Option Investor
Newsletter

Daily Newsletter, Sunday, 04/25/1999

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The Option Investor Newsletter            Sunday  4-25-99  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 4-23          WE 4-16           WE 4-9           WE 4-2
DOW    10689.67 +193.78 10493.89 +320.05 10173.84 +341.33   + 10.27   
Nasdaq  2590.69 +106.65  2484.04 -109.01  2593.05 + 99.68   + 74.20   
S&P-100  687.41 + 18.76   668.65 - 12.69   681.34 + 31.42   +  6.24   
S&P-500 1356.85 + 37.85  1319.00 - 29.35  1348.35 + 54.63   + 10.92   
RUT      431.73 + 10.15   421.58 + 15.72   405.86 +  7.12   +  4.82   
TRAN    3589.68 + 60.98  3528.70 +158.30  3370.40 + 61.24   + 49.05   
VIX       23.96            25.48            22.91            23.34
Put/Call    .59              .63              .54              .62
******************************************************************

What a Nasdaq week, down -150, up +260 !

The Nasdaq started the week off with a bang, down -138 points.
Only to drop again Tuesday morning to a low around 2330. The rest
is history. The bargain hunters on the sidelines started voting
for most valuable player with their checkbooks. The Nasdaq rally
was on again. The results for the week were an astounding +260 
from Tuesday's low and +106 for the week. Who would have thought
Monday night that we would close within eight points of a new 
Nasdaq record on Friday? The highlights of course were the Internet
stocks. The gloom and doom from Monday, with Internet bears predicting
return to single digit PE for all the high flyers, is over and past.
The bears became roadkill as the bulls threw money at anything
with a .com attached. How long this will last is anybody's guess.
With the weak investors flushed out of the market on Monday the
Nasdaq could continue up from here. The only challenge now is a
close and hold over 2600 and the slowing of earnings reports in
the coming weeks as the earnings cycle draws to a close. 

The Nasdaq still has a number of important names which report
earnings later than the crowd. Dell is one and it is about this
time in the earnings cycle that traders move out of stocks that
have already reported and into Dell. The DOW on the other hand as
a barometer of the NYSE is rapidly running out of big names to
report earnings. The expectation void may finally take its toll
on the recent +1,000 point move. The most positive indicator
is still the advance/decline line. For the last three weeks this
indicator has reversed the downward trend that started in April
of last year. As you can see by the two charts below the change
in the market exactly follows the A/D directional change on April
5th. The last two weeks has seen several days of advancers beating
decliners 2:1. 

DOW Advance/Decline chart 3 months:

 
DOW Advance/Decline chart 2 years:

 

On the three month chart you can possibly see a slowing of the
advances in the last several days. Again, this is due to the
earnings expectation excitement dwindling as more companies 
announce. Earnings move the market. Faced with a lack of earnings
news the market tends to focus more on the other less exciting
things like anti-trust trials, wars, FED meetings, Y2K, etc. You 
see where I am going here. The strength of market conviction
is going to be tested soon. I got a lot of email this week saying
I was putting a bearish tone on my market sentiment. Yes, you are
right. I am trying to impart my cautious view to our readers. 
Time and time again investors are lulled into a false sense of
security by a market that never seems to stop only to have the
stuffing knocked out of them by a steep sell off. Remember
Feburary? I have literally hundreds of emails saying, "I made
$xxx,xxx in Dec/Jan only to lose it all in February." A market
that seems to go up forever with only a small correction now
and then, gives traders the false idea that ANY sell off is just
a dip and it will come back next week. This week is a prime 
example. The Nasdaq dropped -300 points from its high two weeks
ago and is now within eight points of a new record. Just a dip
to buy, right? This one was but look at the chart above and at 
dip that started in August of 1998, or August of 1997. If you
owned options then, could you have just ridden out the dip?

Even though all the technical indicators are pointing to a
continued rally, the common sense indicator is calling for 
caution. The VIX is below every moving average and nearing lows
for the year. The overhead resistance as measured by calls
on the OEX is evaporating. The Russell-2000 is within a days
move from the high for the year set back in January. So what
is wrong with this picture? Nothing! That is part of the problem.
When everything looks too good too be true it probably is. The
market tends to move contrary to investor sentiment. When there
is no fear in the market there is no one left to sell. 

To use another analogy, everybody has already voted for the rally 
with their cash and is now fully invested. If you have $100K in 
your account and you have $100K invested you cannot buy anything 
else. Multiply this by 44 million investors and you see the problem.
Without buyers there is no buying pressure. Soon lack of upward
movement promotes selling pressure as fully invested traders get
impatient and start moving back to cash. You know the feeling.
You have EMC stock you bought for $100. It went to $120 in a couple
weeks but has now drifted back down to $111. You are undecided as
to what to do. You wish you had sold at $120. You are still have
a profit but every day without upward movement causes more unrest.
Sell or hold? Every day you become more impatient. The market
has been going up like a rocket while you owned EMC but now it has
slowed. What is next? If you are fully invested and EMC announces
another 2:1 split can you buy more? No. If they announce a new 
disk drive that is twice as big for half the cost and double the 
profit margin can you buy more? No. You say that others will buy
more and push the price up for you. What if they are fully invested
also? Do you see my point. There is a limit to how much a market
can move without a sell off. There has to be rotation. Investors
must eventually sell something in order to buy something else.
Until investors sell the stocks they held through the recent rally 
there is no cash in their accounts to buy something else and start 
the cycle over again.

At the risk of belaboring the point and boring you to death lets
take this one step further. If you are like most investors you
bought your stock on margin. As the value of your stock went up
so did your buying power (more margin) in your account. Like a
good consumer you used this additional margin power to buy more
as the market went up. Now you are fully margined and any downturn
will start causing pressure on your account. Imagine waking up
on Tuesday to see the market down two days in a row and a margin
call in your mailbox. OOPS! You rush to sell something to cover 
the call. Multiply this by 44 million investors. Now this selling
pressure puts pressure on other investors that were less margined
than you. Then other investors see their favorite holding dropping
and they rush to sell to protect profits. This is how major market 
moves sometimes come to an end. Nobody expects it because everyone
is bullish. To maintain a steady market rally there must be pauses
to consolidate. The last pause we had was in March. Is that a 
ticking noise I hear?      

I am not saying rush out and sell everything. I spent several hours
Friday night planning what I am going to buy next week. My trading
profile however is not the same as most of our readers. My idea of
long term is three days or a drop in price, whichever occurs first.
Those that have been readers for sometime know I am a permanent bull. 
Probably too bullish. I also try to apply common sense to the market 
and anticipate coming events. I am not predicting DOW 9,000 again or
a major sell off in the coming weeks. I am only saying that, 

1.) You should always be aware of the market cycles. 
2.) You should NEVER assume that a sell off is just a dip.
3.) Take profits whenever they are available.
4.) Be prepared to capitalize on drops that ARE dips.  


We are entering the Twilight Zone for option recommendations. This
is the part of earnings season we hate. Because of our stated goal
to NEVER hold over earnings announcements AND not play stocks that
recently announced, the pickings become slim. The recent Nasdaq
drop and rebound put some huge spikes on many stocks. We have a
hard time recommending stocks with $20-$30 gains in a three day
period because of the possibility of profit taking. With the market 
in rally mode PUT plays are very hard because any stock that drops for
more than a day or two starts looking like a "value play" and the
bargain hunters start circling. The good news is the number of split
announcements recently. As soon as any post-announcement depression
is over we have many good splitters to recommend. This is the time
each quarter where we are quick to pull the trigger to recommend a
play but just as quick to drop it if the market or stock does not
cooperate immediately. As investors, this means you need to be quick 
in and quicker out of each play. 

Our recent split candidates that announced this week are:

SCH  - Charles Schwab
QCOM - Qualcomm
RNWK - RealNetworks
TLAB - Tellabs
VISX - Visx Inc
Qwst - Qwest Comm.

The Option Clubs/Discussion Groups organizers got their assignments
last week and we will be emailing the readers who expressed interest
in visiting the email addresses of every organizer in their state on 
Monday. We have requested that the organizers hold the first meeting
on May 1st.  When you get the list of organizers in your state please
locate on closest to you and contact them immediately so they can
determine how many people will be attending and allocate space
accordingly. We view these discussion groups as excellent places
for novice traders to get pointers from experienced traders and 
for everyone to share and learn from their recent experiences. 
If you have not registered and would like to attend a meeting simply
send an email to Contact Support WITH YOUR CITY AND STATE.

Want to play Internet stocks and don't know which one today then
try our new link on the newsletter page, "Internet Charts".
This will display charts of the top 100 Internet charts in order
by volume. Great for a quick check or all the top movers at once.

Have a great week!

Wait for an entry point! Sell too soon.

Jim Brown
Editor

SCH  - Charles Schwab     *** announced ***
QCOM - Qualcomm           *** announced ***
AOL  - America On Line    should announce 4/27
RNWK - RealNetworks       *** announced ***
TLAB - Tellabs            *** announced ***
PVN  - Providian
VISX - VISX, Inc.         *** announced ***
AMZN - Amazon.com         should announce with earnings
VOD  - Vodaphone
MWD  - Dean Witter
QWST - Qwest Communications  *** announced ***


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

This was a great week in my book. The major Nasdaq drop
on Monday and recovery on Tuesday was a perfect example 
of an entry point. The combined days drop from the recent 
Nasdaq high of -300 points presented an almost picture
perfect setup for a technical bounce. 

Nasdaq 5 day intraday chart:

 

I was poised to buy Dell Computer this week because four
weeks before their earnings has historically been the best
entry point. Traders are moving out of other stocks that
have already announced and are moving into late announcing 
stocks. I had a target shooting order in for Dell stock
at $36 on Monday morning. After Dell bounced off $36 twice
and I did not get filled I raised my buy to $36.50 and filled
quickly. I did not want to risk not buying Dell since it 
appeared to have bottomed like we had anticipated in Sunday's
newsletter. Of course shortly thereafter, it did dip below
$36 slightly. I closed my position on Thursday afternoon for
a substantial profit at $41.50 just before the close. I was
worried Gateway would miss earnings and cause Dell to drop
as well. Gateway announced inline with estimates and had a
good conference call and after a sharp drop at the open Dell
continued up. I was planning to target shoot Dell again at
the Friday open but our T1 was down and you know how long 
it takes to place an E*Trade order by phone. Enough said!

Dell five day intraday chart:

 

On Monday afternoon, I also opened two large option positions 
on Dell. I bought the May-35 calls DLQ-EG for $4.00 and I 
stole, in my opinion, an obscene quantity of the May-50 calls
DLQ-EJ for $.44.  On Thursday I sold the May-35 calls for 
$7.50. The profit I made on these more than covered the cost
of the May-50 calls basically giving me a free position.
The bid on the May-50 calls at the close on Friday was $.88
with a high for the day of $1.13. In my book this is already
a home run but my expectations for Dell, market permitting,
in the next two weeks is the high $40 range. My target for 
selling this position is $2.44.

DLQ-EG five day intraday chart:

 
DLQ-EJ five day intraday chart:

 

Also on Monday AOL put in a solid bottom at $112 in 
the last hour of trading. You can't see it on this chart
but trust me, somebody was buying AOL at $112 and even
huge volume was not able to penetrate below that level.
A sure sign to buy in my book. I bought the MAY-110 calls,
AOO-EB for $16.50 and sold them on Tuesday afternoon for
$22.50 when AOL turned over and looked like it was going
down again. It recovered shortly thereafter but I already
had a nice profit and decided not to chase it again.
 
AOL 5 day intraday chart:

 

My loser for the week was EBAY. How can anybody lose on
EBAY with a +$60 gain from the bottom on Tuesday? Simple,
break one of the rules and you pay the price. I bought 
40 contracts of the MAY-150 calls @ $25.00 on Monday when
it appeared to bottom at $154. For the mathematically 
challenged that is a $100,000 position. I was confident
EBAY had bottomed and was going to move up strongly on
any Internet revival. After dropping from $200 the prior
week I thought it was a pretty safe play. The problem,
which stemmed from lack of research on my part was the 
BID.COM opening for trading on the Nasdaq on Tuesday
along with the accompanying publicity. EBAY opened down
-$5 and appeared very weak. The other problem was in 
having such a large position. Nothing drops faster than
option premiums on an Internet stock moving the wrong way.
I had visions of a huge loss on a position I would have 
trouble liquidating if EBAY kept moving down. When the
bounce came at 9:00, as you can see on the chart, I had
an opportunity to bail for a very small loss. I gladly
took it and ran back to safety. Hindsight is 20/20 and
those same options closed the week at $57.88. Am I 
disappointed? You bet, but not as disappointed as I would
have been at $7.88.

EBAY 5 day intraday chart:

 


The only position I have is the Dell May-50 calls. I do
plan to target shoot Dell stock again on Monday, market
permitting. Other than those, I plan to watch the market
and play some of the smaller Internet stocks on any
pullback. With EBAY and AOL announcing earnings this
week the little guys should respond to any positive
surprises.


Calls bought and sold:

MON EBAY  MAY-150 QXB-EJ @ $25.00 sold $24.50 loss    -2%
MON AOL   MAY-110 AOO-EB @ $16.50 sold $22.50 profit  36%
MON DELL  MAY-35  DLQ-EG @ $ 4.00 sold $ 7.50 profit  87%

Stock bought and sold:

MON DELL  $36.50 sold @$41.50 profit 14%

Open positions:

DELL  MAY-50  DLQ-EJ @ $  .44 Friday close $.88 profit 100%
Target price $2.44





Market Sentiment
Pinnacle Capital Advisors
*************************

Recipe for Continued Market Rally? 

If you are standing in the BULLISH camp, you have got to like what 
you see - bright earnings picture, tremendous liquidity and 
improving market breadth.  One of the key indicators Pinnacle has
been focus on is the Market Volatility Index and the level of
OTM call buying by option speculators.  As shown by our analysis
below, both reveal a positive bullish picture over the near
term.  Overhead market sentiment is slowing evaporating while
underlying support is building.  Other positive developments are
the Russell 2000 resistance and the improving advance-decline
line.

The recent market rally has been due, in part, to the better-
than-expected earnings reports. According to First Call, the
current quarter numbers have come in appreciably ahead of street
expectations.

                             Current       Historic
Earnings                     Quarter       Average

Beat Expectations              64%          56%
Met Expectations               23%          19%
Below Expectations             12%          26%

Source: First Call




BULLISH Signs:

Russell 2000              Advancing higher and closed and
                          ABOVE the key 430.

Market Volatility (VIX)   Evaporated and trading comfortably
                          below its 50-day moving average (27.16)
                          keeping current bullish trend 
                          intact for the moment.

Advance/Decline Line      Advancers beat decliners for the 11th
                          time in the last 12 sessions.

Pinnacle Index            Excessive OTM call buying in check as
                          evidence by our low Pinnacle Index


BEARISH Signs:

Interest Rates            Trading ABOVE 200dma and 5.50%
                          Benchmark. (5.596%)


 


 


 


OTM Call Analysis

As we move through May's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 680-740 among option
speculators. As we have been documenting, excessive out-of-the-
money (OTM) call may serve as overhead resistance.


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%     
Friday, April 9             74,028     +107.8%     

May Expiration Cycle
OEX OTM Call Analysis (Open Interest May 680-740)

Date                 Open Interest       Change %    Alert
-----------------------------------------------------------------
Friday, April 16            30,697          -
Friday, April 23            53,887        +75.5%      *



Market Sentiment at a Glance    Friday     Tues      Thurs  
Indicator                       (4/23)     (4/27)    (4/29) Alert

Pinnacle Index (OEX):          

Overhead Resistance (680-695)     1.9
Underlying Support  (645-660)     1.9

Put/Call Ratios:

CBOE Total P/C Ratio               .5
CBOE Equity P/C Ratio              .3      
OEX P/C Ratio                     2.0


Peak Open Interest (OEX):

Puts                              660 
Calls                             720
P/C Ratio                        1.18       

Market Volatility Index (VIX):	

CBOE VIX                        23.96                 


Investors Intelligence:

Bullish                         56.4% *
Bearish                         30.8% *	



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                       (4/13)      (4/27)    (4/29)
-----------------------------------------------------------------
               
                    (690-695)      4.5
                    (680-685)      1.3
Overhead Resistance (680-695)      1.9

OEX Close                       687.41 

Underlying Support  (645-660)      1.9
(655-660)	1.7
                    (645-650)      2.2
 
Average ratings: 
Resistance levels 2.0 / Support Levels .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is eroding at the OEX 680/695 level 
while the underlying support is building at the
OEX 645/660 level.


Put/Call Ratio                   Friday      Tues       Thurs
Strike/Contracts                 (4/13)     (4/27)     (4/29)
-----------------------------------------------------------------
CBOE Total P/C Ratio               .50
CBOE Equity P/C Ratio              .34
OEX P/C Ratio                     2.07


(OEX)
-----------------------------------------------------------------
Peak Open Interest   Friday         Tues         Thurs
Strike/Contracts     (4/23)         (4/27)        (4/29)
-----------------------------------------------------------------
Puts                 660 / 10,261
Calls                720 /  8,704
Put/Call Ratio       1.18


 


VIX
Market Volatility Index 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 23, 1999                          23.96 


 


-----------------------------------------------------------------
Investors Intelligence 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
March 4, 1999       Bottom            49.1        32.5

-----------------------------------------------------------------


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

April 7, 1999                         56.4        31.6
April 14, 1999                        55.9        30.5
April 21, 1999                        56.4        30.8  *


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

DOW Industrials    9,750  10,000  10,690    BULLISH   4.7
SPX S&P 500        1,300   1,350   1,357    BULLISH   4.22
OEX S&P 100          660     680     687    BULLISH   4.22
RUT Russell 2000     390     420     432    BULLISH   4.22

NDX NASD 100       2,075   2,250   2,210    Neutral   4.22
MSH High Tech      1,000   1,100   1,064    Neutral   4.22


Technology

XCI Hardware         875     900     902    Neutral   4.22
CWX Software         600     650     641    Neutral   4.22
SOX Semiconductor    375     420     395    Neutral   4.12
NWX Networking       450     490     498    BULLISH   4.22
INX Internet         550     700     621    Neutral   4.22


Financial

BIX Banking          675     720     719    BULLISH   4.22
XBD Brokerage        400     540     464    Neutral   4.14
IUX Insurance        625     655     667    BULLISH   4.22


Other

RLX Retail           900     970     925    Neutral   4.22
DRG Drug             390     425     392    Neutral   4.22
HCX Healthcare       780     850     798    Neutral   4.22
XAL Airline          170     185     185    Neutral   3.30
OIX Oil & Gas        250     260     282    BULLISH   3.30



Posture Alert

Bright earnings picture, liquidity and improving market 
breadth has sparked the market.  We remain Bullish across
select market indices and industry sectors.  The Russell
2000 has also eclipsed the key 430 benchmark. 


