Option Investor
Newsletter

Daily Newsletter, Tuesday, 04/27/1999

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The Option Investor Newsletter         Tuesday  4-27-99
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

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

Also provided as a service to The Online Investor Advantage

Published three times weekly, Sunday, Tuesday, Thursday evenings.
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
        4-27-99          High     Low     Volume   Advances Decline
DOW    10831.71 +113.12 10847.74 10719.16  893,149k  1,758   1,236
Nasdaq  2602.41 - 49.64  2677.76  2602.13 1136,400k  2,049   1,966 
S&P-100  689.36 -  0.62   695.34   685.67   Totals   3,807   3,202
S&P-500 1362.80 +  2.76  1371.67  1356.61            54.3%   45.7%
$RUT     435.16 +   .19   437.69   433.84
$TRAN   3597.46 - 13.11  3630.16  3582.67
VIX       24.19 +   .28    24.82    23.45
Put/Call Ratio      .46    
*************************************************************
 
Entry point? Is it over yet?

I will take a -49 after a +330 any time. The normal profit taking
cycle took its toll on the Nasdaq today as many techs gave back
some of the huge gains since last Mondays big drop. Many stocks
had soared since the drop, some as much as 40%. RNWK for instance
had climbed from $130 to over $200 and only gave back -13.69 today.
QCOM rose from $125 to $214 and only gave back -6.44 today. Yes,
there was some selling today but that is what we have been trying
to warn you about since Sunday. Now the real question, "is it
over?" 

The Nasdaq actually traded in a very narrow range all afternoon
and failed to break the 2600 level in three tries. Our previous
upward resistance level, 2600, is now our support level, we hope!
In my book today's sell off was rather mild and actually could
have given us a new entry point on some of the high flyers. We
will not know for sure until tomorrow but I bought the dip in
anticipation of a continued rally. I would definitely vote for
another five days of records in a row. One of the possible
drags on the Nasdaq tomorrow comes from a NYSE Internet stock.
AOL announced stellar earnings after the close but only hit the
whisper number. After several examples of blowout earnings
lately (IBM) the street is just not happy with meeting the
whisper numbers. AOL traded down -$9 in after hours. Another
example of why you should not hold over earnings.


Nasdaq Intraday Chart:

 

Another drag on the Nasdaq today was Microsoft at -$4.00.
The drop was due to news about the resumption of the 
antitrust trial just around the corner on May 10th. Another
drag for tomorrow could be the earnings release from Amazon
due out Wednesday. Internet stocks could be weak from AOL
fallout or from worry about possible Amazon problems.

The DOW did it's part and surged on ahead in spite of the 
lagging Nasdaq and OEX. The big Dow winners were the cyclicals
again along with the financials. AXP +4.44, JPM +3.31, UTX
+4.69, KO +2.31, AA +2.13, S +2.06. Believe it or not IBM
was up again +2.13 after shareholders approved the 2:1 split
and increased the dividend. The law of gravity has not been 
repealed but IBM is proving the exception to the rule.

DOW Intraday Chart:

 

Contrary to the Nasdaq the Dow continues to set new records
and after gapping up strongly at the open bounced several
times off apparently new support at 10,760 only to close
near the high of the day. It appears nothing may stop the
blue chips until they break the 11,000 level soon. We are now
up over +1500 points since March 1st, without a meaningful
pause to consolidate. By all means continue to trade this
rally, but keep looking over your shoulder at all times. 
Traders on the NYSE said the volatility was increasing 
daily and traders are becoming less comfortable in holding 
profits over night on a daily basis.

The positive news continues to be earnings results from the
S&P-500 companies. The earnings are coming in at a clip not
seen since 1997. One of the major problems in the August-
October crash last year was the drop in earnings performance
due to the global slowdown. This quarter it appears the 
global problem is rapidly disappearing and more and more
companies are reporting positive earnings surprises. This
is keeping the liquidity in the market and as long as the
positive news continues so will the rally.

The next big hurdle this week is the Employment Cost Index
on Thursday. Investors will be hesitant to make large bets
in advance of the report even though the report is expected
to be market positive. With the Dow and S&P setting new 
records the report would have to be highly negative to 
knock the legs out from under this bull.

The advance/decline line continues to be positive. Even on 
the Nasdaq today the advances nudged the decliners. On the
NYSE the margin was 17:12 and was never in doubt during the
day. Another positive sign is the up volume/down volume ratios.
Today there was almost twice as much up volume than down. 
The Russell-2000 managed to close over 435 and took out the
recent high set back in the January rally. These three
indicators, RUT, A/D and up volume all point to a continued
upward movement of the market. The Dow may falter soon as
the leaders tire and rotate out of favor but as long as these
three indicators remain positive we will continue to gain
ground.

The plays tonight all showed remarkable strength today in
the face of huge recent gains. All put in strong intraday
bottoms and failed to drop or even rallied at the close
when the Nasdaq was dropping. These are bullish factors
but we caution you that no amount of bullish factors will
matter if the overall market decides to crater on some
external factor tomorrow. Look for an entry point before
playing and expect some strong swings at the open. We could
see another drop at the open as sellers react to some unseen
need to be out of tech stocks. Wait until amateur hour is
over (10:30) and then see which direction the market is moving.

