views of network events, resolving
service problems and recording them with 3-D charts/reports and
spreadsheets. Its Internet Service Monitor analyzes response and
availability data about Internet services. Micromuse sells its
products directly and through distribution partners to customers
like America Online, British Telecom and Cellular One. Lots of
new contracts, an awesome outlook for future revenues and solid
technicals make this a very favorable play.

Apr  35.00  QUM PG  Bid=0.44  OI=18  CB=34.56  ROI=4.55%

Chart = http://quote.yahoo.com/q?s=MUSE&d=3m
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PROX - Proxim  $29.13     *** Earnings Run? ***

Proxim is one of the leading makers of portable, wireless LAN
access components. Wireless LANs transmit and receive data over
the air via radio waves, and Proxim makes the radio-frequency
modules and wireless adapters that are used by manufacturers in
products such as handheld data-collection terminals, notebooks,
and pen-based notepads. Frost & Sullivan recently said that PROX
has the leading share of worldwide wireless LAN unit shipments.
Traders are still speculating on the earnings report, due just
after the April strike date.

Apr  22.50  WQG PX  Bid=0.56  OI=0  CB=21.94  ROI=8.77%

Chart = http://quote.yahoo.com/q?s=PROX&d=3m
******************************************************************
SUGN - Sugen  $22.50     *** Cancer Breakthrough? ***

SUGEN develops small-molecule drugs that target cellular signal 
transduction pathways; variations in these pathways are present
in cancer, diabetes, and other disorders. SUGEN's drugs signal
molecules that function as enzymatic switches to turn on/off
specific pathways. A team at UCLA announced it was starting
trials of Sugen's drug, called SU5416, on people with advanced
colon cancer. A previous Sugen study will be chronicled on '60
Minutes,' scheduled to air April 4" on CBS. Excellent technical
support exists near $17-$18.

Apr  17.50  UGQ PW  Bid=0.56  OI=15  CB=16.94  ROI=11.07%

Chart = http://quote.yahoo.com/q?s=SUGN&d=3m
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TERN - Terayon  $39.13     *** Telecom Sector ***

Terayon Communications components improve data transmissions over
cable so that cable providers can offer high-speed, high-quality
Internet access. The company is worldwide and their customers
include Israeli cable equipment firm Telegate; Sumitomo, which
distributes the company's products in Japan; Brazilian Internet
service provider NET Brasil; US cable firm Cablevision; and Shaw
Communications. A nice rebound in early March and the sector is
is "hot".

Apr  30.00  TUN PF  Bid=0.63  OI=123  CB=29.37  ROI=7.45%

Chart = http://quote.yahoo.com/q?s=TERN&d=3m
******************************************************************
XCED - Exceed Inc.  $14.88     *** Still Going! ***

ExCeed is a new company in a new industry. They shifted from burn
treatment products to corporate services. They have a subsidiary
Journeycraft's Performance Group, that provides improvement and
incentive programs for employees, while another division provides
corporate travel services. The TheraCom Medical Communications
subsidiary offers training and education programs to health care
professionals. In 1998 the company acquired new media companies
Reset and Mercury Seven, which provide Internet consulting and
marketing services, and Zabit & Associates, a corporate services
firm. A nice break-out on solid volume and still moving up after
consolidating near our cost basis.

Apr  12.50  XCU PV  Bid=0.50  OI=15  CB=12.00  ROI=12.28%

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


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