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

Existing Home Sales Mar    Forecast:  4.95M  Previous: 5.02M

Tuesday:

LJR Redbook         4/24  ` Forecast:  --     Previous: -0.5%
API Oil Stocks      4/23   Forecast:  --     Previous: -2.05M
Consumer Confidence APR    Forecast:  134.0  Previous:  133.9  

Wednesday:

Durable Goods Orders MAR   Forecast:  1.2%   Previous: -4.9%

Thursday:

Jobless Claims      4/24   Forecast:  315K   Previous: 314K 
Money Supply(M2)    4/19   Forecast:  --     Previous: -$11.8B
Employment Cost Idx Q1     Forecast:  0.7%   Previous:  0.7%
APICS Survey        APR    Forecast:  --     Previous: 49.3 
New Home Sales      MAR    Forecast:  874K   Previous: 881K 
Help Wanted Idx     MAR    Forecast:  --     Previous: 93   

Friday:

GDP                 Q1-adv Forecast:  3.5%   Previous:   6% 
Chicago PMI         APR    Forecast:  57.0   Previous:  57.0
Michigan sentiment  APR-F  Forecast:  104.9  Previous: 105.7


*********************************
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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              4-25-99
Sunday                   2  of  6



***************************************
THIS WEEKS EARNINGS
***************************************

Monday April 26th   Symbol    Zacks  Yr Ago

AIRBORNE FRGHT      ABF         0.58    0.63
ALLIED WASTE        AW          0.22    0.18
AMERADA HESS        AHC        -0.44   -0.76
ARROW ELECTRONI     ARW         0.34    0.43
ATLANTIC COAST      ACAI        0.18    0.16
BANKERS TRUST       BT          1.08    2.01
BUSINESS OBJECT     BOBJ        0.13    0.08
CREATIVE COMPUT     MALL        0.04   -0.23
CYBERCASH           CYCH       -0.44   -0.53
CYMER INC           CYMI       -0.09    0.09
DENDRITE INT        DRTE        0.12    0.08
EBAY INC            EBAY        0.02    0.01
EG&G INC            EGG         0.28    0.25
FOSTER WHEELER      FWC         0.36    0.43
FRIEDE GOLDMAN      FGI         0.41    0.27
FRONTIER CORP       FRO         0.27    0.23
GREAT LK CHEM       GLK         0.52    0.50
GUILFORD PHARMA     GLFD       -0.43   -0.36
HALLIBURTON CO      HAL         0.20    0.44
HOMESTAKE MNG       HM          0.00    0.01
IMC GLOBAL INC      IGL         0.57    0.48
INSIGHT ENTRPRS     NSIT        0.24    0.18
INSO CORP           INSO        0.05    0.01
INTERFACE INC A     IFSIA       0.16    0.20
INTERIM SVCS        IS          0.32    0.26
INTERPUBLIC GRP     IPG         0.31    0.26
INTL HOME FOODS     IHF         0.28    0.24
INTL NETWORK SV     INSS        0.13    0.09
IRIDIUM WORLD       IRID       -2.99   -1.45
JONES APPAREL       JNY         0.43    0.37
KEMET CORP          KMET        0.07    0.34
LASON INC           LSON        0.41    0.29
LEAR CORP           LEA         0.72    0.69
LEGGETT & PLATT     LEG         0.31    0.29
LOUISIANA PAC       LPX         0.18   -0.23
LUBRIZOL CORP       LZ          0.35    0.52
MAGAININ PHARM      MAGN       -0.22   -0.30
MANPOWER INC WI     MAN         0.26    0.26
MRV COMMS INC       MRVC       -0.03    0.28
NBTY INC            NBTY        0.15    0.19
PEGASUS SYSTEMS     PEGS        0.12    0.07
PENNZOIL-QUAKER     PZL         0.09    0.15
PEREGRINE SYS       PRGN        0.13    0.08
PERKIN ELMER CO     PKN         0.83    0.71
PLACER DOME INC     PDG         0.09    0.06
PLATINUM SFTWRE     PSQL        0.03    0.15
POOL ENERGY SVC     PESC       -0.01    0.38
READ-RITE CORP      RDRT        0.01   -1.29
RH DONNELLY CRP     RHD         0.16    0.13
SDL INC             SDLI        0.25    0.14
SHAW INDS INC       SHX         0.24    0.15
SUIZA FOODS CP      SZA         0.58    0.54
SUNDSTRAND CORP     SNS         0.99    0.88
SUNRISE ASSIST      SNRZ        0.31    0.18
SYKES ENTRP INC     SYKE        0.23    0.16
SYNTEL INC          SYNT        0.14    0.15
TICKETMASTER ON     TMCS       -0.29   -0.32
ULTRAMAR DIAMND     UDS        -0.05    0.22
UNION CARBIDE       UK          0.41    1.01
UNIPHASE CORP       UNPH        0.32    0.23
UNOVA INC           UNA         0.05    0.14
USEC INC            USU         0.16    0.29
U.S. FOODSRVCS      UFS         0.34    0.29
VALERO ENERGY       VLO        -0.42    0.32
VEECO INSTRS        VECO        0.30    0.31
WARNACO GROUP       WAC         0.40    0.39
WATERS CORP         WAT         0.64    0.50
ZEBRA TECH CL A     ZBRA        0.42    0.43

Tuesday April 27th
ACTION PERFORM      ACTN        0.36    0.28
ALIANT COMM INC     ALNT        0.37    0.36
ALLERGAN INC        AGN         0.41    0.35
ALPHARMA INC        ALO         0.26    0.21
AMDOCS LTD          DOX         0.10    0.03
AMER ONCOLOGY       AORI        0.17    0.14
AMERICA ONLINE      AOL         0.09    0.04
ANIXTER INTL        AXE         0.23    0.24
ASCEND COMM INC     ASND        0.36    0.26
ASPEN TECH          AZPN        0.19    0.38
AT&T CORP           T           0.57    0.67
AVERY DENNISON      AVY         0.56    0.52
AVIALL INC          AVL         0.22    0.34
AVNET               AVT         0.73    1.03
BANYAN SYSTEMS      BNYN        0.03n/a
BELO (AH)-SER A     BLC         0.08    0.11
BMC SOFTWARE        BMCS        0.45    0.33
BROOKS AUTOMAT      BRKS       -0.02   -0.64
BURLNGTN INDS       BUR         0.03    0.40
CBT GROUP-ADR       CBTSY       0.02    0.15
CHECKFREE HLDGS     CKFR        0.04    0.00
CINCINNATI BELL     CSN         0.18    0.36
COINSTAR INC        CSTR       -0.33   -0.49
COLUMBIA SPORTS     COLM       -0.02    0.11
COMDISCO            CDO         0.25    0.22
CONOCO INC CL-A     COC         0.10    0.46
CREATIVE TE LTD     CREAF       0.26    0.48
CROMPTON&KNOWLS     CNK         0.46    0.42
CYTYC CORP          CYTC       -0.11   -0.37
DII GROUP INC       DIIG        0.28    0.25
DISNEY WALT         DIS         0.14    0.17
DOUBLECLICK         DCLK       -0.26   -0.16
EAGLE USA AIRFT     EUSA        0.27    0.21
ESTEE LAUDER        EL          0.38    0.33
EXCEL SWITCHING     XLSW        0.18    0.14
EXTEND STAY AM      ESA         0.05    0.05
GLENAYRE TECH       GEMS        0.05    0.05
GLOBAL CROSS        GBLX        0.00   -0.03
GUITAR CENTER       GTRC        0.17    0.13
HILTON HOTELS       HLT         0.16    0.29
INGRAM MICRO        IM          0.28    0.39
INTL MICRO COMP     IMSI       -0.02    0.18
MAPICS              MAPX        0.18    0.16
MAXIM INTG PDTS     MXIM        0.31    0.31
MERISTAR HOSPTL     MHX         0.91    0.85
MILLENNIUM CHEM     MCH         0.15    0.69
MINDSPRING ENTR     MSPG        0.15    0.04
NEWELL RUBBERMD     NWL         0.29    0.26
NOBLE AFFILIATE     NBL        -0.07    0.24
NORTHERN TELECO     NT          0.33    0.27
ORBITAL SCIENCE     ORB         0.09    0.20
PACCAR INC          PCAR        1.39    1.28
PAPA JOHNS INTL     PZZA        0.36    0.28
PAREXEL INTL CP     PRXL        0.23    0.21
PC CONNECTION       PCCC        0.27    0.20
PHILLIPS PETROL     P           0.01    0.65
PSINET INC          PSIX       -1.21   -0.51
PULTE CORP          PHM         0.39    0.25
QUANTUM CORP        QNTM        0.33    0.02
SEGUE SOFTWARE      SEGU        0.03    0.05
SENSORMATIC ELE     SRM         0.12    0.10
SEROLOGICL CORP     SERO        0.17    0.15
SERVICEMASTR CO     SVM         0.11    0.10
SHOP AT HOME        SATH        0.01    0.06
SNYDER COMM INC     SNC         0.29    0.21
SYMBOL TECHS        SBL         0.37    0.32
TEKELEC INC         TKLC        0.05    0.10
TELECONORTHERN      NT          0.33    0.27
TEL-SAVE.COM        TALK        0.16   -0.08
TEXACO INC          TX          0.19    0.46
TWINLAB CORP        TWLB        0.12    0.27
UTD RENTALS INC     URI         0.16    0.09
UTD STATIONERS      USTR        0.49    0.44
VERIO INC           VRIO       -1.31******
WILD OATS MKTS      OATS        0.23    0.20
WITCO CORP          WIT         0.15    0.33

Wednesday April 28th
ACTEL CORP          ACTL        0.20    0.17
AHL SERVICES        AHLS        0.21    0.13
ALLEGHENY TELED     ALT         0.31    0.35
AMAZON.COM INC      AMZN       -0.29   -0.07
AMERISOURCE HLT     AAS         0.40    0.34
ANHEUSER BUSCH      BUD         0.63    0.54
ANICOM INC          ANIC        0.13    0.11
APPLEBEES INTL      APPB        0.42    0.39
ASCENT ENTMT GP     GOAL       -0.40   -0.43
BAAN COMPANY NV     BAANF      -0.11    0.01
BALLY TOTAL FIT     BFT         0.23    0.09
BECKMAN COULTER     BEC         0.56   -0.30
BEMIS               BMS         0.38    0.41
BETHLEHEM STEEL     BS         -0.24    0.49
BIG FLOWR HLDGS     BGF         0.15    0.09
BORG-WARNR AUTO     BWA         1.28    1.09
BOWATER INC         BOW         0.12    0.50
CALLAWAY GOLF       ELY         0.09    0.16
CAMBRIDGE HEART     CAMH       -0.16   -0.16
CARDINAL HEALTH     CAH         0.55    0.48
CAREMATRIX CORP     CMD         0.31    0.19
CELESTICA INC       CLS         0.24    0.15
CELLNET DATA        CNDS       -0.89   -0.73
CENTEX CORP         CTX         0.98    0.71
CLEAR CHANNEL       CCU        -0.08    0.02
COMAIR HLDGS        COMR        0.35    0.28
COMPLETE BUS        CBSI        0.26    0.16
CONDOR TECH         CNDR        0.22    0.15
CONSOL EDISON       ED          0.76    0.73
COOPER CAMERON      CAM         0.30    0.60
CORE LABS NV        CLB         0.09    0.17
CVS CORP            CVS         0.38    0.34
DATA DIMENSIONS     DDIM        0.22    0.08
DEVON ENERGY        DVN         0.00    0.29
DOLLAR THRIFTY      DTG         0.09    0.03
DTE ENERGY CO       DTE         0.75    0.72
DU PONT (EI) DE     DD          0.59    0.92
EARTHWEB INC        EWBX       -0.92   -0.27
FED MOGUL           FMO         0.95    0.63
FIBERMARK INC       FMK         0.51    0.54
GLOBAL IMAGING      GISX        0.22    0.22
HOLOGIC INC         HOLX        0.19    0.20
HUSSMANN INTL       HSM         0.11    0.10
IKON OFFICE SOL     IKN         0.14    0.19
INTERMEDIA COMM     ICIX       -2.47   -3.03
LABOR READY INC     LRW         0.01    0.01
LIPOSOME CO         LIPO        0.03   -0.13
MASCO               MAS         0.36    0.31
MENTOR GRAPHICS     MENT        0.05    0.00
METAMOR WORLDWD     MMWW        0.32    0.21
MILACRON INC        MZ          0.39    0.44
MIN MINING&MFG      MMM         0.92    0.98
NORFOLK SOUTHRN     NSC         0.30    0.35
NOVOSTE CORP        NOVT       -0.75   -0.40
OGDEN CORP          OG          0.21    0.23
OSTEOTECH INC       OSTE        0.20    0.15
PEAPOD INC          PPOD       -0.30   -0.24
PEDIATRIX MED       PDX         0.47    0.39
POGO PRODUCING      PPP        -0.29    0.01
PROMUS HOTEL CP     PRH         0.46    0.41
PROVINCE HLTHCR     PRHC        0.25    0.16
QUESTAR             STR         0.46    0.50
ROMAC INTL INC      ROMC        0.19    0.15
SANTA FE EN RES     SFR        -0.12    0.00
SCIENTIFIC ATLA     SFA         0.18    0.22
SHARED MEDICAL      SMS         0.67    0.66
THOMAS & BETTS      TNB         0.66    0.65
TRICON GBL REST     YUM         0.48    0.35
UNION PAC RES       UPR        -0.12    0.13
UNOCAL CORP         UCL         0.04    0.30
UTI ENERGY CORP     UTI        -0.09    0.21
VIACOM INC CL A     VIA         0.07   -0.02
VISTA MED TECH      VMTI       -0.23   -0.31
VOCALTEC COMM       VOCLF      -0.21   -0.23
WARNER LAMBERT      WLA         0.44    0.33
WORLD ACCESS        WAXS        0.07    0.25

Thursday April 29th
ADAPTEC             ADPT        0.29    0.25
ALPHA INDS          AHAA        0.31    0.06
ANADARKO PETROL     APC        -0.11    0.18
APACHE CORP         APA        -0.04   -0.13
APRIA HLTHCARE      AHG         0.15    0.16
ATLANTIC DATA       ADSC       -0.02    0.15
AXENT TECH          AXNT       -0.07    0.19
BRIGHTPOINT INC     CELL        0.06    0.11
CALIF MICROWAVE     CMIC       -0.08   -2.70
CENTURY BUS SVC     CBIZ        0.16    0.02
CHECKPOINT SYS      CKP         0.05    0.37
CITADEL COMM        CITC       -0.26    0.20
CLEAR CHANNEL       CCU        -0.08    0.22
COMPUWARE CORP      CPWR        0.29    0.19
CONCENTRA MANGD     CCMC        0.15    0.46
DIAMETRICS MED      DMED       -0.17   -0.91
ELECTR DATA SYS     EDS         0.36    0.08
ENGINEERNG ANIM     EAII        0.08    0.21
FURN BRAND INTL     FBN         0.48    0.13
GST TELECOMMS       GSTX       -1.45    0.15
HA-LO INDS INC      HMK         0.09   -0.43
HOLLINGER INTL      HLR         0.16    0.50
HOLLYWOOD ENTMT     HLYW        0.29    0.21
INFOSPACE.COM       INSP       -0.16    0.57
ISIS PHARMACEUT     ISIP       -0.43   -0.39
JDA SOFTWARE GP     JDAS       -0.03   -0.15
KERR-MCGEE          KMG        -0.20   -0.10
KULICKE & SOFFA     KLIC       -0.23    0.14
MCI WORLDCOM        WCOM        0.34    0.22
MCLEODUSA INC-A     MCLD       -0.70    0.18
MEDIAONE GROUP      UMG        -0.34   -1.19
MGC COMM INC        MGCX       -0.79    0.16
MILLENNIUM PHAR     MLNM       -0.02    0.06
NALCO CHEM CO       NLC         0.45    0.49
NATL STEEL CL B     NS         -0.60    0.40
NCS HEALTHCARE      NCSS        0.28    0.13
NEWFIELD EXPL       NFX         0.02    0.22
NEWPARK RESOUR      NR          0.02   -0.30
NEXTLINK COMM       NXLK       -2.28    0.07
ORTHODONTIC CTR     OCA         0.21    0.42
PATHOGENESIS CP     PGNS       -0.30    0.59
PHARM & UPJOHN      PNU         0.42   -0.27
PRIDE INTL INC      PDE         0.09    0.22
READERS DIGEST      RDA         0.17    0.29
REPUBLIC SRVCS      RSG         0.26    0.03
REVLON INC-A        REV        -0.53    0.01
ROBERTS PHARMA      RPC         0.15    0.44
ROYAL CARIBBEAN     RCL         0.47    0.23
R&B FALCON CORP     FLC         0.03    0.10
SERVICE CORP IN     SRV         0.35    0.42
SPECTRIAN CORP      SPCT       -0.65    0.17
STAFF LEASING       STFF        0.25    0.45
STERIS CORP         STE         0.36    0.20
STILLWATER MNG      SWC         0.25    0.39
STORAGE TECH        STK         0.42    0.37
SUMMIT TECH         BEAM        0.03    0.10
TENNECO INC         TEN         0.23    0.44
TESORO PETROL       TSO        -0.05    0.13
THRUSTMASTER        TMSR       -0.10   -0.29
TRANSAMERICA CO     TA          0.97    0.75
ULTRAMAR DIAMND     UDS        -0.05    0.43
USA NETWORKS        USAI       -0.15    0.00
WASTE MGMT          WMI         0.61    0.17
WAVEPHORE INC       WAVO       -0.27   -0.30
WILMAR INDS INC     WLMR        0.23   -1.19

Friday April 30th
AFTERMKT TECH       ATAC        0.09    0.30
AMER MOBILE SAT     SKYC       -1.26   -1.00
ASHANTI GOLD        ASL         0.14    0.14
BATTLE MTN GOLD     BMG        -0.04   -0.02
BIOCHEM PHARMA      BCHE        0.19    0.21
CBS CORP            CBS         0.02    0.03
CENTURY TELEPHO     CTL         0.39    0.31
CMP MEDIA INC       CMPX        0.05    0.03
COULTER PHARMA      CLTR       -0.81   -0.77
COX COMMS NEW-A     COX        -0.13   -0.38
ERICSSON LM ADR     ERICY       0.10    0.12
GENL INSTRUMENT     GIC         0.19    0.13
GETCHELL GOLD       GGO         0.02   -0.18
GIBSON GREETING     GIBG       -0.25    0.38
GILEAD SCIENCES     GILD       -0.56   -0.25
HAGLER BAILLY       HBIX        0.07    0.19
HERCULES INC        HPC         0.35    0.70
INFO RESOURCES      IRIC       -0.01    0.07
IVAX CORP           IVX         0.05   -0.03
METRO ONE TELEC     MTON        0.06    0.02
MICRO WAREHOUSE     MWHS        0.32    0.28
NORTH FACE INC      TNFI        0.03    0.04
O REILLY AUTO       ORLY        0.36    0.27
OLIN CORP           OLN         0.02    0.80
PATTERSON ENGY      PTEN       -0.14    0.14
PIONEER NAT RES     PXD        -0.42   -0.16
RESPIRONICS         RESP        0.27    0.13
SANGSTAT MED CP     SANG       -0.52   -0.41
SINCLAIR BROADC     SBGI       -0.04   -0.08
SOLUTIA INC         SOI         0.54    0.51
TOTAL RENAL CR      TRL         0.34    0.28