Wait for an entry point then sell too soon!

Jim Brown
Editor


*************************************************************
TRIVIA CONTEST
*************************************************************
Do you recognize these people? You should recognize 
at least two. They control your future.


 
See the answer in section two tonight.



*******************************************************
Market Posture
*******************************************************
As of Market Close - Tuesday, April 27, 1999 

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

DOW Industrials    9,750  10,000  10,832    BULLISH   4.7                 
SPX S&P 500        1,300   1,350   1,363    BULLISH   4.22        
OEX S&P 100          660     680     689    BULLISH   4.22          
RUT Russell 2000     390     420     435    BULLISH   4.22   

NDX NASD 100       2,075   2,250   2,207    Neutral   4.22         
MSH High Tech      1,000   1,100   1,075    Neutral   4.22                

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         875     920     907    Neutral   4.22                   
CWX Software         600     650     650    Neutral   4.22                   
SOX Semiconductor    375     420     386    Neutral   4.12            
NWX Networking       450     490     516    BULLISH   4.22                 
INX Internet         550     700     632    Neutral   4.22           

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          675     720     729    BULLISH   4.22                         
XBD Brokerage        400     540     476    Neutral   4.14             
IUX Insurance        625     655     654    BULLISH   4.22                 

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           900     970     926    Neutral   4.22             
DRG Drug             390     425     393    Neutral   4.22            
HCX Healthcare       780     850     795    Neutral   4.22                     
XAL Airline          170     185     182    Neutral   3.30      
OIX Oil & Gas        250     260     288    BULLISH   3.30                        



Posture Alert

Sector rotation into financial, cyclical and retail stocks enabled 
the DOW to close higher into record territory.  Our market posture 
remains unchanged from last Friday (4/23) although we want to alert
investors that some of the technology sectors are begging to top.

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

/members/marketposture


******************************************************
Market Sentiment - By Pinnacle Capital Advisors
******************************************************
Tuesday, April 27, 1999


Classic Sector Rotation 

If you don't carry a scorecard, you may miss all the recent 
action on the playing field.  Over the past couple of weeks, the
market has seen some classic sector rotation.  Last week, we saw
investors rush back into technology only to move into the
Financial, Cyclical, and Retail stocks today. 

In today's fast moving market, it is not enough to say that you 
are Bullish or Bearish.  Bullish/Bearish on What?, When and
Where?  What market? Big cap or small cap; Which industry sector
group? Technology or Financial;  If technology, which industry
sector? Hardware or Semiconductors; Finally, what is your time
frame?  For options traders this is absolutely critical since we
are holding a deteriorating asset and fighting against the clock.  

Although we may not always get it right, our goal of the 
newsletter to present a balanced viewpoint of all the factors
that can effect your investments.  This includes fundamental,
technical and sentiment analysis.  

Pinnacle uses this integrated analysis to develop our market
posture.  If you have never taken a look at the market posture
link on the website, we invite subscribers to check it out.  On
one page, we provide a snapshot of all the key sectors that make
up the market.  Then we state our short-term market posture. 
This powerful tool is designed to help investors get on the
right side of the trade.  For example, although we are Bullish
across the major indices, we are Neutral across many of the
Technology sectors.  And subscribers who have been tracking the
Market Posture benefited our early alert that money was flowing 
into the small caps.



BULLISH Signs:

Russell 2000              Advancing higher and closed 
                          ABOVE the prior high (435).

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. (5.542%)


 


 


 


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%      
Tuesday, April 27           57,139        +86.1%      *







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        1.5
Underlying Support  (645-660)     1.9        2.1

Put/Call Ratios:

CBOE Total P/C Ratio               .5         .4
CBOE Equity P/C Ratio              .3         .3  
OEX P/C Ratio                     2.0        2.1


Peak Open Interest (OEX):

Puts                              660        650
Calls                             720        720
P/C Ratio                        1.18       1.17   


Market Volatility Index (VIX):	

CBOE VIX                        23.96      24.42             

Investors Intelligence:

Bullish                         56.4%      56.4%  *
Bearish                         30.8%      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        3.7  
                    (680-685)      1.3        1.1
Overhead Resistance (680-695)      1.9        1.5

OEX Close                       687.41     689.36

Underlying Support  (645-660)      1.9        2.1
(655-660)	1.7        2.3
                    (645-650)      2.2        1.8
 
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        .43
CBOE Equity P/C Ratio              .34        .34
OEX P/C Ratio                     2.07       2.07


(OEX)
Peak Open Interest   Friday         Tues         Thurs
Strike/Contracts     (4/23)         (4/27)        (4/29)
-----------------------------------------------------------------
Puts                 660 / 10,261   650 / 10,888
Calls                720 /  8,704   720 /  9,274
Put/Call Ratio       1.18           1.17  


  