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

Index     Last   Week
Dow    10689.67  195.78
Nasdaq  2590.69  106.65
$OEX     687.41   18.76
$SPX    1356.85   37.86
$RUT     431.73   10.15
$TRAN   3589.68   60.98
$VIX      23.96    1.56

Stock            Week

AMZN     210.13   20.12 Earnings are Wednesday, Split Candidate
MFNX      79.00   12.26 Splits 2:1 on May 18th.(Has Momentum)
CSCO     117.38   11.69 New, Earnings are May 11th.
NXLK      71.13   11.44 New, Earnings run for April 29th!
FDX      115.06    9.68 New, Splits 2:1 on May 7th
CTXS      38.69    8.44 New, Consolidated. Starting new run
SUNW      63.31    8.38 Still has room to recover
HWP       77.13    6.75 New, Earnings run for May 17th
ANF       95.88    6.12 Earnings are May 11th, Split Cand.
AOL      147.00    5.81 Dropped ahead of earnings,Split Cand.
CMVT      65.19    5.69 New, No post split depression here!
DELL      43.00    4.76 Earnings are May 18th.(Run has Begun)
ADBE      63.50    4.06 New, Breakout above $60
WMT       50.94    3.44 Making an earnings run to May 11th
DCX       87.13    1.12 Dropped, no direction before earnings
PFE      127.00   -0.06 Earnings are Over, time to recover
YHOO     187.69   -1.50 New, Looks like the correction is over
CMGI     258.88   -2.00 Dropped, weakness ahead of split run
UCL       38.31   -2.56 Dropped, moving wrong direction

Puts
RMBS      55.25  -10.52 Intel is looking for alternatives
NSOL      80.00   -9.75 Competition is still main concern
PG        90.50   -7.69 New, Negative outlook for Q4
MU        37.88   -7.50 Possible entry point. Confirm direction
DLJ       76.38   -3.00 No reaction splits by SCH & EGRP
AMGN      65.13   -1.70 Dropped, successful put play
APD       42.68   -0.81 New, Excitement is over, time 2 fall
MSFT      86.00   -0.63 Not moving enough
ELN       59.75   -0.25 Volume very heavy in Fri's sell-off
AMTD     127.00    1.00 Multiple split announcements too much
NDB       55.50    5.38 Multiple split announcements too much
SCH      120.69    5.87 Announced a split and everyone yawned
FNM       72.50    6.12 New, Rolling stock, time to roll over
EGRP     104.06   11.50 Announced 2:1 split on Friday



*************
PICK SUMMARY
*************

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

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

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

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

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

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


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

CALLS:

CTXS - Citrix Systems
NXLK - Nextlink Communications
CSCO - Cisco Systems
CMVT - Comverse Technology
FDX  - Federal Express
ADBE - Adobe Software
HWP  - Hewlett-Packard
YHOO - Yahoo
FNM  - Fannie Mae  (Rolling stock play)

PUTS: 

APD  - Air products
PG   - Proctor & Gamble CO.

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

DCX $98.06 -1.44 (+1.12)  DCX has had an up-and down week, 
not the kind of performance we are looking for in an earnings 
run.  The company will report its numbers on Wednesday April 
28th as suggested in an article by AP Online.  Even though it 
could break to the upside in a mini-run, we feel there are 
much better plays and are therefore dropping this car maker 
for the time being.  If you do continue to hold your 
positions, remember that we suggest selling before the 
actual earnings are released.  

UCL $38.31 -1.06 (-2.57)  If you looked at some charts and 
saw a spike down for -$11.13, rest assured- it was only a 
misprint!!  Our hearts stopped beating for a few seconds too 
but we confirmed that UCL only lost -$1.06 in trading on 
Friday.  Wheeeewww!!  In any case, we are dropping it as one 
of our calls.  UCL is currently resting on its 10 dma and it 
looks like it is undergoing some strong consolidation.   The 
company will report its earnings on Wednesday April 28th 
before the market opens.  If you are still holding on to some 
positions, we strongly suggest closing them before Wednesday 
since we never recommend holding over the announcement.

CMGI $258.88 (-2.00) We are dropping CMGI before
it corrects on us again.  CMGI does have a split coming up,
but we feel there will be another down turn before its 
split run.  We will pick CMGI back up after it corrects.  

AOL $147.00 (+31.12) Following stellar gains this past 
week, it's time to say good bye to an old friend.  AOL has 
been with us for 6 weeks and given us a $51 gain during 
that period.  Most recently, we've been holding AOL as a 
split candidate on its way to earnings, scheduled for 
announcement Tuesday, April 27 after the close.  Veterans 
will recall that we rarely if ever recommend holding 
through earnings since a stock will almost always drop 
unless a company delivers the absolute unexpected (ala 
IBM).  While we still like AOL and believe it will rise 
into earnings and split, we need to let it go now in front 
of the report on Tuesday.  (Fare well, Ol'Buddy, 'til we 
meet again - sniff, sniff.)  Don't forget, for the high
risk players...AOL is likely to announce yet another 
split with earnings (the only reason we can think of to
hold over, but then what happens if they don't???)


PUTS: 

AMGN $65.12 (-1.69) Well Amgen took us for a wild ride this 
week.  If you chose wisely on your entry points and managed 
your stop losses effectively, there were a lot of profits to 
be made in this stock.  Monday saw a move from $69 down to 
$60.  Tuesday's pre-earnings rally took it up to $69 only to 
see a drop back to $60 on Wednesday when earnings were 
lackluster.  That's right, two chances in the same week to 
play a $9 move.  The latter part of the week showed signs of 
a short-term bottom.  We are going to let it go as a successful 
put.

NDB $55.50 (+5.38) The online traders got another push Friday 
as EGRP declared a 2-for-1 stock split.  This came a day after 
Schwab declared a 2-for-1 too!  It looks like these group 
leaders will keep everyone afloat for awhile.  This doesn't 
change our feelings towards NDB, which should have no support 
in this range, but this industry moves tightly in sync with 
one another.  Ocassionally, Murphy's law rears its ugly head 
and we never saw an entry point on Friday.

EGRP $104.06 (+11.50) EGRP gave us a nice post-earnings 
drop of -$16, but the loss didn't stick for long even 
though there was nothing to make it rise.  It rose anyway 
in general market and Internet strength and capped the week 
off with a 2:1 split Friday sending the stock up $8.  While 
we still believe the on-line broker group, including EGRP 
will exhibit weakness, the split announcements coming from 
the sector (Schwab too) make it tough to justify keeping 
them on the put list.  Thus we're dropping EGRP for now with 
the idea that they may make our call list as they approach 
their May 21st split date.

AMTD $127 (+1.00) Same story, different stock.  Internet 
strength coupled with Schwab and E*Trade announcing 2:1 
splits following earnings has given this sector a shot in 
the arm.  While we still believe sector weakness will show 
its face, we can't in good conscience keep AMTD on the put 
list.  Thus we're dropping it for now.  Remember, don't 
fight the tape

MSFT $86.00 (+5.00) Expectancy of a post-earnings 
depression never materialized.  Though Microsoft cautioned 
on the outlook for future (typical), we only saw the price 
drop -$1 on the news.  Investors focus seems to be squarely 
place on CFO Greg Maffei's prediction that PC unit 
shipments will grow by 16% to 17% this year.  "We're not 
seeing a meltdown in PC demand," he said.  It doesn't hurt 
that NASDAQ index tacked on 108 points last week, which 
can't happen without Microsoft's participation.  In any 
case, we're dropping MSFT for now until it makes the play 
cut again, most likely in a future call section.



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

PLAYS CONTINUED IN SECTION THREE.

******************************
SEE DISCLAIMER IN SECTION ONE
******************************
The Option Investor Newsletter          4-25-99
Sunday             Part 3 of 6

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

SCH  - Charles Schwab     *** announced ***
QCOM - Qualcomm           *** announced ***
AOL  - America On Line    should announce 4/27
RNWK - RealNetworks       *** announced ***
TLAB - Tellabs            *** announced ***
PVN  - Providian
VISX - VISX, Inc.         *** announced ***
AMZN - Amazon.com         should announce with earnings
VOD  - Vodaphone
MWD  - Dean Witter
QWST - Qwest Communications  *** announced ***
ANF  - Abercrombie & Fitch
YHOO - Yahoo

 

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

Symbol - Stock      Splits/Date  

ZQT  - Quicksilver     3:2 04-23-99 ex-date 04-26
MFNX - Metromedia      2:1 05-03-99 ex-date 04-04 current play
AEOSD- American Eagle  2:1 05-03-99 ex-date 05-04 
INSP - InfoSpace       2:1 05-04-99 ex-date 05-05
CMCSK- Comcast         2:1 05-05-99 ex-date 05-06
FDX  - FDX Corp        2:1 05-05-99 ex-date 05-06 current play
ABOV - AboveNet Com    2:1 05-07-99 ex-date 05-10
SONE - Security First  2:1 05-07-99 ex-date 05-10
QCOM - Qualcomm        2:1 05-10-99 ex-date 05-11
RNWK - RealNetworks    2:1 05-10-99 ex-date 05-11
VISX - Visx Inc        2:1 05-12-99 ex-date 05-13
COX  - Cox Comms       2:1 05-13-99 ex-date 05-14
NITE - Knight-Trimark  2:1 05-14-99 ex-date 05-17
NTBK - NetBa@nk        3:1 05-14-99 ex-date 05-17
TGLO - Theglobe.com    2:1 05-14-99 ex-date 05-17
GMST - Gemstar         2:1 05-14-99 ex-date 05-17
AOC  - Aon Corp        3:2 05-17-99 ex-date 05-18
MEL  - Mellon Bank     2:1 05-17-99 ex-date 05-18
TLAB - Tellabs         2:1 05-17-99 ex-date 05-18
COVD - Covad Comms     3:2 05-18-99 ex-date 05-19
ALTR - Altera Corp     2:1 05-19-99 ex-date 05-20
CDWC - CDW Computer    2:1 05-19-99 ex-date 05-20
MFNX - Metromedia      2:1 05-19-99 ex-date 05-20
ISSX - ISS Group       2:1 05-19-99 ex-date 05-20
CNCX - Concentric Net. 2:1 05-21-99 ex-date 05-24
EGRP - E*Trade         2:1 05-21-99 ex-date 05-24
QWST - Qwest Comm      2:1 05-24-99 ex-date 05-25
IBM  - IBM             2:1 05-26-99 ex-date 05-27 
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28 
EMC  - EMC Corp        2:1 05-28-99 ex-date 06-01
C    - Citigroup       3:2 05-28-99 ex-date 06-01
CNET - CNET Inc        2:1 05-28-99 ex-date 06-01
VRSN - VeriSign        2:1 05-28-99 ex-date 06-01
APCC - Amer Pwr Conv   2:1 05-28-99 ex-date 06-01
JWA  - John Wiley      2:1 05-28-99 ex-date 06-01
VRSN - VeriSign        2:1 05-28-99 ex-date 05-31
FON  - Sprint          2:1 06-04-99 ex-date 06-07
BGEN - Biogen          2:1 06-25-99 ex-date 06-28
PFE  - Pfizer Corp     3:1 06-30-99 ex-date 07-01 current play


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

 

SPECIAL SHORT TERM SPLIT PLAYS 
*******************************
We always recommend selling the day of the actual 
split or earlier. 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 ! 

******

MFNX - Metromedia Fiber Netwk. $79.00 (+4.25)(+12.25)(P4W +20.25)

See details in sector list

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

******

FDX - Federal Express $115.06 (+9.68)

FedEx stock took off following a pre-Christmas article in 
Barron's, in which the CEO called FDX an Internet company. He 
said FedEx was shipping a large amount of the goods being bought 
online, and the increase in ecommerce would show up in FDX's 
profits. On 3-18, third quarter earnings bore this out when FDX 
announced record profits that beat analysts' estimates. It also 
announced that it would split 2:1 on May 6th (after the bell), 
and that is why we are recommending FDX now. With a 5-year pilot 
contract approved in February and the launch of a "shipping 
portal" on the Web in an agreement with Netscape, only a major 
crash or a huge jump in oil prices could ground this airline 
in the near term. All technical indicators are positive and 
it has just been "cleared to climb" as it flies toward its 
split.

See details in sector list

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

*****************************************************
THE PLAYS 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. 

*****************************************************
DELL - Dell Computer $43.00 ($4.75)(-5.31)(P4W +1.37)

Regarding sentiment, Compaq was bluffing the other players 
at the table.  Michael Dell really does have a hot hand and 
he's said so.  Who do you believe?  Us too.  Microsoft, HP, 
IBM, and recently Gateway have shown us the industry is 
stronger than CPQ would have had us believe.  IBM was the 
convincing catalyst.  Technically, Dell's chart has just 
turned sharply upward and crossed into positive territory.  
Volume was up sharply this week too.  Dell will be the last 
of the large-cap techs to report earnings due after the 
close May 18, just 3.4 weeks away.  With 2 billion shares 
in float, it's pretty tough to get huge daily gains from 
Dell like we saw in the past, but last weeks action was 
encouraging.  Mild support is $41; $38 is pretty firm.  
Given the recent market-wide gains, there will be profit 
taking bumps along the way.  So target shoot on any 
weakness and look for $45-48, maybe more prior to earnings 
announcement if the market is willing.  Confirm market 
direction and remember to protect those $$$ with stops.

See details in sector list

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

******

WMT  Wal-Mart $50.94 (+3.44)(-3.88)

The Retail King is back in charge!  It has added +$3.44 this 
past week in what is shaping up to be a great earnings run.  
It will announce its numbers on May 11th (First Call).  They 
have already hinted that it could be a strong quarter by 
saying that their February and March sales figures were higher 
than those from last year.  Wait for an entry point then feel 
free to buy some Wal-Mart calls.    

See details in sector list

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


**************
ROLLING STOCK
**************

FNM - Fannie Mae $72.50 (+6.12)

Fannie Mae (formerly the Federal National Mortgage Association) 
is a public company whose existence is mandated by the US 
government.  Its purpose is to provide liquidity in the mortgage 
market by buying mortgages from lenders and packaging them for 
resale as bond-like securities.  This cushions lenders from the 
worst effects of fluctuations in interest rates and allows them 
to offer mortgages to people who would not otherwise be 
considered. FNM's status as a government corporation has become 
controversial because of the business advantage its federal hybrid 
status gives it over its private rivals. 

We are adding FNM as a channeling stock.  When we look at the 
chart, we see that FNM has been channeling in about a $6 range.
At the current time it is at the high of this range.  We suggest
buying a put and playing the trend down for a few points.  
This type of play can be risky at times when the stock decides
to break out of the channel.  Don't be greedy, get a few points
and get out.  When we see a bounce off the lower boundary, buy
a call.  

BUY PUT MAY-70*FNM-QN OI=958 at $1.50 SL=0.75
BUY PUT MAY-75 FNM-QO OI=128 at $4.00 SL=2.50 ITM $2.50

Average daily volume = 2.76 mln
Chart = http://quote.yahoo.com/q?s=FNM&d=3m


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

AMZN - Amazon.com $210.13 (+20.13)(+7.12)(+11.88)(P4W +49.50)

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.

The week didn't start off well for any of the internets and 
AMZN got hit hard losing -31.06.  But this stock is no 
follower and can't be kept down for very long.  Amazon did 
an about face and rallied for the rest of the week.  The 
stock has gained over 50 points since Monday's massacre on 
the Nasdaq.  And what a performance it had on Friday.  Not 
only did AMZN break through its recent opposition of 
$191-192, but it flew up to $216.50 and set an all-time 
new high!  

Now there's nothing holding this stock back, except that 
earnings are this Wednesday after the bell. Perhaps you 
enjoy extreme risk, but we never recommend holding over 
an earnings date.  First Call estimates that they'll come 
in around -.29 vs -.07 from last year at this time, but 
revenues should be tripled at $264 mln. As a final comment, 
it's possible that Amazon may use Wednesday as an 
opportunity to "officially" announce a proposed stock split. 
Their shareholder's meeting to vote on increasing common 
shares from 300 mln to 1.5 bln is scheduled for May 20th. 
This increase would certainly give the Board of Directors 
plenty of shares for another stock split. 

But heed this warning. Next week could prove very volatile 
for AMZN. Know your tolerance for risk. Please put your 
stops in place and as Jim proclaims "always sell too soon!".
After a $50 run, it could profit take before earnings.
Of course it could keep running into earnings as well.
We will be dropping this play on Tuesday despite our
strong expectation of a split announcement.  Due to the
short time frame for the rest of this play, it is not 
recommended if you can not watch the market.

BUY CALL MAY-200*YQN-ET OI=3704 at $30.25 SL=23.75
BUY CALL MAY-210 YQN-EB OI=1721 at $25.88 SL=20.25
BUY CALL MAY-220 YQN-ED OI=1688 at $21.38 SL=16.75
BUY CALL MAY-230 YQN-EF OI=4093 at $18.00 SL=14.00
BUY CALL JUL-250 ZQQ-GJ OI=2247 at $26.13 SL=20.50

Picked on April 2nd at   $171.00   PE = n/a
Change since picked       +39.13   52 week low =$ 12.87
Analysts Ratings       9-4-6-0-0   52 week high=$216.50
Last earnings 12/98 est= -.18 actual= -.14 surprise= 22.22%
Next earnings 04-28 est= -.29 versus= -.07
Average daily volume = 10.1 mln
Chart = http://quote.com/q?s=AMZN&d=3m

******

YHOO - Yahoo! $187.69 (-1.50)(-17.81)(P3W +37.00)

Yahoo! is the undisputed leader of Internet media 
applications.  Second only to AOL in advertising revenue, 
YHOO offers up 235 million page views per day to Web 
visitors according to Media Matrix, a closely watched 
indicator of Web activity.  YHOO has recently agreed to 
acquire GeoCities and Broadcast.com in separate 
transactions.  Japan's media technology aggregator, 
Softbank owns 28%.

Though news last week from Media Matrix stated that Lycos 
had pulled fractionally ahead of YHOO in number of users in 
a 1-month snapshot, YHOO is still on top where it counts 
most with 235 mln. page views per day - almost 4 times the 
amount of Lycos.  The ad revenue won't slow anytime soon.  
Technically, YHOO has made steady gains over the last 4 
trading days following a sharp sell-off last Monday.  It 
also successfully traded and held above $180 resistance as 
well as its 30 DMA of $185.  MACD, stochastic, momentum and 
RSI have all turned nicely upward, though not yet in the 
positive parts of the chart.  In a nutshell, fears of the 
bursting Internet bubble have waned and enthusiasm is 
returning to the sector.  Witness Amazon's $20 rise in 
anticipation of its earnings this week.  Yahoo though won't 
report again until July 7.  YHOO volume has been unusually 
low and the price has gone up anyway signaling that 
investors are comfortable with this price level and won't 
likely sell anytime soon.  Just in case, confirm market 
direction and use stops.  With the Internet bunch, you 
never know what will come out of left field.  High Risk!!

Though only recently beginning to track data for the 
Internet, Nielsen rating service made a splash ranking the 
most popular Internet sites last week.  In a highlight from 
the report, we note that Yahoo attracted 30 percent of all 
Internet users, however, those who came spent almost 28 
minutes there, making Yahoo the most "sticky" of the top 
sites, as researchers call the measure of time spent on a 
Web site (Nielsen).  A big deal was made in the press this 
week of the Media Matrix report showing YHOO getting 
outflanked by Lycos in the "audience reach department".  
While significant, it's only a snapshot from one source.  
Other sources show differently, still placing YHOO as #1.

BUY CALL MAY-180*YHV-EP OI=1506 at $20.13 SL=15.75
BUY CALL MAY-190 YHV-ER OI=2099 at $13.13 SL=10.50
BUY CALL MAY-200 YHV-ET OI=3524 at $11.38 SL= 9.00
BUY CALL JUN-200 YHV-FT OI= 201 at $18.25 SL=14.25

Picked on April 24 at $187.69         PE = 1150
Change since picked      0.00         52 week low =$ 24.75
Analysts Ratings  13-12-5-0-0         52 week high=$244.00
Last earnings   04/99 est .09 actual .11 
Next earnings   07-07 est .09 versus .04
Average Daily Volume = 9.0 mln.
Chart = http://quote.yahoo.com/q?s=YHOO&d=3m


***********************
PC Hardware
Software
Electronics
***********************

DELL - Dell Computer $43.00 ($4.75)(-5.31)(P4W +1.37)

The one, the only, the amazing. . . Dell!  Dell is the 
direct sales model leader and pioneer of the on-line retail 
business.  They sell PC's notebooks, servers and work 
stations built to order direct from their factories 
worldwide.  Eager buyers pony-up 14 million e-$$$ daily for 
their products.  Total annual sales for the trailing 12 
months were $18.2 bln., excluding their recent foray into 
direct selling of other manufacturers' software and support 
products from their gigabuys.com web site.  Despite their 
recent fall from grace, they are growing at an annual rate 
of 38% with margins that are the envy of the industry.  
Return on equity is a whopping 93% and growing.

Regarding sentiment, Compaq was bluffing the other players 
at the table.  Michael Dell really does have a hot hand and 
he's said so.  Who do you believe?  Us too.  Microsoft, HP, 
IBM, and recently Gateway have shown us the industry is 
stronger than CPQ would have had us believe.  IBM was the 
convincing catalyst.  Technically, Dell's chart has just 
turned sharply upward and crossed into positive territory.  
Volume was up sharply this week too.  Dell will be the last 
of the large-cap techs to report earnings due after the 
close May 18, just 3.4 weeks away.  With 2 billion shares 
in float, it's pretty tough to get huge daily gains from 
Dell like we saw in the past, but last weeks action was 
encouraging.  Mild support is $41; $38 is pretty firm.  
Given the recent market-wide gains, there will be profit 
taking bumps along the way.  So target shoot on any 
weakness and look for $45-48, maybe more prior to earnings 
announcement if the market is willing.  Confirm market 
direction and remember to protect those $$$ with stops.

In the news Gateway got a downgrade from "strong buy" to 
"buy" in which the analyst cited "aggressive posturing by 
Dell in the consumer space."  Dell will be presenting their 
case again this week at the San Francisco-based Hambrecht
and Quist conference.  We'll keep you abreast of the news.

BUY CALL MAY-40 DLQ-EH OI=46736 at $5.00 SL=3.25
BUY CALL MAY-45*DLQ-EI OI=71919 at $2.38 SL=1.25
BUY CALL JUN-40 DLQ-FH OI= 3450 at $6.50 SL=4.75
BUY CALL JUN-45 DLQ-FI OI= 3157 at $3.88 SL=2.25

Picked on April 18 at  $38.25          PE = 81 
Change since picked     +4.75          52 week low =$16.56
Analysts Ratings 11-12-11-0-0          52 week high=$55.00
Last earnings   02/99 est .16  actual .16
Next earnings   05-17 est .16  versus .11
Average Daily Volume = 47.1 mln.
Chart = http://quote.yahoo.com/q?s=DELL&d=3m

******

SUNW - Sun Microsystems $63.31 (+8.37)(-15.31)

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. 

Not much change since we started covering Sun again last 
Thursday.  You may recall we cited last week's strong 
bounce after diving deep below their 50 DMA during their 
post-split depression.  The technicals are crossing with 
conviction to the positive side of the chart.  Exercise 
just a bit of caution since SUNW dipped (only -$0.13 on low 
volume) Friday making the line graph look like it's peaked.  
We suspect though it's most likely just a Friday profit-
taking before the weekend - not a big deal.  Wait for 
upward market direction before entering the play.

FYI, It looks like Microsoft gets to depose Sun's VP of 
Staff Operations on Friday, which will be open to the 
public as a result of a separate ruling sought by the 
press.  It shouldn't affect Sun at all.  In the news last 
week, Chairman and founder of Sun, Scott McNealy has 
stepped aside as acting President to promote Ed Zander, 
Sun's current head of 7 different market divisions, to the 
position.  McNealy will remain as chairman and CEO.  Word 
is that McNealy didn't want him replacing Eckhard Pfeiffer 
at Compaq or Lew Platt at HP.  Both Zander and McNealy deny 
the suspicions.  We don't care as long as Sun continues to 
execute and eventually shows us an upside surprise next 
time.

BUY CALL MAY-60 SUQ-EL OI=5212 at $6.25 SL=4.50
BUY CALL MAY-65*SUQ-EM OI=6552 at $3.50 SL=1.75
BUY CALL JUN-60 SUQ-FL OI= 768 at $7.75 SL=6.00
BUY CALL JUN-65 SUQ-FM OI= 703 at $5.25 SL=3.50

Picked on April 22 at $63.44         PE = 46
Change since picked    -0.13         52 week low =$19.19
Analysts Ratings  10-8-4-0-0         52 week high=$72.50
Last earnings  04/99 est .35 actual .35 
Next earnings  07-16 est .47 versus .37
Average Daily Volume = 17.3 mln
Chart = http://quote.yahoo.com/q?s=SUNW&d=3m

******

HWP - Hewlett-Packard $77.13 (+6.75)

Started in a garage in 1939 by Bill Hewlett and Dave Packard, 
Hewlett-Packard is now one of the world's largest computer 
companies and the leading producer of test and measurement 
instruments. It makes over 29,000 products for personal use and 
for use in industry, business, engineering, science, medicine and 
education. In addition, the company makes networking products, 
medical electronic equipment, instruments and systems for 
chemical analysis, handheld calculators and electronic components. 

HWP reached $83.99 in early February, but pulled back from that 
high. Technically, it began to look positive again in early to 
mid April, and in the last few days, it has pushed above all 
its major moving averages. Big Blue was the catalyst with an 
incredibly strong earnings announcement this past week. IBM's 
report helped convince investors that the bad news delivered 
earlier by Compaq was specific to Compaq and not indicative of 
an industry wide slowdown. With about 3 weeks to go before its 
own earnings are announced, HWP now has the earnings run green 
light. It is one of the later tech issues to post earnings (along 
with Dell), and barring any warning from the company, it should 
have a nice sympathy move up as the date approaches.

In a special to "The Street.Com", Helene Meisler is calling for 
a correction beginning in the next couple of weeks, but she 
highlighted HWP, saying it has one of her best technology-stock 
charts.

BUY CALL MAY-75*HWP-EO OI=9790 at $5.38 SL=3.75
BUY CALL MAY-80 HWP-EP OI=6578 at $2.75 SL=1.50
BUY CALL JUN-80 HWP-FP OI=1140 at $4.00 SL=2.50

Picked on Apr 25th at $77.13   PE = 26
Change since picked  +$ 0.00   52 week low =$47.06
Analysts Ratings  8-10-7-0-0   52 week high=$83.88
Last earnings 01/99 est 0.83   actual 0.92 surprise=+10%
Next earnings 05-17 est 0.80   versus 0.65
Average daily volume = 3.45 mln
Chart = http://quote.yahoo.com/q?s=hwp&d=3m

******

CTXS - Citrix Systems, Inc $38.69 (+8.44)

Citrix provides application server products and technologies 
that allow networked computers to run Windows-based programs 
from a central server.  This gives their clients effective 
and efficient management of their applications.  Its WinFrame 
software is used by well-known companies such as Sears Tire 
Centers and Hewlett-Packard Europe.

Tuesday proved to be the turning point for CTXS.  It surged 
ahead 4 points to close at 34.25.  This solid bounce 
penetrated the resistance at $33-34 and also positioned it well 
above the bullish 10 dma.  For the next three days the stock 
has made steady gains on strong volume.  Importantly CTXS 
has established its direction and confirmed its strength by 
not returning to its original support at about $30-31.  From 
a technical standpoint, three major indicators are pointing 
toward a continued climb.  But as always, make certain of the 
market direction before you jump in the game.

This week's news correlated with the stock's rise. On Monday, 
Citrix posted 1Q earnings of .27 to beat the Streets 
projections by .03.  At the same time, they set 
a $200 mln stock buyback and also announced plans for the 
formation of an internet business unit to expand their role 
in Application Provider Services (APS).  Following this 
release of company news, Needham & CO raised their rating 
on CTXS to "strong buy" from "buy" igniting further 
excitement for Wednesday's trading.  By that evening, 
AG Edwards stepped in and raised its rating on the 
stock to "buy" from "accumulate".  The recent 2:1 split on 
March 25th has made the price of CTXS attractive to more 
investors. Conceivably with this element in mind, and along 
with the two upgrades, the buying pressure could continue to 
drive CTXS higher.  But of course, nothing is a guarantee 
when it comes to the wild stock market.  Always keep your 
stops in place.

BUY CALL MAY-35 XSQ-EG OI=1504 at $5.25 SL=3.50
BUY CALL MAY-40 XSQ-EH OI= 891 at $2.38 SL=1.25
BUY CALL MAY-45 XSQ-EI OI= 497 at $0.81 SL=0.00
BUY CALL JUN-40*XSQ-FH OI= 621 at $4.00 SL=2.50
BUY CALL JUN-45 XSQ-FI OI= 830 at $2.38 SL=1.25

Picked on April 25th at $38.69   PE = 46
Change since picked      +0.00   52 week low =$23.12
Analysts Ratings     5-3-0-0-0   52 week high=$53.75
Last earnings    3/99 est= .14   actual= .28 
Next earnings    7-20 est= .28   versus= .19
Average daily volume = 2.64 mln
Chart= http://quote.yahoo.com/q?s=ctxs&d=3m

*****

ADBE - Adobe $63.50 (+4.06)

Founded in 1982, Adobe Systems Incorporated is a leading provider 
of publishing and imaging software technologies, and the second 
largest desktop software company in the world with annual 
revenues approaching $1 billion. The company builds software 
solutions for professional publishers, web and graphic designers, 
document-intensive organizations, business users, and consumers. 
Every graphic artist is familiar with Adobe products and most of 
us have used Acrobat Reader.

This is a momentum breakout play. Throughout March, Adobe climbed 
fairly steadily until it neared $60. It hit $59.82 on 3-29, but 
it pulled back after that and only recently made a new effort to 
clear resistance. It flirted with $60 all last week, and finally 
was able to close above that magic number both Thursday and 
Friday. On Friday it also set a new 52-week high of $64.75. (Its 
all-time high was just over $70 in December, 1995). ADBE is 
above its 10 dma and technically looks very positive to continue 
moving up!

News: On 4-16, Adobe announced that it would buy back up to 5 
million shares of its stock. On 4-22, investors reacted positively 
to an announcement of several promotions from within the company 
and of changes in the executive management team.

BUY CALL MAY-60 AEQ-EL OI= 679 at $6.38 SL=4.50
BUY CALL MAY-65*AEQ-EM OI=3262 at $3.63 SL=2.00
BUY CALL JUN-65 AEQ-FM OI=  92 at $5.25 SL=3.75

Picked on Apr 25th at $63.50   PE = 34
Change since picked  +$ 0.00   52 week low =$23.63
Analysts Ratings   2-6-3-0-0   52 week high=$60.25
Last earnings 02/99 est 0.52   actual 0.60 surprise=+15%
Next earnings 06-25 est 0.63   versus 0.43
Average daily volume = 828.3 K
Chart = http://quote.yahoo.com/q?s=adbe&d=3m

**************
NETWORKING &
COMMUNICATIONS
**************

CSCO - Cisco Systems, Inc $117.38 (+11.69)

Cisco is a worldwide leader in networking for the Internet and
providing networking solutions to businesses that allow 
for seamless communication without regard to differences in 
time, place, or type of computer equipment. Cisco directs 2/3 
of the network traffic out there and is also a major maker 
of LAN switches. The strategic alliances they have formed 
with such big names as Microsoft, Alcatel, and US West further 
enhance their influence and presence in the networking industry.

After the "dips" in the tech sector at the beginning of the week, 
CSCO jumped on the tech rally bandwagon and closed up 6% on 
Wednesday.  The powerful momentum continued on Thursday and 
Friday .  In very active trading, CSCO added +5.25 and +4.19,
respectively, for total gains of over 11 points for the week.  
This surge popped the stock right over its 10 dma of $109-110 
and reversed all the technical ticks to positive directions. 
Earnings' hubbub may keep this uptrend on track.  Cisco is 
expected to report in a couple of weeks on May 11th.

This month Cisco announced it would buy GeoTel in a $2 bln deal.  
The company's strategy is to get a better foothold in the 
Internet phone business.  More recently, buyout rumors have 
resurfaced again regarding 3Com.  3Com is the 2nd largest in 
the network industry, only behind Cisco, but has been plagued 
with financial woes.  Ericsson, Alcatel, Lucent, Nokia, and 
Siemens appear to be the likely suitors - each would benefit 
from 3Com's technology that merges voice and data.  Any merger 
will heat up the competition.

BUY CALL MAY-115*CYQ-EC OI=9810 at $ 7.25 SL=5.50
BUY CALL MAY-120 CYQ-ED OI=9673 at $ 4.50 SL=2.75
BUY CALL MAY-125 CYQ-EF OI=5231 at $ 2.63 SL=1.50
BUY CALL JUN-115 CYQ-FC OI= 398 at $10.13 SL=7.75
BUY CALL JUN-120 CYQ-FD OI= 816 at $ 7.63 SL=5.75

Picked on April 25th at $117.38   PE = 137
Change since picked       +0.00   52 week low =$ 41.12
Analysts Ratings    15-14-2-0-0   52 week high=$120.00
Last earnings on 1/99  est= .33   actual= .34   surprise= +3.03%
Next earnings on 5-11  est= .37   versus= .30
Average daily volume = 14.6 mln
Chart = Http://quote.yahoo.com/q?csco&d=3m

******

CMVT - Comverse Technology, Inc. $65.19 (+5.69)

CMVT makes enhanced telecommunications systems and is the 
third-largest firm in the voice mail market (after Lucent's 
Octel and Northern Telecom).  Its TRILOGUE INfinity and 
Access NP product lines supply voice and fax messaging, 
automated personal assistant, and call answering services. 
TRILOGUE is marketed to telecommunications network operators 
and gives multiple telephone users access to integrated 
digital information and messaging services.  CMVT's AUDIODISK 
and ULTRA lines are communications monitoring systems used by 
police and surveillance agencies, correctional institutions, 
emergency 911 services, financial institutions, and 
telemarketers.

CMVT split on the 16th of April and went directly into a post-
split depression.  The stock didn't stay there long.  On 
Wednesday, it started a nice three-day run.  We are just a 
dollar short of CMVT's 52-week high.  CMVT closed at its
high of the day, a bullish indicator.  Be careful of any
profit taking on Monday after three straight up days.  

Check out symbols carefully with your broker.  CMVT's stock 
split created some strange strike prices and different root 
symbols.

BUY CALL MAY-60 CQV-EL OI=50 at $7.25 SL=5.50 ITM $5.19
BUY CALL MAY-65 CQV-EM OI= 0 at $4.25 SL=2.50
BUY CALL JUN-60 CQV-FL OI=22 at $8.88 SL=6.75 ITM $5.19

Picked on Apr.25th at $65.19  PE = 35
Change since picked    +0.00  52 week low =$19.58
Analysts Ratings   8-2-0-0-0  52 week high=$66.42
Last Earnings 03/99  est .42  actual .44 
Next Earnings 06-01  est .44  versus .34
Average daily volume = 1.14 mln.
Chart = http://quote.yahoo.com/q?s=CMVT&d=3m

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

PLAYS CONTINUED IN SECTION FOUR.

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


The Option Investor Newsletter             4-25-99
Sunday                4  of  6

**************
NETWORKING &
COMMUNICATIONS - continued
**************

NXLK - Nextlink Communications, Inc. $71.13 (+11.44) 

Nextlink Communications is a local exchange carrier that provides 
telecommunication services via its own fiber-optic network.  
They provide switched local and long distance services to 
primarily small to medium-sized businesses in 26 markets in 
8 states.  Future networks are under development in Atlanta, 
New York City, and San Francisco.

Pre-earnings excitement began on Wednesday when NXLK spiked 
up 18% to tack on $9.68 by the end of trading.  On strong 
volume, the surge continued the following day and NXLK 
advanced another +5.17 to close at its resistance around 
$68-69.  The gain on Friday was small at +1.25, but still 
significant.  Old resistance was surpassed and a new 52 week 
high was established at $72.13!  

There's no earth-shattering news event driving this stock price. 
It's purely an earnings run. NXLK is expected to report 
its earnings this week on Thursday, April 29th.  This is a 
quick play and you should be in and out of your positions 
by then.  Holding over any company's earnings announcement 
is very risky and we never recommend it.  

Note: The option contracts with strike prices above 65 have 
little or no OI.  This is because they are new additions as 
a result of NXLK's recent and unexpected surge. 

BUY CALL MAY-65 QNF-EM OI=237 at $10.50 SL=8.00
BUY CALL MAY-70 QNF-EN OI=137 at $ 7.88 SL=6.25
BUY CALL MAY-75 QNF-EO OI=  0 at $ 5.75 SL=4.00  All new strikes
BUY CALL MAY-80 QNF-EP OI=  0 at $ 3.88 SL=2.25
BUY CALL JUN-70 QNF-FN OI=  5 at $11.00 SL=8.75
BUY CALL JUN-75 QNF-FO OI=  0 at $ 8.75 SL=6.75

Picked on April 25th at    $71.13   PE = N/A
Change since picked         +0.00   52 week low =$10.56
Analysts Ratings        6-5-3-0-0   52 week high=$72.13
Last earnings 12/98 est= -1.85  actual= -2.07  surprise= -11.89%
Next earnings 04-29 est= -2.27  versus= -1.19
Average daily volume = 498.1 K
Chart = http://quote.yahoo.com/q?NXLK&d=3m

******

MFNX - Metromedia Fiber Netwk. $79.00 (+4.25)(+12.25)(P4W +20.25)

You want bandwidth?  We got your bandwidth right here! How 
about 380,000-miles of dedicated fiber-optic network?  We 
got you covered in New York City metro area (including 
parts of Jersey), Chicago, Philly and Washington, DC too.  
Our lease arrangements with communications carriers, 
including local-exchange carriers; long-distance, paging, 
cellular, PCS, and cable companies let us save our Internet 
service providers, and corporate and government customers 
lots of money when they access our network.  We're 
expanding our US-to-UK services through a joint venture 
with Racal Telecom.  Our chairman and CEO Stephen Garofalo 
owns about 30% of the stock, and John Kluge, one of a 
handful of deci-billionairs in the country owns 60% of the 
voting shares, so you know we aren't going anywhere.  
Meter's runnin' buddy, what'll it be?

Wow!  Nice follow-through on Friday, bucking the sector 
trend, which was slightly down.  Volume last week was 20-
80% in excess of its usual - lots of buyers driving up the 
price of a limited supply.  Technically, the chart has a 
demonstrably sharp upturn and is about to go positive.  
Resistance is $84.50, its intraday high set 2 weeks ago.  
With 3.4 weeks to go until its 2:1 split on May 18, along 
with their earnings announcement in there sometime too 
(they won't set a date until after May 1), we expect more 
gains and new highs prior to that, market willing.  With 
the chart as strong as it is, target-shooting dips intraday 
may get you the best entry.  Contrarians, take note: huge 
overhead sentiment is indicated by 5015 open interests for 
the AUG-80 (indicating resistance), but its unlikely to 
prevent a short-term split run.  Confirm market direction 
before entering and use stops to protect your profits.

Last week MFNX's competitor, QWST announced they would sell 
10% of the company to BellSouth.  Also, the largest merger 
in corporate history is attempting to take place between 
the German and Italian phone giants.  Their next target is 
the U.S.  This is causing an industry buzz and speculation 
as to "who's next".  MFNX is a company that doesn't release 
a lot of news, but the merger "fairy dust" falls on 
everyone, including MFNX.

BUY CALL MAY-75 QFN-EO OI= 368 at $10.50 SL=8.00
BUY CALL MAY-80 QFN-EP OI= 533 at $ 8.00 SL=6.25
BUY CALL MAY-85*QFN-EQ OI= 206 at $ 6.13 SL=4.25
BUY CALL JUN-80 QFN-FP OI=   3 at $11.25 SL=9.00
BUY CALL JUN-85 QFN-FQ OI=   O at $??.$$ SL=??  new strike
BUY CALL AUG-80 QFN-HP OI=5015 at $15.88 SL=12.50

Picked on April 11 at $67.38     PE = 7475 (really!)
Change since picked   +11.62     52 week low =$ 6.38
Analysts Ratings   3-1-0-0-0     52 week high=$84.50
Last earnings 02/99 est -.01     actual  .00
Next earnings 05-17 est -.17     versus -.05
Average Daily Volume = 715 K
Chart = http://quote.yahoo.com/q?s=MFNX&d=3m

*************
Transportation 
*************

FDX - Federal Express $115.06 (+9.68)

Headquartered in Memphis, TN, FedEx is the world's largest 
express shipping company. Its 145,000 employees ship over 3.2 
million packages daily to 210 countries around the world. Its 
hub and spoke shipping system (not just its airplanes and trucks) 
operates like finely tuned, well-oiled machine.

FedEx stock took off following a pre-Christmas article in 
Barron's, in which the CEO called FDX an Internet company. He 
said FedEx was shipping a large amount of the goods being bought 
online, and the increase in ecommerce would show up in FDX's 
profits. On 3-18, third quarter earnings bore this out when FDX 
announced record profits that beat analysts' estimates. It also 
announced that it would split 2:1 on May 6th (after the bell), 
and that is why we are recommending FDX now. With a 5-year pilot 
contract approved in February and the launch of a "shipping 
portal" on the Web in an agreement with Netscape, only a major 
crash or a huge jump in oil prices could ground this airline 
in the near term. All technical indicators are positive and 
it has just been "cleared to climb" as it flies toward its 
split.

In the news, FDX is currently seeking approval for more flights 
into China. Remember, FDX splits May 6th, less than 2 weeks away.

BUY CALL MAY-110 FDX-EB OI=1091 at $8.63 SL=6.50
BUY CALL MAY-115*FDX-EC OI= 880 at $6.00 SL=4.25
BUY CALL MAY-120 FDX-ED OI=  86 at $3.75 SL=2.00
BUY CALL JUN-115 FDX-FC OI=  10 at $8.38 SL=6.50
BUY CALL JUN-120 FDX-FD OI=  62 at $6.25 SL=4.50

Picked on Apr 25th at $115.06   PE = 30
Change since picked   +$ 0.00   52 week low =$ 43.63
Analysts Ratings    3-1-8-0-0   52 week high=$110.38
Last earnings 02/99 est 0.45    actual 0.52 surprise=+15%
Next earnings 07-01 est 1.37    versus 1.14
Average daily volume = 1.04 mln
Chart = http://quote.yahoo.com/q?s=fdx&d=3m

*************
Retail  
*************

ANF - Abercrombie & Fitch $95.38 (+6.13)(-6.88)

Trading on its century-old name, ANF sells men's and women's 
casual clothes and accessories -- quite a change from the old 
days, when the company focused on outdoor sporting goods and 
clothing, and Ernest Hemingway and Theodore Roosevelt donned 
ANF gear while on safaris.  With more than 180 US stores, the 
company targets college students as its primary market.  ANF
searches for a college-aged sales staff and places large 
posters of frolicking twentysomething models on its walls. 
As a result, many ANF stores resemble a scene out of Beverly 
Hills, 90210. (from Hoovers)

ANF has had a nice four day run after BancBoston raised its
earning estimate and reiterated a buy on the 20th.  Earnings
are due in mid-May and there is a possibility of a stock 
split announcement.  This should lead to a nice pre-earnings
run.  ANF has plenty of shares to do a split and also has a 
shareholder meeting coming up in May.  

BUY CALL MAY- 95*ANF-ES OI=801 at $6.88 SL=4.75
BUY CALL MAY-100 ANF-ET OI=425 at $4.25 SL=2.50
BUY CALL JUN- 95 ANF-FS OI= 18 at $9.75 SL=7.25 vol=100 Fri.
BUY CALL JUN-100 ANF-FT OI=  0 at $7.13 SL=4.75 (wait for OI)
(June Calls are fairly new)

Picked on Apr.22nd at  $95.38  PE = 38 
Change since picked     +0.50  52 week low =$ 29.50
Analysts' ratings  10-5-1-0-0  52 week high=$101.50
Last earnings 01/99 est. 0.96  actual 1.12 
Next earnings 05-11 est. 0.17   versus 0.12
Average daily volume = 502 K
Chart = http://quote.yahoo.com/q?s=ANF=3m

******

WMT  Wal-Mart $50.94 (+3.44)(-3.88)

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.

The Retail King is back in charge!  It has added +$3.44 this 
past week in what is shaping up to be a great earnings run.  
It will announce its numbers on May 11th (First Call).  They 
have already hinted that it could be a strong quarter by 
saying that their February and March sales figures were higher 
than those from last year.  Wait for an entry point then feel 
free to buy some Wal-Mart calls.    

News:  The speculation in Europe continues.  WMT is still 
rumored to be eyeing up several different retailers overseas.  
The UK's ASDA and Safeway along with Belgium's GIB are all 
possible take-over candidates.

BUY CALL MAY-50*WMT-EJ OI=12768 at $3.25 SL=1.75
BUY CALL MAY-55 WMT-EK OI= 3786 at $1.25 SL=0.00
BUY CALL JUN-50 WMT-FJ OI=10114 at $4.25 SL=2.75
BUY CALL JUN-55 WMT-FK OI= 5719 at $2.13 SL=1.00

Picked on April 22nd at $50.06    PE = 51  
Change since picked     +$0.88    52 week low =$24.09
Analysts' ratings   7-10-5-0-0    52 week high=$53.41
Last earnings 12/98 est 0.66   actual 0.70  
Next earnings 05-11 est 0.44   versus 0.37
Average daily volume = 7.48 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m

*************
DRUGS  
*************

PFE - Pfizer $127.00 (-0.06)

Pfizer Inc is a research-based global pharmaceutical company 
that discovers, develops, manufactures and markets innovative 
medicines for humans and animals. Its three $1 billion plus 
drugs include Norvasc for hypertension and angina; Zoloft, a 
leading anti-depressant; and Zithromax, a highly prescribed 
anti-biotic. Other successful Pfizer drugs that we all know 
include: Viagra, Lipitor, and Celebrex. Pfizer employs nearly 
50,000 people on 6 continents.

On April 22, when PFE's previously announced 3:1 split was 
finally approved, investors sent share prices up almost $5.00. 
Very upbeat comments from the company's chairman contributed to 
the price pop. A little profit taking ensued the next day, but 
we believe the general trend in this stock will be up. Why? After 
all, PFE is well off its recent high of $150.13 and the stock 
split will be payable June 30th to shareholders of record June 
2nd--still a long way off. Well... 1)PFE announced good earnings 
with strong growth on 4-15, but they only just met First Call's 
estimate, and disappointed investors punished the stock severely. 
Furthermore, the company warned of slowing Viagra sales and a 
more disappointing second quarter. But the bad news is now already 
in the stock price. PFE is more than 20% off its high. It recently 
bounced off its 200 dma (just below $120), showing support in 
that range, so we have an idea of our downside risk. Long term 
investors, less concerned with quarter-to quarter profits will 
see the drop in price for what it is: a buying opportunity, and 
they will send the price higher over the next few weeks. They 
know that second quarter earnings will be down mainly due to 
increased R&D (GOOD for the long term) and increased sales staff 
(PFE makes BIG profits co-marketing drug's like WLA's Lipitor and 
Searle's Celebrex). In addition, Viagra's launch in Japan and 
China this quarter will help offset declining Viagra sales in 
the U.S. 2)Investor interest in drug stocks is picking up as one 
major drug company after another reports strong earnings (i.e. 
PFE, SGP, BMY, JNJ, LLY), and a rotation into this sector will 
lift drug stock prices. Finally... 3)The split is a powerful 
3-for-1, and PFE has had long pre-split runs in the past. While 
any split run is still a few weeks out, the current lower stock 
price provides an opportunity for longer-term option holders to 
get in on this one before the price starts up again, and the split 
will occur BEFORE the next quarterly earnings report--no need 
to hold over earnings. 

News: S&P analyst Herman Softlas is very positive on the drug 
group, citing growing earnings, new drugs, direct to consumer 
spending, and an expansion in pharmacy benefit plans. His 
favorites are PFE, SGP, and BMY. In drug sales: Searle's Celebrex, 
the world's first cox-2 inhibitor (PFE is co-marketer) is on 
track to sell even faster then PFE's Viagra. WLA says Lipitor, 
its cholestrol drug (also co-marketed by PFE) will be the best 
selling drug in the world in 18 months. PFE's new arrhythmia 
drug, Tikasyn, is close to FDA approval; and PFE is seeing good 
results in early trials of a new anti-frailty drug. NOTE: many 
technical indicators are still negative for PFE and more 
conservative investors might wait until PFE climbs through its 
10 dma, which it should meet at about $129 to $130. You have time 
on this one, no need to rush in.

BUY CALL MAY-125 PFE-EE OI=1463 at $6.88 SL=5.00
BUY CALL MAY-130 PFE-EF OI=3462 at $4.38 SL=2.75
BUY CALL MAY-135 PFE-EG OI=2266 at $2.56 SL=1.25
BUY CALL JUN-130 PFE-FF OI=4485 at $6.88 SL=5.00
BUY CALL JUN-135*PFE-FG OI=5138 at $5.00 SL=3.25

Picked on Apr 22nd at $128.31   PE = 45
Change since picked   -$ 1.31   52 week low =$ 86.00
Analysts Ratings  13-3-14-0-0   52 week high=$150.13
Last earnings 03/99 est 0.62    actual 0.62 surprise=+0%
Next earnings 07-09 est 0.51    versus 0.46
Average daily volume = 2.66 mln
Chart = http://quote.yahoo.com/q?s=pfe&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 
****************

DLJ - Donaldson, Lufkin & Jenrette, Inc. $76.38 (-3.00)(-6.63)

DLJ is one of the top investment firms in the United States.  
It is primarily involved with investment and merchant banking, 
providing funding for companies through direct investment, and 
managing/underwriting securities.  DLJdirect is considered one 
of the top online brokerages.  DLJ is 70% owned by The 
Equitable Companies.

After losing -$8.75 Monday, the company recovered +$6.26 in the 
next two days of trading.  After the bounce, the company took 
another U-turn.  Even though it only lost a total of fifty cents 
in trading Thursday and Friday, we predict that DLJ will continue 
to slip south.  When the markets rallied on Thursday, DLJ did not.  
This was a major sign of weakness.  If the markets correct next 
week, we see DLJ dropping along with them.   

No new news.  

BUY PUT MAY-80 DLJ-QP OI=108 at $8.88 SL=6.75
BUY PUT MAY-75*DLJ-QO OI=507 at $6.25 SL=4.75  

Average Daily Volume = 698.9 K
Chart = http://quote.yahoo.com/q?s=DLJ&d=3m

******

RMBS - Rambus Inc. $55.25 (-10.50)(-6.19)(+5.94)

Rambus Inc. develops and licenses high-performance chip-to-chip
interface technology that enables semiconductor memory devices 
to keep pace with faster generations of processors and 
controllers.  Rambus deals mainly with the multimedia, 
networking equipment, and digital TV markets.  Rambus earns 
royalties from semiconductor makers, including NEC, Samsung, 
and Intel when they use Rambus-based products.

Rambus has been one of our best put plays this past week.  The 
company shed -$10.50 in a major sell-off.  What is behind the 
downhill rampage?  Intel.  Plain and simple.  At an analyst 
meeting on Thursday, Intel announced that it would "support 
alternative chipsets."  (-TheStreet.com)  We had mentioned back 
on Sunday April 11th that Intel was rumored to be looking for 
alternatives to the Rambus chip.  Now, the rumor is reality.  
Rambus will be greatly affected by the news since Intel had 
originally been one of their biggest backers.  We expect RMBS 
to head much lower.  Make sure to set those trailing stop losses!

*As a warning, Rambus may have some strong support at the $50 
level.  It could have some trouble breaking below this.    

BUY PUT MAY-60*BNQ-QL OI=2435 at $8.25 SL=6.50
BUY PUT MAY-55 BNQ-QK OI=1452 at $5.13 SL=3.25

Average Daily Volume = 1.09 mln 
Chart = http://quote.yahoo.com/q?s=RMBS&d=3m

******

SCH - Charles Schwab $120.69 (+5.88)(-9.19)

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

Even though SCH is up +$5.88 for the week and announced a 2:1 
stock split, we still feel SCH is a put candidate.  Even with 
all of the "good news," the company wasn't able to turn in a 
stellar performance.  SCH instead hit resistance at its 15 dma 
near the $120-$121 level and fell back slightly.  Additionally, 
EGRP's 2:1 split announcement on Friday failed to spur any 
movement in SCH while the rest of the sector rose on the news.
We feel that SCH will fizzle next week as investors lose sight 
of the split scheduled for early July.  Wait for the downward
confirmation first!

BUY PUT MAY-125*SCH-QE OI=571 at $13.25 SL=10.50
BUY PUT MAY-120 SCH-QD OI=778 at $10.25 SL= 7.50
 
Average Daily Volume = 2.90 mln
Chart = http://quote.yahoo.com/q?s=SCH&d=3m

******

NSOL - Network Solutions $80.00 (-9.75)(-18.25)

Network Solutions is the company to call when you're ready 
to get your Internet domain name registered on the web.  
Its the world's largest Internet registration services 
company.  It registers and maintains both business and 
individual domain names within the .com, .net, .org, and .edu 
top-level domains.  Network Solutions also provides consulting 
for companies looking to improve online presence or Intranet 
networks.

NSOL made headlines this week as the stock was all over the 
map.  The stock tanked $30 points in the first two days of 
trading.  It was sparked by fears of losing their monopoly 
in the Internet domain registry business.  On Wednesday the 
government announced the five firms that will be competing 
for their business, one of which will be America Online.  
We saw a technical bounce Wednesday ahead of earnings and 
then right back to the sell-off Thursday and Friday.  Traders 
are bailing out of NSOL due to the unclear outlook for future 
business.  The stock was so erratic during its rise that there 
is no clearly defined support level.  Internet investors are 
not in the market for stocks whose customers are decreasing 
instead of increasing.  So we are looking for more declines 
until the company does something to shift the momentum.  Use 
the volatility to your advantage in picking your price to open 
a new play.    

BUY PUT MAY 80*JNQ-QP OI=158 at $11.88 SL=8.50
BUY PUT MAY 85 JNQ-QQ OI=240 at $14.62 SL=7.50 

Average Daily Volume = 894 K

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

******

ELN - Elan Corps Ads $59.75 (-0.25)(-16.81)

Elan is a worldwide company that develops drugs and delivery
systems that control their absorption. Elan strives to 
improve drug utilization by the human body.  It has R&D and 
manufacturing facilities in Bermuda, Ireland, Israel, and 
the US.  

After this stock being down for 6 days and then up for 3, 
we recommended "caution" on Thursday.  On Friday, the market 
sentiment and the numerous sellers desiring profits pushed 
ELN in the right direction.  The stock spiked down -6.25 
(9.5%) and the volume was at an extraordinary high level 
with over 3 mln shares traded. A very bearish sign. If this 
decline continues next week, the only resistance is its 
52-week low at $54.56.  Please confirm the descent before 
you initiate a new play.  Friday, ELAN posted 1Q EPS of .53 
which was .01 ahead of the Street's projections. So again, 
keep "caution" in mind.

BUY PUT MAY-55 ELN-QK OI=156 at $2.13 SL=1.00
BUY PUT MAY-60*ELN-QL OI=427 at $4.50 SL=2.75
BUY PUT MAY-65 ELN-QM OI=870 at $7.50 SL=5.75

Average Daily Volume= 998 K

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

******

MU - Micron Technologies $37.88 (-7.50)

MU designs, develops, manufactures, and markets semiconductor 
memory products, personal computers and custom complex printed 
circuit boards, memory module and system level assemblies.

Micron has been on a downward spiral since hitting $80.56 on 
Feb. 4th of this year. Thursday MU was downgraded from "strong buy" 
to "long-term attractive" by Daniel Niles of BancBoston Robertson 
Stephens, and it lost another 7% on nearly triple its normal 
volume. If Tom Kurlak, the former chip analyst at Merrill Lynch 
had made the downgrade, we might have thought it was time to buy 
the stock again. But Dan Niles is usually right on the money, so 
we think the stock has further to fall. Niles lowered his 3rd 
quarter for MU to $.07 from $.23 and his 1999 estimate to $.24 
from $.75. BancBoston said it was thought that DRAM chip prices 
would firm after the Japanese fiscal year end, but instead, they 
kept dropping and are now in the low $7 range. Niles expects to 
be "more bullish around August." That gives option investors 
plenty of time to play MU as a put. 

On Thursday we cautioned: "today's heavy volume may have 
exhausted the immediate supply of sell orders, so confirm 
the stock's direction before playing". That was the case and 
on Friday the stock blipped up on strong volume. We still 
think it has further to fall and that Friday's buying may 
have exhausted immediate supply of the BUY orders.

BUY PUT MAY-35*MU-QG OI=4103 at $1.94 SL=1.00
BUY PUT MAY-40 MU-QH OI=2781 at $4.63 SL=3.00

Average daily volume = 5.03 mln
Chart = 

******

APD - Air Products and Chemicals $42.68 (-.81)

Air Products and Chemicals is an international supplier of 
industrial gases, producer of specialty chemicals and related 
equipment.  The company also offers energy-related systems for
processing and engineering various chemicals such as hydrogen, 
oxygen, nitrogen, etc.  The company owns power plants and it 
also is a manufacturer of additives and adhesives. 

Air Products was a major benefactor in the push to cyclical 
stocks the past two weeks.  So much in fact that the stock 
spiked up over 10 points from all the buying interest.  This 
looks way over done since the company had no surprises to 
report with their earnings report on 4/22.  If anything, 
they cautioned about a "challenging global manufacturing 
environment" to use their words.  This is no surprise as 
chemical prices have been weak for months.  Also the analysts 
didn't wait long to voice their opinion as both Deutsche Bank 
and Brown Brothers downgraded APD this week based on the lofty
valuation.  It should only be a matter of time before the stock 
lands back on support at the $35 range.

BUY PUT MAY-45*APD-QI OI=133 at $2.88 SL=1.25
BUY PUT JUN-40 APD-RH OI= 55 at $1.12 SL=0.00

Average Daily Volume = 1.48 mln

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

******

PG - Proctor & Gamble Co. $90.50 (-7.69)

Proctor and Gamble is the world's largest manufacturer and 
distributor of personal care products, food, beverage and 
household products.  The company operates in five main areas: 
Laundry and Cleaning, Beauty Care, Food and beverage, Health 
Care and Paper.  Each of us probably has dozens of products 
in our home right now that are P&G's.  The company operates 
in over 70 countries around the world.

PG is another example of why you don't always want to hold 
through an earnings report.  P&G released their earnings for 
Q3 on Thursday morning and beat First Call by .02 cents.  The 
big news though was the company warning of slower growth in 
Q4 due to soft emerging markets and increased restructuring 
costs.  The stock is off from its all-time high of $103.81 
reached on 4/13 and plunging towards its 200-dma.  This should 
provide some support around $86 but if the Dow corrects next 
week we could go right past that level.  This is very similar 
to what happened to the stock last summer when it released 
Q2(98) earnings and the stock dropped right past all of its 
major moving averages and then some.  So watch for a possible 
repeat of history.  Lots of volume and volatility will help 
you choose a good entry point.  

BUY PUT MAY-95 PG-QS OI=2638 at $5.75 SL=3.75
BUY PUT MAY-90*PG-QR OI=4300 at $2.94 SL=1.50

Average Daily Volume = 2.35 mln

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




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




The Option Investor Newsletter            4-25-99
Sunday                5  of  6

***********************************************************
Combos      
***********************************************************
Another Awesome Week!

Friday, April 23

The Dow consolidated on Friday and blue-chip stocks succumbed to
profit-taking after setting 10 new record highs this month. The
most-watched average ended 37 points lower at 10,689. The Nasdaq
index of technology stocks filled in nicely, climbing to a new
high of 2,590 points on a wide range of performing issues. In the
broader market, advances led declines 15 to 13 on active volume
of 745 million shares on the NYSE.

Thursday's new plays (positions/prices):

CNTO  JUL45C/MAY45C  $1.75  debit  (easy entry at the target)
WLA   JUL70C/MAY70C  $2.25  debit  (priced near the open)
CSCO  OCT115C/M115C  $9.75  debit  (moved higher at the close)

Portfolio plays:

It started slow but turned out to be a great week for the spreads
section. The big star was last Sunday's earnings play on CNXT.
Both of the spreads were closed midweek for excellent profits as
the stock vaulted into the $40 range. The next over-achiever was
WMT. After a short period of post-split profit-taking, the stock
rebounded to a high of almost $52, allowing us a favorable early
exit on the pre-split debit spread. DELL has made a nice recovery
but our irrational exuberance earlier in the month had placed us
in such a poor starting position that we are just now back where
we began. We have decided to exit both the credit and debit plays
at break-even and try to pick a new entry point for the possible
run to earnings. During the week, short positions were opened on
our remaining long-term calendar spreads (EMC, MER, SEPR & SUNW)
and some of the volatility positions were also sold or adjusted.

There are some plays that we are watching closely for signs of
technical failure (AMAT, DRIV and WCII) but the only spread that
we closed for downside protection was our PTEK speculation play.
The closing credit was about $0.18 less than the initial debit
even though the stock has fallen about 15%, demonstrating the
advantage that "selling disparity" can provide when you enter
these plays. Our education specialist (Chris) will be discussing
option pricing and premium disparity during the coming weeks in
his "Options 101" section of Sunday's newsletter. Don't miss it!

Send Spread & Combo questions to ray@OptionInvestor.com

Good Luck!
******************************************************************
				- NEW PLAYS -
******************************************************************
COMS - 3Com Corp  $25.81     *** Rumors Are Flying! ***

3Com, the company that provides "computers, communications, and
connectivity" is the world's #2 maker of computer networking
products. 3Com has three operating units: one division focuses
on home networking, wireless, and broadband products; another
makes network control & linking devices and network management
software. Another group designs communications technologies for
public carriers and Internet service providers. Palm Computing
makes the company's market leading electronic organizer.

3Com's shares shot up last week amid rekindled rumors that the
struggling firm might sell all or part of its business. Rumors
suggest that Ericsson, Siemens, or another company may buy 3Com
and some analysts say that selling COMS to them makes strategic
sense.

The rumors are nothing new and one expert said she believes the
speculation was based on both Siemens' and Ericsson's recently
announcing earnings numbers. She added that 3Com is engaged in
a reorganization process right now and that takeover speculation
usually begins when companies have hit hard times. She also said
that she was not calling 3Com a likely takeover target.

The implied volatility in 3Com options spiked up on Friday and
changes like this signal the expectations of a possible event.
The rumors have been around for about a year and one trader said
that over the last five Fridays, traders have endured the same
speculation, and increasing volatilities simply deflated after
none of the talk proved accurate.

The problem is, a strategy like this can backfire if the merger
occurs too soon. We will try to increase the probability of
success by taking a long-term position in this volatility play.

PLAY (aggressive/calendar spread):

BUY  CALL OCT-25 THQ-JE OI=2002 A=$5.50
SELL CALL MAY-25 THQ-EE OI=7690 B=$2.62
INITIAL NET DEBIT TARGET=$2.62 TARGET ROI=100%

Time spreads involve the sale of one option and the purchase
of a more distant option, both with the same strike price. The
basic strategy implies a NEUTRAL philosophy based on the fact
that TIME will erode the value of the near-term option at a
faster rate than it will the far-term option. Each month, after
the previous short position expires (or is repurchased) we will
sell a new position to reduce the cost-basis of our long term
option.

Chart = http://quote.yahoo.com/q?s=COMS&d=3m
******************************************************************
MTZ - MasTec  $24.50     *** Technicals Only ***

MasTec is one of the world's largest contractors to telephone
and cable companies. From splicing cable and digging ditches to
erecting telephone poles and radio towers, MasTec is busy working
for its customers, among them Bell South and Telefonica de Espana.

MTZ recently announced that their External and Internal Network
Service lines have received $65 million in new contracts within
the last 30 days. The scope of work includes cable television
upgrades, voice and data network installations, power and gas
distribution networks, telecommunications infrastructure and
intelligent transportation systems.

Even as they announced this news, a previous contract was still
causing controversy because few people involved in the deal are
stepping forward to answer questions about it. A report from the
goverment in Nicaragua is questioning why a $100 million contract
was granted to an affiliate of MasTec when it replaced an earlier
contract for far less money. The MasTec contract is becoming an
issue in what appears to be a political fight between President
Arnoldo Aleman and the controller, Agustin Jarquin. Nicaraguan
newspapers also are raising questions about the no-bid contract
because MasTec and its top executives have been supporters of
Aleman and some helped raise money for his presidential campaign.

Earnings will be out April 28, adding to the current speculation
(and option volatility), but we think this stock is trading in a
fairly stable range between the sold option positions.

PLAY (aggressive/credit strangle):

SELL CALL MAY-30 MTZ-EF OI=88 B=$0.81
SELL PUT  MAY-20 MTZ-QD OI=5  B=$0.81
INITIAL NET CREDIT TARGET=$1.75 ROI=25%

Chart = http://quote.yahoo.com/q?s=MTZ&d=3m
******************************************************************
ACAI - Atlantic Coast Airlines $28.43    *** Technicals Only ***

Atlantic Coast Airlines operates as part of United Express under
an agreement with United Airlines. The regional carrier has its
hub at Washington-Dulles International Airport. Its fleet of six
regional jets and 61 turboprop aircraft provides service to about
45 cities in 19 eastern US states. The United Express agreement
gives passengers easy inter-airline connections and check-in plus
frequent-flyer membership privileges on United Airlines. ACAI has
a similar partnership with Lufthansa German Airlines.

Atlantic Coast Airlines recently approved a plan to repurchase
up to 5% of its current outstanding shares in the open market
over the next 12 months. This announcement came after the company
reported first quarter profits of $0.18, compared to $0.16 for
the same period in 1998. Wall Street had expected the company to
report profits of $0.17 a share. In doing so, ACAI kept pace with
rival airlines that also surpassed analysts' expectations.

With the earnings period winding down and the fare wars receding,
we think this stock has an excellent probability of remaining
within the sold strike range. We consider this a conservative
position.

PLAY (conservative/credit strangle):

SELL CALL MAY-35.00 QKA-EG OI=71 B=$0.50
SELL PUT  MAY-22.50 QKA=QX OI=10 B=$0.38
INITIAL NET CREDIT TARGET=$1.00 ROI=15%

Chart = http://quote.yahoo.com/q?s=ACAI&d=3m
******************************************************************
UMG - MediaOne Group  $77.38     *** Takeover Play? ***

MediaOne Group is the US's #3 cable operator providing service to
two million customers abroad with interest in wireless operations
in Eastern Europe, Malaysia, Russia, and the UK. The company is
expanding its networks with broadband cable to provide integrated
high-speed Internet access, cable TV, and telephony services.

MediaOne Group, formerly part of US WEST, agreed to be bought by
fellow cable operator Comcast, but then received a rival offer
from AT&T. The offer was a surprise and AT&T is making a big bet
on cable broadband with the unsolicited $58 billion bid to seize
UMG from the acquiring clutches of fellow cable giant Comcast.

The merger would re-establish the end-to-end scope of the old
Bell monopoly and add high-speed Internet and digital video to
AT&T's domain as the top national competitor in the residential
market to the consolidating Bells. The bid would expand AT&T's
newly asserted leadership of the U.S. cable industry and give
the carrier a stake in the 'RoadRunner' cable modem operation.

It's not clear whether Comcast, the 4th largest cable operator,
will up the ante and they may not even have the cash to wage a
bidding war. The AT&T offer would reimburse UMG shareholders
for any AT&T stock price drop up to 10%.

Other activity is also in the melee as One2One, Britain's 4th
largest mobile phone company, (a UMG joint venture) is being
sold. Lehman Brothers is looking for a buyer, and Mannesmann AG
(which runs Germany's D2 mobile phone network), has expressed
an interest in One2One.

The options are priced fairly and we think this merger-mania
will take months to resolve with an eventual buyer paying much
more than they should for the actual purchase. This is a very
favorable speculation play based on pricing & probability.

PLAY (speculative/debit straddle):

BUY CALL JUL-75 UMG-GO OI=57  A=$7.00
BUY PUT  JUL-75 UMG-SO OI=270 B=$3.38
INITIAL NET TARGET=$10.00 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=UMG&d=3m
******************************************************************
RHI - Robert Half International  $25.43     *** Big Mover! ***

RHI is one of the world's largest accounting & finance personnel
providers. The company, which has become a long-term presence by
providing short-term workers, places temporary & permanent staff
through various companies; Accountemps, OfficeTeam, Affiliates
and RHI Consulting. Robert Half operates more than 200 offices
in Europe and North America. It markets through telephone, print
and radio advertising, and joint arrangements with such firms as
Microsoft.

RHI recently reported record revenues and earnings for the first
quarter despite tight labor supply conditions in many skilled job
categories. They reported excellent internal revenue growth and
a favorable balance sheet & strong cash flow. They also created
a new division, The Creative Group(SM), which provides project
staffing in the advertising, marketing and Web design fields.

After such positive earnings, the company was still downgraded by
CSFB, Dain Rauscher and Merrill Lynch. The stock price fell $10!
Then DLJ upgraded the stock based on the new low share price. We
think this stock will easily rebound back into the mid-30's by
mid-summer and option prices are favorable for a debit straddle
position.

PLAY (conservative/debit straddle):

BUY  CALL SEP-25 RHI-IE OI=27  A=$4.00
BUY  PUT  SEP-25 RHI-UE OI=110 A=$3.12
INITIAL NET DEBIT TARGET=$6.87 TARGET ROI=50%

Chart = http://quote.yahoo.com/q?s=RHI&d=3m
******************************************************************
QCOM - QUALCOMM  $190.87     *** Disparity Play ***

QCOM's multiple access (CDMA) technology is an industry standard
for mobile communications that is used in cellular & wireless
telephone system equipment, and satellite ground stations. Its
OmniTRACS global positioning system is used by the truckers to
monitor their progress. In a joint venture with Loral Space and
Communications, QUALCOMM is developing the Globalstar system of
low-orbiting satellites, which will offer telecommunications
services around the world.

The stock of QCOM soared $50 after they posted record earnings
last week. Earnings were $65 million, triple the $18.6 million
from a year earlier and revenues rose to $932 million. Analysts
said the figures reflected stellar performance all around, and
indicated the company was poised for even faster growth than
previously expected. The earnings numbers prompted Wall Street
firms to raise their ratings on the company.

We cover this company extensively because they are the future
of cellular telecommunications on this planet. A small disparity
exists in the deep OTM puts and we can earn a favorable return
if the prices are still available on Monday morning. Lets hope
the market-makers don't read the OIN...

PLAY (conservative/credit spread):

BUY  PUT MAY-150 AAW-QJ OI=561 A=$3.50
SELL PUT MAY-155 AAW-QK OI=108 B=$4.00
INITIAL NET CREDIT TARGET=$0.50 ROI=11%

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


*****************************************************
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This newsletter is a publication dedicated to the education 
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only. The information provided herein is not to be construed 
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newsletter picks are not to be considered a recommendation 
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delivery times due to factors beyond our control.




The Option Investor Newsletter            4-25-99
Sunday                6  of  6

*********************
COVERED CALL SECTION
*********************
Our Approach To Covered-Calls

This week, we are going to review the educational series on basic
covered-call techniques. The first step is to explain our current
approach and the appropriate method for using this much maligned
strategy to earn consistent and favorable returns.

The objective of covered writing for most investors is increased
income though stock ownership. By definition, the ideal covered
call offers reduced risk and a good probability of making a profit.
In fact, our primary goal is to provide the subscriber with plays
that produce acceptable returns while still receiving an above
average amount of protection regardless of the overall market
character.

A mathematical basis...

The main factor that we focus on is called "return unchanged".
This is the return on investment that one would achieve if the
stock price were unchanged at option expiration. One can compare
potential plays more accurately using this approach since no
assumption is made about stock price movement. This method ignores
the relative price of the sold strike (ITM - OTM) and focuses
completely on the outcome of the overall position.

A very simple concept...

With this conservative option writing strategy in mind, we look
for plays that return a minimum of 3%-5% per month and retain
downside protection of at least 10% (of the current stock price).
The overall position that is constructed using these guidelines
will be a relatively low risk play (regardless of the volatility
of the underlying stock) since the levels of protection will be
large and there is still the expectation of a reasonable return.

Other things to consider...

The amount of downside protection and the return on investment are
both very important considerations in determining which play to
choose but the technical and fundamental outlook of the underlying
stock must also be favorable. Our research will generally uncover
those positions which have unattractive ratios or poor expectations
for future growth.

The reason for ITM plays...

A minimally acceptable return is somewhat a matter of personal
preference but with the current market volatility, it would appear
that the advantages of the in-the-money position (more consistent
profits and reduced risk),  is more attractive to the majority of 
our investors.

Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (4 weeks to May expiration)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt     Profit   ROI    Monthly
Sym    Picked Price        Price   Bid     /Loss           ROI

AND     7.75   8.75   May   7.50  1.25  *$    1.00  15.4%  11.1%
PILL   19.00  16.88   May  15.00  5.50  *$    1.50  11.1%   9.7%
MI     18.38  16.75   May  12.50  7.00  *$    1.12   9.8%   8.6%
QGLY    5.13   5.06   May   5.00  0.63  *$    0.50  11.1%   8.0%
DBCC   17.75  17.44   May  15.00  4.00  *$    1.25   9.1%   7.9%
GSTX   11.06  12.69   May  10.00  2.13  *$    1.07  12.0%   7.4%
PILL   16.88  16.88   May  15.00  3.25  *$    1.37  10.1%   7.3%
HYPT   12.50  12.88   May  10.00  3.38  *$    0.88   9.6%   7.0%
OMKT   15.00  13.75   May  12.50  3.38  *$    0.88   7.6%   6.6%
NAVR   15.88  14.38   May  12.50  4.25  *$    0.87   7.5%   6.5%
LBFC   10.69  11.25   May  10.00  1.50  *$    0.81   8.8%   6.4%
KLOC   13.75  13.81   May  10.00  4.75  *$    1.00  11.1%   6.0%
ARTT   13.00  13.13   May  10.00  3.75  *$    0.75   8.1%   5.9%
HDL    13.88  13.94   May  12.50  2.31  *$    0.93   8.0%   5.8%
EXCA   14.25  16.25   May  12.50  2.75  *$    1.00   8.7%   5.4%
OMKT   16.13  13.75   May  12.50  4.50  *$    0.87   7.5%   5.4%
EGGS   17.63  15.19   May  15.00  3.63  *$    1.00   7.1%   5.2%
ETV     7.56   6.81   May   7.50  1.13   $    0.38   5.9%   5.1%
GCTI   17.00  17.25   May  12.50  5.13  *$    0.63   5.3%   4.6%
BNYN   15.88  15.00   May  12.50  4.00  *$    0.62   5.2%   4.5%
FIBR * 25.13   6.88   May  20.00  7.00   $  -11.25 -62.1%   0.0%

 * NOTE: Osicom Tech "appears" to have mislead investors about
         some overseas contracts and the stock price evaporated.
         You may consider any technical bounce as an opportunity
         to exit the play & check into one of the many lawsuits.

-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

CELG   19.31  May 17.50  LQH EW  2.81  281   16.50   6.06%   6.06%
CENT   15.13  May 12.50  EQH EV  3.13  148   12.00   4.17%   4.17%
CYCH   18.19  May 15.00  KBQ EC  4.13  375   14.06   6.69%   6.69%
GSTX   12.69  May 12.50  QGS EV  1.38  420   11.31  10.52%  10.52%
HDL    14.06  May 12.50  HDL EV  2.13  129   11.93   4.78%   4.78%
IDTC   30.44  May 22.50  IQJ EX  9.00  371   21.44   4.94%   4.94%
OMKT   13.75  May 12.50  OQM EV  2.19  1438  11.56   8.13%   8.13%
SATH   11.81  May 10.00  SQR EB  2.63  753    9.18   8.93%   8.93%
TWMC   14.38  May 12.50  TQT EV  2.75  277   11.63   7.48%   7.48%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

GSTX   12.69  May 12.50  QGS EV  1.38  420   11.31  10.52%  10.52%
SATH   11.81  May 10.00  SQR EB  2.63  753    9.18   8.93%   8.93%
OMKT   13.75  May 12.50  OQM EV  2.19  1438  11.56   8.13%   8.13%
TWMC   14.38  May 12.50  TQT EV  2.75  277   11.63   7.48%   7.48%
CYCH   18.19  May 15.00  KBQ EC  4.13  375   14.06   6.69%   6.69%
CELG   19.31  May 17.50  LQH EW  2.81  281   16.50   6.06%   6.06%
IDTC   30.44  May 22.50  IQJ EX  9.00  371   21.44   4.94%   4.94%
HDL    14.06  May 12.50  HDL EV  2.13  129   11.93   4.78%   4.78%
CENT   15.13  May 12.50  EQH EV  3.13  148   12.00   4.17%   4.17%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

         *** SAME AS ABOVE, ALL PLAYS IN-THE-MONEY ***

******************************************************************
Company Descriptions
******************************************************************
CELG - Celgene Corp.  $19.31  *** Drug Research ***

Celgene is a specialty company engaged in the development and
commercialization of human pharmaceuticals and agrochemicals.
CELG has been researching Thalidomide for use in fighting Crohn's
disease and recently received orphan drug designation from the 
FDA which gives the company exclusive marketing rights in the U.S.
for seven years if it is approved for this use. Celgene has been
climbing nicely after consolidating, reaching a new high on Friday.
Though earnings are due around May 7 (earnings run?), January's 
high now provides technical support above our cost basis.

May 17.50 LQH-EW Bid=2.81 OI=281 CB=16.50 RC=6.06% RNC=6.06% 

Chart = http://quote.yahoo.com/q?s=CELG&d=3m
******************************************************************
CENT - Central Garden & Pet Co.  $15.13  *** Stage I Base ***

CENT is a national distributor of lawn and garden and pet supply 
products. CENT also offers a broadening array of proprietary 
branded lawn and garden and pet supply products, including Four 
Paws(R), Zodiac(R), Kaytee(R), Nylabone(R) and Grant's(R). No, 
Central Garden isn't splitting 2 for 1 (Yahoo ticker mistake). 
CENT has been in a stage I base for about 8 months, creating a 
strong support level above $13. Recently increased their stock
buy-back program. Earnings are due around the first week in May.

May 12.50 EQH-EV Bid=3.13 OI=148 CB=12.00 RC=4.17% RNC=4.17% 

Chart = http://quote.yahoo.com/q?s=CENT&d=3m
******************************************************************
CYCH - CyberCash  $18.19     *** Internet Commerce ***

CyberCash's products help consumers make online purchases. They
offer secure payment transaction services including electronic
cash payment and billing). The company's ICVerify subsidiary
provides retailers with point-of-sale credit card authorization
software. Another stock exiting a consolidation phase to the top
side (on news of a partnership with Informix Corporation). Well
positioned in one of the core industries on the Internet.

May 15.00 KBQ-EC Bid=4.13 OI=375 CB=14.06 RC=6.69% RNC=6.69% 

Chart = http://quote.yahoo.com/q?s=CYCH&d=3m
******************************************************************
GSTX - GST Telecommunications  $12.69  *** 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. With the telecom sector still
hot, GSTX's recent consolidation (after an upgrade boost), offers
another conservative entry point. Earnings may be out on Friday.

May 12.50 QGS-EV Bid=1.38 OI=420 CB=11.31 RC=10.52 RNC=10.52% 

Chart = http://quote.yahoo.com/q?s=GSTX&d=3m
******************************************************************
HDL - Handleman Company $14.06  *** 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 Treehouse TV and Hasbro to produce
"It's itsy bitsy Time", a new block of preschool television airing
four times daily in Canada starting in September. A bullish chart
that just made a new all-time high.

May 12.50 HDL-EV Bid=2.13 OI=129 CB=11.93 RC=4.78% RNC=4.78% 

Chart = http://quote.yahoo.com/q?s=HDL&d=3m
******************************************************************
IDTC - IDT Corporation  $30.44  *** IPO speculation? ***

IDT Corporation is a telecommunications company which offers a 
broad range of integrated long-distance telephone and Internet 
access services. The speculation on the Net2Phone IPO has caused
IDT Corp to rally sharply. A recent bond buy back could be IDTC
gearing up for the offering, with coverage being initiated at
the beginning of April. With all the news on alliances and NET2-
Phone connections, speculation is driving up the premiums which
can be used to our advantage in this conservative, deep ITM play.

May 22.50 IQJ-EX Bid=9.00 OI=371 CB=21.44 RC=4.94% RNC=4.94% 

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
******************************************************************
OMKT - Open Market, Inc. $13.75  *** Web Auction Market ***

OMKT develops, markets, licenses and supports enterprise-class,
packaged application software products and professional services
enabling its customers to engage in Internet commerce, info 
commerce and publishing. Open Market announced a partnership with
OpenSite Technologies Inc., a leader in online auction software.
Looks like an Internet auction site showdown is in the future.
The tape, showing great strength, has OMKT poised to move higher
with a strong support area near our strike price. OMKT beat the
estimates on Thursday by $0.05 but there could be a post earnings
dip. Overall, the chart momentum is positive.

May 12.50 OQM-EV Bid=2.19 OI=1438 CB=11.56 RC=8.13% RNC=8.13% 

Chart = http://quote.yahoo.com/q?s=OMKT&d=3m
******************************************************************
SATH - Shop At Home, Inc.  $11.81  *** New Up leg? ***

SATH sells and distributes consumer products through interactive 
retail sales programs transmitted via satellite to cable TV,
TV stations and dish receivers nationwide. After a quick spike 
in price (anticipating its Internet related news back in Feb.),
and then disappointment, Shop at Home has been consolidating 
near $10. The uptrend over the last few days may be anticipation
of earnings due 4/27. Buying pressure has remained firm since the
mid February sell-off and some short term buy signals are evident.

May 10.00 SQR-EB Bid=2.63 OI=753 CB=9.18 RC=8.93% RNC=8.93% 

Chart = http://quote.yahoo.com/q?s=SATH&d=3m
******************************************************************
TWMC - Trans World Entertainment $14.38

TWMC is a specialty retailer of compact discs, prerecorded audio
cassettes, prerecorded videocassettes and related accessories. 
As of 1/98, TWMC operated 539 stores in 34 states, the District of
Columbia and the Virgin Islands. In February, TransWorld's shares
jumped in price on a better than expected earnings report. Its 
recently launched Internet site is expected to boost revenues and
share holders just approved the Camelot merger. Whether TWMC can
keep improving revenues in a competitive market remains to be seen.
We like the short term bullish chart with support near our cost
basis.

May 12.50 TQT-EV Bid=2.75 OI=277 CB=11.63 RC=7.48% RNC=7.48% 

Chart = http://quote.yahoo.com/q?s=TWMC&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
BDT     3.94 May   5.00  BDTEA  0.75 19.05  230  307
IMG    11.00 May  12.50  IMGEV  1.56 14.20  551   65
DBCC   17.44 May  17.50  BQDEW  2.44 13.98  321 2236
PCMS    5.00 May   5.00  PQPEA  0.69 13.75   32 1732
PILL   16.88 May  17.50  PQQEW  2.31 13.70  296 1284
BNYN   15.00 May  15.00  QYNEC  2.00 13.33  195  739
XCED   19.75 May  20.00  XCUED  2.56 12.97   22  239
ZONA   22.00 May  22.50  NQZEX  2.81 12.78    7  104
GOAL   12.38 May  12.50  NDQEV  1.56 12.63  124  175
CYOE    7.00 May   7.50  QTOEU  0.88 12.50   97  577
HPH     9.56 May  10.00  HPHEB  1.19 12.42  120 1873
BFR    22.63 May  30.00  BFREF  2.75 12.15   60  220
DCTM   17.00 May  17.50  QDCEW  2.06 12.13  401  475
FBG    17.00 May  17.50  FBGEW  2.00 11.76   77  270
VLNC    7.44 May   7.50  VHQEU  0.88 11.76   31  324
UNA    14.00 May  15.00  UNAEC  1.63 11.61    4   25
SKYT   17.25 May  17.50  MMQEW  2.00 11.59  629 1884
EPTO    4.88 May   5.00  QTPEA  0.56 11.54   45  193
FFD    11.94 May  12.50  FFDEV  1.38 11.52  120  894
SAVLY  13.06 May  15.00  QVYEC  1.50 11.48  383 1181
ERTH    9.38 May  10.00  QEREB  1.06 11.33   25 1853
FVCX    4.44 May   5.00  FXQEA  0.50 11.27   35  226
KOSP    5.00 May   5.00  KQWEA  0.56 11.25   20   61
FORE   24.50 May  25.00  FQOEE  2.75 11.22 1406 8722
BTIM   11.25 May  12.50  QBOEV  1.25 11.11   12   91
MTZ    24.50 May  25.00  MTZEE  2.69 10.97   83  845
CYMI   20.00 May  20.00  CQGED  2.19 10.94   41  487
CMTO   29.94 May  30.00  CQHEF  3.25 10.86   28  261
ALN     7.50 May   7.50  ALNEU  0.81 10.83   40   25
MCHM   10.50 May  12.50   QQEV  1.13 10.71  394 1080
ODIS    4.13 May   5.00  QSEEA  0.44 10.61   65  204
SCIO    8.38 May  10.00  JQSEB  0.88 10.45  260 1506
Z       9.75 May  10.00    ZEB  1.00 10.26  205 1055
CYTC   18.38 May  20.00  YQKED  1.88 10.20    5  272
HS      3.69 May   5.00   HSEA  0.38 10.17  299 4002
GCTI   17.25 May  17.50  QHFEW  1.75 10.14   12  540
PTEK   14.81 May  15.00  TQOEC  1.50 10.13  363 3729
POSS    9.88 May  10.00  UPQEB  1.00 10.13   10  216
HLYW   22.25 May  22.50  HWQEX  2.25 10.11   20   65
AXNT    9.94 May  10.00  XQEEB  1.00 10.06   73  216
ONSL   27.38 May  30.00  QOLEF  2.75 10.05  546  948
AND     8.75 May  10.00  ANDEB  0.88 10.00   73 1361
CYCH   18.13 May  20.00  KBQED  1.81 10.00  261  887
MCOM    7.50 May   7.50  MQMEU  0.75 10.00   20  320
VLNC    7.44 Jun   7.50  VHQFU  1.50 20.17  209 1147
HPH     9.56 Jun  10.00  HPHFB  1.88 19.61   15  107
FBG    17.00 Jun  17.50  FBGFW  3.25 19.12   70   50
VTEL    4.59 Jun   5.00  VQEFA  0.88 19.05   34  855
XCED   19.75 Jun  20.00  XCUFD  3.75 18.99   12   42
PCMS    5.00 Jun   5.00  PQPFA  0.94 18.75   23   75
BNYN   15.00 Jun  15.00  QYNFC  2.81 18.75    8   64
TWMC   14.38 Jun  15.00  TQTFC  2.69 18.70  251  527
ERTH    9.38 Jun  10.00  QERFB  1.75 18.67  100  301
AND     8.75 Jun  10.00  ANDFB  1.63 18.57   35  575
PILL   16.88 Jun  17.50  PQQFW  3.13 18.52   15   20
DANB   22.38 Jun  25.00  QUBFE  4.00 17.88    2  205
PRIA   28.88 Jun  30.00  UXQFF  5.13 17.75    1   72
MCHM   10.50 Jun  12.50   QQFV  1.81 17.26   53  805
DBCC   17.44 Jun  17.50  BQDFW  3.00 17.20   36  941
ABTE    7.31 Jun   7.50  QZBFU  1.25 17.09 1967 3151
HS      3.69 Jun   5.00   HSFA  0.63 16.95  167   28
SEV     4.44 Jun   5.00  SEVFA  0.75 16.90   20  501
PTEK   14.81 Jun  15.00  TQOFC  2.50 16.88   20  153
SAVLY  13.06 Jun  15.00  QVYFC  2.19 16.75   67    5
CYCH   18.13 Jun  20.00  KBQFD  3.00 16.55   20  551
ASDV    9.94 Jun  10.00  QDVFB  1.63 16.35   75  744
VTEL    4.59 Jun   7.50  VQEFU  0.75 16.33   91  853
DIMD    5.00 Jun   5.00  DAQFA  0.81 16.25   15   30
BDT     3.94 Jun   5.00  BDTFA  0.63 15.87  120   60
GEMS    3.94 Jun   5.00  GQMFA  0.63 15.87   14  637
FFD    11.94 Jun  12.50  FFDFV  1.88 15.71   70 1342
DJT     4.44 Jun   5.00  DJTFA  0.69 15.49  129  367
SKYT   17.25 Jun  17.50  MMQFW  2.63 15.22  701 1911
TKLC    9.13 Jun  10.00   KQFB  1.38 15.07   15   22
ONSL   27.38 Jun  30.00  QOLFF  4.13 15.07  127 1728
ESPI   13.31 Jun  15.00   AQFC  2.00 15.02  110  942
PRTL   15.50 Jun  17.50  PQWFW  2.31 14.92  200  112
FORE   24.50 Jun  25.00  FQOFE  3.63 14.80  414  260
OMKT   13.75 Jun  15.00  OQMFC  2.00 14.55   85  132
EDFY    7.75 Jun  10.00   YQFB  1.13 14.52   80  195
HPH     9.56 Jun  12.50  HPHFV  1.38 14.38   60   20
NBTY    4.86 Jun   5.00  NBQFA  0.69 14.15   10  911
Z       9.75 Jun  10.00    ZFB  1.38 14.10  235  141
ARTT   13.13 Jun  15.00  AOQFC  1.81 13.81   22   50
PTVL   22.70 Jun  25.00  QUTFE  3.13 13.76   33  124
CRUS    7.34 Jun   7.50  CUQFU  1.00 13.62   25  336
BEAM   15.75 Jun  17.50  BAQFW  2.13 13.49  357  585
HLYW   22.25 Jun  22.50  HWQFX  3.00 13.48   10    5
AVID   14.00 Jun  15.00  AQIFC  1.88 13.39   23   50
HEB     8.88 Jun  10.00  HEBFB  1.19 13.38   60  600
ELIX   14.50 Jun  15.00  XQQFC  1.94 13.36   11   10
HLX     6.56 Jun   7.50  HLXFU  0.88 13.33  100  245
AAIR    4.69 Jun   5.00  VJQFA  0.63 13.33    5  922
FBG    17.00 Jun  20.00  FBGFD  2.25 13.24   60   39
GHV     6.63 Jun   7.50  GHVFU  0.88 13.21   20  244
SPYG   15.38 Jun  17.50  YQGFW  2.00 13.01  100   88
DBCC   17.44 Jun  20.00  BQDFD  2.25 12.90  145 1678
PRGN   23.56 Jun  25.00  GQPFE  3.00 12.73   34   56
SCIO    8.38 Jun  10.00  JQSFB  1.06 12.69   10   16
CLST    6.41 Jun   7.50  EQLFU  0.81 12.68  730  285
SFSK    9.44 Jun  10.00  FQKFB  1.19 12.58   25   67
IMG    11.00 Jun  15.00  IMGFC  1.38 12.50  225   21
SKYC   13.50 Jun  15.00  KQFFC  1.69 12.50   50   42
SPOT   30.00 Jun  30.00  OQOFF  3.75 12.50   20   10
ICGX   24.00 Jun  25.00  QIGFE  3.00 12.50   32 1460
USWB   27.25 Jun  30.00  QWBFF  3.38 12.39   20  141
KNT     9.13 Jun  10.00  KNTFB  1.13 12.33    1   20
GSTRF  19.97 Jun  20.00  YVQFD  2.44 12.21   65 3564
IMRS   19.00 Jun  20.00  QIQFD  2.31 12.17    3   55
MMWW   14.94 Jun  15.00  EQBFC  1.81 12.13   40  124
CFN     6.19 Jun   7.50  CFNFU  0.75 12.12   30  665
VVUS    4.13 Jun   5.00  VVQFA  0.50 12.12  150 3109
GADZ    9.31 Jun  10.00  EQKFB  1.13 12.08   50  208
ZAP     9.31 Jun  10.00  ZAPFB  1.13 12.08   36   66
FGCI    6.25 Jun   7.50  JZQFU  0.75 12.00   10  118
ATML   19.94 Jun  20.00  AQTFD  2.38 11.91   40  140
WMS    10.00 Jun  10.00  WMSFB  1.19 11.88   20   17
PESC   16.88 Jun  17.50  UVQFW  2.00 11.85    5   71
MXG     8.50 Jun  10.00  MXGFB  1.00 11.76    3   97
XTO     9.56 Jun  10.00  XTOFB  1.13 11.76   10    8
CYCH   18.13 Jun  22.50  KBQFX  2.13 11.72   16 1286
COB     7.50 Jun   7.50  COBFU  0.88 11.67   57  895
BNYN   15.00 Jun  17.50  QYNFW  1.75 11.67   15   52
SUPG   12.50 Jun  12.50  UQGFV  1.44 11.50   10   25
FLC     9.25 Jun  10.00  FLCFB  1.06 11.49   29 4598
IHS     5.50 Jun   7.50  IHSFU  0.63 11.36   14  186
AHG    14.88 Jun  15.00  AHGFC  1.69 11.34   20 1037
GSTX   12.69 Jun  15.00  QGSFC  1.44 11.33  190  444
PRXL   18.81 Jun  20.00  VBQFD  2.13 11.30    2   64
AGTX    6.69 Jun   7.50  QDXFU  0.75 11.21   10  152
EGGS   15.19 Jun  17.50  EGQFW  1.69 11.11   96  902
SYKE   25.00 Jun  25.00  YKQFE  2.75 11.00   15  152
CYMI   20.00 Jun  22.50  CQGFX  2.19 10.94  209  192
TWMC   14.38 Jun  17.50  TQTFW  1.56 10.87   40   47
CYGN    8.63 Jun  10.00  YNQFB  0.94 10.87    8  227
CNDS    7.00 Jun   7.50  KQNFU  0.75 10.71   90  419
RPC    19.88 Jun  20.00  RPCFD  2.13 10.69   10   30
FOSL   29.44 Jun  30.00  QFSFF  3.13 10.62    1   38
PETC   12.38 Jun  12.50  QPTFV  1.31 10.61    5  115
UAG     9.44 Jun  10.00  UAGFB  1.00 10.60   10   16
DLGC   28.38 Jun  30.00  DQLFF  3.00 10.57   10   79
RSND    4.75 Jun   7.50  RQDFU  0.50 10.53    2   82
CATP   13.81 Jun  15.00  TQPFC  1.44 10.41   14  836
IDC     4.81 Jun   5.00  IDCFA  0.50 10.39   35 4907
ENER    9.06 Jun  10.00  EQIFB  0.94 10.34   10  734
ESPI   13.31 Jun  17.50   AQFW  1.38 10.33    5  364
MAG    11.50 Jun  12.50  MAGFV  1.19 10.33   50  320
GERN    9.69 Jun  10.00  GQDFB  1.00 10.32   20 1595
AMKR    9.69 Jun  10.00  QELFB  1.00 10.32    5 2866
HDL    13.94 Jun  15.00  HDLFC  1.44 10.31   10  790
ASYT   18.81 Jun  20.00  QQYFD  1.94 10.30   15  181
ITCD   29.44 Jun  30.00  QIJFF  3.00 10.19    5    5
OO      7.38 Jun   7.50   OOFU  0.75 10.17   40   80
SKYT   17.25 Jun  20.00  MMQFD  1.75 10.14  282 1881
PTEK   14.81 Jun  17.50  TQOFW  1.50 10.13   45  620
MCHM   10.50 Jun  15.00   QQFC  1.06 10.12   67 1469
GLBL   11.13 Jun  12.50  GQOFV  1.13 10.11   25  466
ENMD   27.44 Jun  30.00  QMAFF  2.75 10.02   40    2
ENZ    10.00 Jun  10.00  ENZFB  1.00 10.00    5   10
WAXS   11.25 Jun  12.50  WXQFV  1.13 10.00   16   23
BDT     3.94 Jul   5.00  BDTGA  0.94 23.81   10  612
ERTH    9.38 Jul  10.00  QERGB  2.13 22.67   10  514
DIMD    5.00 Jul   5.00  DAQGA  1.13 22.50  256  745
BNYN   15.00 Jul  15.00  QYNGC  3.38 22.50   10  596
HS      3.69 Jul   5.00   HSGA  0.75 20.34   99 2178
DCTM   17.00 Jul  17.50  QDCGW  3.38 19.85   50  166
PTVL   22.70 Jul  25.00  QUTGE  4.25 18.72   70  766
SCIO    8.38 Jul  10.00  JQSGB  1.56 18.66   25  635
USWB   27.25 Jul  30.00  QWBGF  4.75 17.43    7  493
CELG   19.31 Jul  20.00  LQHGD  3.25 16.83   20  449
MTSN    7.44 Jul   7.50  QQMGU  1.25 16.81    5  114
ESST    9.75 Jul  10.00  SEQGB  1.63 16.67   14  367
ENTU   24.06 Jul  25.00  QYEGE  3.88 16.10   19   90
RDRT    6.31 Jul   7.50  RDQGU  1.00 15.84    1  329
REL     7.50 Jul   7.50  RELGU  1.19 15.83   20  200
FORE   24.50 Jul  25.00  FQOGE  3.88 15.82   80 2102
SRCM   22.13 Jul  22.50   SQGX  3.50 15.82    3  441
SFAM   11.13 Jul  12.50  FQFGV  1.75 15.73    4   26
HNCS   21.63 Jul  22.50  NSQGX  3.38 15.61    6   72
TSEMF   7.25 Jul   7.50  TWQGU  1.13 15.52   32  123
APM     3.25 Jul   5.00  APMGA  0.50 15.38   9524076
ARQL    4.06 Jul   5.00  QETGA  0.63 15.38   50  125
SQNT    8.63 Jul  10.00  SQQGB  1.31 15.22  100  324
SDTI   19.16 Jul  20.00  QSDGD  2.88 15.01   10  202
ENZ    10.00 Jul  10.00  ENZGB  1.50 15.00    5  403
WAXS   11.25 Jul  12.50  WXQGV  1.69 15.00   23  356
SPRI    4.25 Jul   5.00  QIRGA  0.63 14.71   25   60
SPYG   15.38 Jul  17.50  YQGGW  2.25 14.63    5  492
AKLM    6.47 Jul   7.50  KKQGU  0.94 14.49   60 1200
ABTX    6.06 Jul   7.50  QXQGU  0.88 14.43   21 4124
INPR    4.00 Jul   5.00  BLQGA  0.56 14.06   25  884
HLR    14.75 Jul  15.00  HLRGC  2.06 13.98    4  830
WMS    10.00 Jul  10.00  WMSGB  1.38 13.75    5  621
SDTI   19.16 Jul  22.50  QSDGX  2.63 13.70    2  182
SRCM   22.13 Jul  25.00   SQGE  3.00 13.56   17  320
HMTT    2.81 Jul   5.00  HTQGA  0.38 13.33   20  233
ERTH    9.38 Jul  12.50  QERGV  1.25 13.33  160  318
BTGC    7.50 Jul   7.50  QTGGU  1.00 13.33  264  903
SFSK    9.44 Jul  10.00  FQKGB  1.25 13.25   13  727
FLH     9.94 Jul  10.00  FLHGB  1.31 13.21   50  782
PDE    10.00 Jul  10.00  PDEGB  1.31 13.13   38  454
MXTR    5.75 Jul   7.50  MQLGU  0.75 13.04   66  766
TIER    8.63 Jul  10.00  QTIGB  1.13 13.04   10   42
CIEN   20.88 Jul  22.50  EUQGX  2.69 12.87   25 1564
TRL    13.25 Jul  15.00  TRLGC  1.69 12.74   22  184
HNCS   21.63 Jul  25.00  NSQGE  2.75 12.72   35  234
COMS   25.81 Jul  27.50  THQGY  3.25 12.59  271 2237
ZD     17.94 Jul  20.00   ZDGD  2.25 12.54   20 1393
DCTM   17.00 Jul  20.00  QDCGD  2.13 12.50   58  104
KNT     9.13 Jul  10.00  KNTGB  1.13 12.33    6   72
TIE     7.13 Jul   7.50  TIEGU  0.88 12.28   50  182
FNF    19.50 Jul  20.00  FNFGD  2.38 12.18   20   82
RDC    14.44 Jul  15.00  RDCGC  1.75 12.12  305  838
PTVL   22.70 Jul  30.00  QUTGF  2.75 12.11    5  391
ZILA    3.63 Jul   5.00  QWCGA  0.44 12.07    5  678
MMCN   20.88 Jul  25.00  CMQGE  2.50 11.98   10   13
PDQ    11.63 Jul  12.50  PDQGV  1.38 11.83   10  410
SPYG   15.38 Jul  20.00  YQGGD  1.81 11.79    1 1062
MAVK    7.44 Jul   7.50  KQGGU  0.88 11.76   10  112
AMD    17.13 Jul  17.50  AMDGW  2.00 11.68   44 2763
SMOD   14.00 Jul  15.00  UYQGC  1.63 11.61    3  144
CS      8.19 Jul  10.00   CSGB  0.94 11.45   51 4861
MIND    4.38 Jul   5.00  QMUGA  0.50 11.43   20  204
DURA   12.13 Jul  12.50  DQRGV  1.38 11.34   13  203
CDO    26.50 Jul  30.00  CDOGF  3.00 11.32   10  101
CYBX    7.88 Jul  10.00  QAJGB  0.88 11.11    6  119
DCTM   17.00 Jul  22.50  QDCGX  1.88 11.03    8   20
DOX    27.25 Jul  30.00  DOXGF  3.00 11.01   72  653
SKYW   27.81 Jul  30.00  UWQGF  3.00 10.79    2   61
PLCM   25.50 Jul  30.00  QHDGF  2.75 10.78   20  202
MRE    24.50 Jul  25.00  MREGE  2.63 10.71    1   50
ERTH    9.38 Jul  15.00  QERGC  1.00 10.67   80  582
LOR    17.25 Jul  17.50  LORGW  1.81 10.51   24 2088
SVRN   14.44 Jul  15.00  SQVGC  1.50 10.39  105 1260
GELX   18.13 Jul  20.00  GQXGD  1.88 10.34   20  266
VSH    17.13 Jul  17.50  VSHGW  1.75 10.22   10  187
MUEI   11.06 Jul  12.50  MQUGV  1.13 10.17   17 1087
POSS    9.88 Jul  12.50  UPQGV  1.00 10.13   10  123
DIMD    5.00 Jul   7.50  DAQGU  0.50 10.00   20 1466
ODP    20.00 Jul  20.00  ODPGD  2.00 10.00    5   52



*******************************
NAKED PUT SECTION
*******************************
Stock Market Categories...

Over the last few weeks, you may have noticed more news articles
about the group of stocks known as "cyclicals". I received lots
of email requesting a definition of that term and I think it is
important for the new investor to understand the different types
of stocks in the market and the way they are classified.

The basic categories are: Blue Chip stocks, Growth stocks, Income
stocks, Cyclical stocks, Defensive stocks and Speculative stocks.

Blue Chip stocks are historically the best long-term investments.
These companies are well established, quality issues like Dupont,
General Electric, IBM, and Proctor & Gamble. They generally pay
good dividends and are considered the bellwethers of the market.

Growth stocks are those companies which have a high probability
of capital appreciation. They retain most of their earnings and
usually don't pay dividends. All of their available funds are
plowed back into the company for future expansion and acquisition
or research. These stocks are more volatile and are generally
considered speculative investments.

Income stocks are conservative issues that have yields comparable
with corporate bonds. These companies can pay competitive returns
because their products or services are superior to others in the
industry and they also have the possibility of price appreciation.

A cyclical company is one whose earnings fluctuate with changes
in a particular business or industry cycle. When the economic
conditions are favorable, the company's stock and earnings rise.
As the cycle ends, the company's revenues and stock value falls
back to its previous position.

Defensive or safety stocks are those which remain stable even in
declining markets. These stocks usually include utilities, drug
manufacturers, and consumer non-durables or food companies. They
hold their value in recessions because their products are always
in demand regardless of the economic climate.

In the past, speculative stocks were generally identified by P/E
ratios. These issues were considered aggressive when they had
price to earnings ratios in the multiples of 50 to 100. Now most
Internet stocks have P/E's well above a hundred and this long-
term fundamental indicator may no longer be as accurate a measure 
for gauging investment risk.

Another type of high risk stock is the 'new issue', now commonly
known as the IPO - Initial Public Offering. These stocks usually
have incredible volatility when they begin trading and can move
from just a few dollars up into the 100's over the course of one
day's activity. Some examples of recent blockbuster IPO"s include
MKTW - Marketwatch.com and IVIL - Ivillage Inc.
------------------------------------------------------------------
Selling naked-puts offers an attractive method of generating small
profits on portfolio collateral. A premium is received for the
obligation to buy the underlying security at a specific price. A
successful outcome is achieved if the stock remains above the sold
strike at expiration. It is also one of the best ways to achieve a
technically correct entry position for owning a stock.
                      *** WARNING!!! ***
Occasionally a company will experience catastrophic news causing
a severe drop in the stock price. This may cause a devastatingly
large loss which may wipe out all of your smaller gains. There is
one very important rule; Don't sell naked puts on stocks that you
don't want to own! It is also important that you consider using
trading STOPS on naked option positions to help limit losses when
the stock price drops. Many professional traders suggest closing
the position when the stock price falls below the sold strike or
using a buy-to-close STOP at a price that is no more than twice
the original premium from the sold option.
******************************************************************
SUMMARY OF PREVIOUS PICKS (4 weeks to strike date) 
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit    ROI    Monthly
Sym    Picked Price        Price   Bid    /Loss            ROI

CYCH   15.94  18.13   May  15.00  1.63  *$    1.63  23.1%  16.7%
ENMD   24.75  27.44   May  20.00  1.50  *$    1.50  22.6%  16.3%
PTEK   16.25  14.81   May  12.50  0.63  *$    0.63  16.2%  14.1%
PAIR    9.63  12.63   May   7.50  0.44  *$    0.44  18.6%  13.4%
PTVL   22.94  22.70   May  17.50  0.81  *$    0.81  15.0%  13.0%
XCED   18.50  19.75   May  15.00  0.56  *$    0.56  12.6%  10.9%
CYCH   18.88  18.13   May  12.50  0.50  *$    0.50  11.7%  10.2%
BNYN   17.38  15.00   May  12.50  0.56  *$    0.56  13.9%  10.0%
VRIO   62.88  65.50   May  40.00  1.56  *$    1.56  11.0%   9.6%
NETG   44.94  43.13   May  25.00  0.94  *$    0.94   9.5%   8.2%
NAV    43.56  47.81   May  35.00  0.75  *$    0.75   7.8%   6.8%
DELL   43.63  42.81   May  35.00  0.88  *$    0.88   9.1%   6.6%
DELL   38.25  42.81   May  30.00  0.63  *$    0.63   7.6%   6.6%
NMR    27.81  25.63   May  22.50  0.44  *$    0.44   7.0%   5.1%
NWAC   29.25  31.75   May  25.00  0.50  *$    0.50   6.3%   4.6%
ONSL * 37.06  27.38   May  30.00  2.25   $   -0.37  -3.7%   0.0%

 * NOTE: Onsale has broken through its support area and its 150
         dma. You "may" want to use this technical rally to close
         the position for a minimal loss. But, it could also be
         just a post-earnings drop; they missed estimates by $.01.

-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

AEIS   32.63  May 25.00  OEQ QE  0.56  364   24.44   7.90%
CDIS   29.63  May 25.00  KPQ QE  0.69  0     24.31   8.72%
CMTO   29.94  May 22.50  CQH QX  0.69  20    21.81  10.33%
CUST   34.88  May 22.50  HQU QX  1.00  245   21.50  12.54%
IDTC   30.44  May 20.00  IQJ QD  0.50  121   19.50   7.59%
IMG    11.25  May  7.50  IMG QU  0.38  100    7.12  14.45%
NSIT   27.75  May 20.00  QNT QD  0.50  126   19.50   8.26%
PAMC   33.25  May 20.00  QMC QD  0.63  9     19.37   8.65%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

IMG    11.25  May  7.50  IMG QU  0.38  100    7.12  14.45%
CUST   34.88  May 22.50  HQU QX  1.00  245   21.50  12.54%
CMTO   29.94  May 22.50  CQH QX  0.69  20    21.81  10.33%
CDIS   29.63  May 25.00  KPQ QE  0.69  0     24.31   8.72%
PAMC   33.25  May 20.00  QMC QD  0.63  9     19.37   8.65%
NSIT   27.75  May 20.00  QNT QD  0.50  126   19.50   8.26%
AEIS   32.63  May 25.00  OEQ QE  0.56  364   24.44   7.90%
IDTC   30.44  May 20.00  IQJ QD  0.50  121   19.50   7.59%
******************************************************************
Company Descriptions
******************************************************************
AEIS - Advanced Energy Industries  $32.63     *** Earnings ***

Advanced Energy makes power delivery, measurement, and control
products that transform raw electricity into a uniform current
to ensure uniform production in manufacturing processes. Their
customers include makers of semiconductors, data storage, and
other industrial processes. Applied Materials and Lam Research
are their biggest customers and about 25% of sales are outside
the US. Recently reported excellent margin and revenue growth
on a sharp increase in orders from semiconductor companies.


May  25.00  OEQ QE  Bid=0.56  OI=364  CB=24.44  ROI=7.90%

Chart = http://quote.yahoo.com/q?s=AEIS&d=3m
******************************************************************
CDIS - Cal Dive Intl. $29.63     *** Oil Sector Improving ***

Cal Dive provides contract underwater services to major oil and
gas companies in the Gulf of Mexico. They install and maintain
offshore platforms, pipelines, and production systems in shallow
and deep waters. Subsidiary Energy Resource Technology acquires
nearly depleted offshore wells, squeezes out the last drop, and
then plugs them. CDIS and flexible-pipe manufacturer Coflexip
also have a joint venture that provides oil field development.

May  25.00  KPQ QE  Bid=0.69  OI=0  CB=24.31  ROI=8.72%

Chart = http://quote.yahoo.com/q?s=CDIS&d=3m
******************************************************************
CMTO - Com21  $29.94     *** Hot Sector ***

Com21 produces modems, headends, and other equipment for cable
communications operators to provide broadband access. Com21 also
makes network management software and noise containment products.
Their ComUNITY Access system allows multiple transmission rates
to cable customers and provides high-speed Internet access and
supports videoconferencing applications. A strong demand for the
broadband access equipment created incredible quarterly earnings.

May  22.50  CQH QX  Bid=0.69 OI=20  CB=21.81  ROI=10.33%

Chart = http://quote.yahoo.com/q?s=CMTO&d=3m
******************************************************************
CUST - CustomTracks  $34.88     *** Something Internet? ***

CustomTracks (formerly Amtech) sold off its Electronic Security,
Interactive Data, and Transportation Systems groups to move into
the Internet music market. There was a delay in approval for
music content rights so CustomTracks is moving into the secure
Internet transaction market while continuing to explore Internet
music distribution. This is purely speculation on a popular but
very volatile issue.

May  22.50  HQU QX  Bid=1.00  OI=245  CB=21.50  ROI=12.54%

Chart = http://quote.yahoo.com/q?s=CUST&d=3m
******************************************************************
IDTC - IDT Corp.  $30.44     *** Telecom & Internet! ***

IDT Corporation is a telecommunications company which offers a 
broad range of integrated long-distance telephone and Internet 
access services. The speculation on the Net2Phone IPO has caused
IDT Corp to rally sharply. Recent bond buy back could be IDTC
gearing up for the offering, with coverage being initiated at
the beginning of April. With all the news on alliances and NET2-
Phone connections, speculation is driving the option premiums.

May  20.00  IQJ QD  Bid=0.50  OI=121  CB=19.50  ROI=7.59%

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
******************************************************************
IMG - Intermagnetics General  $11.25     *** Buy-out? ***

Intermagnetics General makes magnetic resonance imaging systems
used primarily by the medical industry. The MRI systems use IMG's
subsidiaries' products such as superconducting magnets, radio
frequency coils, and cryogenic refrigeration equipment. They also
sell these components to other MRI integrators and IMG owns 45%
of Alstom Intermagnetics, a European joint venture that makes
MRI magnet systems. GE is a rumored buyer of this unique company.

May  7.50  IMG QU  Bid=0.38  OI=100  CB=7.12  ROI=14.45%

Chart = http://quote.yahoo.com/q?s=IMG&d=3m
******************************************************************
NSIT - Insight Enterprises  $27.75   *** AMZN Auction Partner ***

Insight is a direct marketer that offers computer hardware and
software products to customers in Canada, Europe and the US. NSIT
targets small & midsized businesses and markets through catalogs,
direct telesales and through its Web site. Insight also provides
mail outsourcing services to manufacturers. Just selected as a
charter merchant in Amazon.com's new Web auction program. That
presence should produce guaranteed revenue for the next few years.

May  20.00  QNT QD  Bid=0.50  OI=126  CB=19.50  ROI=8.26%

Chart = http://quote.yahoo.com/q?s=NSIT&d=3m
******************************************************************
PAMC - Provident American  $33.25     *** Own This One! ***

Provident American's subsidiaries sell and underwrite medical
insurance and life insurance. PAMC has moved towards the consumer
and small-group managed care market. They use First Health's
hospital and physician network and company products are marketed
by HealthPlan Services. PAMC's managed care products are sold by
independent brokers and they have agreements with AOL and others
to offer health insurance online. New coverage with a Buy rating
and a 12-24 month target price of $75.

May  20.00  QMC QD  Bid=0.63  OI=9  CB=19.37  ROI=8.65%

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




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