Market Volatility Index Major
Date                    Turning Point     VIX
-----------------------------------------------------------------
October 97          Bottom              54.60      
October 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
April 27, 1999                          24.42


 


Investors Intelligence Survey

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




Please view this in COURIER 10 font for alignment
*************************************************
CHANGES THIS WEEK

Index     Last    Mon    Tue   Week
Dow    10831.71  28.92 113.12 142.04
Nasdaq  2602.41  61.36 -49.64  11.72
$OEX     689.36   2.57  -0.62   1.95
$SPX    1362.80   3.19   2.76   5.95
$RUT     435.16   3.24   0.19   3.43
$TRAN   3597.46  20.89 -13.11   7.78
$VIX      24.19  -0.05   0.28   0.23

Stock           Mon    Tue   Week

EGRP  119.44  15.94  -0.56  15.38 New, split run
NITE  126.88  15.19  -5.25   9.94 New, split run
LXK   128.00   4.31   4.75   9.06 New, split candidate
NXLK   78.00   4.50   2.38   6.88 Earnings are Thursday
QCOM  197.06  12.63  -6.44   6.19 New, split run
CTXS   44.19   2.75   2.75   5.50 Looking very strong
MFNX   84.44   5.88  -0.44   5.44 Catching its breath
HWP    80.13   2.38   0.63   3.01 Expectation continues
ADBE   65.00   0.50   1.00   1.50 The breakout continues
RNWK  181.13  14.82 -13.69   1.13 New, split run
SUNW   63.63   2.13  -1.81   0.32 Down with the Nasdaq
DELL   43.19   1.81  -1.63   0.18 Yeah! A buyable dip!
WMT    50.75   0.00  -0.19  -0.19 Confirm stock direction!
CMVT   64.50   0.94  -1.63  -0.69 Necessary profit taking
FDX   114.06  -0.44  -0.56  -1.00 Reaction to Airborne
ANF    94.75   1.44  -2.56  -1.12 More profit taking
CSCO  115.06   0.25  -2.56  -2.31 Down with the Nasdaq
YHOO  184.50   4.56  -7.75  -3.19 Necessary profit taking
AMZN  205.88  -2.94  -1.31  -4.25 Dropped, earnings tomorrow
PFE   121.13  -3.25  -2.63  -5.88 Dropped, no one buying

Puts

ELN    57.31  -3.13   0.69  -2.44 New intraday low!
MU     35.75  -1.75  -0.38  -2.13 Slow and steady
SCH   118.63  -1.50  -0.56  -2.06 Split is no help
FNM    70.31  -1.25  -0.75  -2.00 Only $4 to go
APD    41.38  -0.75  -0.56  -1.31 No support
RMBS   56.13  -0.25   1.13   0.88 Dropped, possible bottom
DLJ    77.75   0.38   1.00   1.38 Reaction to the Dow
PG     93.56   4.31  -1.25   3.06 Key turning point!
NSOL   83.31   6.75  -3.44   3.31 Volatile but weak



*****************
PICKS WE DROPPED
*****************
When we drop a pick it doesn't mean we are recommending a sell
on that play. Many dropped picks go on to be very profitable.
We drop a pick because something happened to change its
profile. News, price, direction, etc. We drop it because we
don't want anyone else starting a new play at that time. 
We have hundreds of new readers with each issue who are
unfamiliar with the previous history for that pick and we
want them to look at any current pick as a valid play.


CALLS:
******

PFE $121.13 -2.63 (-5.87)  On Sunday, we called this a longer 
term option play and said "You have time on this one, no need to 
rush in." We also suggested that conservative players wait for 
PFE to climb through its 10 dma before jumping in. We didn't 
expect this much continued sell-off, however. Even though yet 
another drug company, Warner Lambert, announced strong earnings,
there is still no rotation into the sector. PFE has obviously 
not hit bottom yet as it fell on strong volume today and ended 
the day near its low. Bob Pasanni on CNBC today suggested that 
institutional investors were actually SELLING because of the 
coming split, not wanting to hold the number of shares a 3:1 
will produce. Technically, PFE's chart still looks weak and we 
are dropping them as a play. If investors begin to move into this 
sector before PFE splits on June 2nd, we will look at it again.

AMZN $205.88 -1.31 (-4.25) This play proved to be very 
profitable.  AMZN offered many solid entry points and huge 
gains during this earnings run.  Today, it even hit a new 
52 week high at $221.25.  Tomorrow after the bell Amazon 
will announce earnings. As we stated on Sunday, unless you 
enjoy extreme risk your positions should be closed by now. 
But some of the aggressive players may be betting that the 
run will continue on the expectation of a split announcement.  
Keep your fingers crossed. The past two days profit takers 
had the edge and AMZN closed down.


PUTS:
******

RMBS $56.13 +1.13 (+0.88)  Rambus has performed extremely well 
for us as a put play.  Since we added it back on April 11th, 
it plummeted over $15.  We thought that the drop could continue 
well into this week.  But, that thought was cut short.  In 
early trading on Tuesday it fell to as low as $52.25.  However
we were hoping for a drop to $50.00.  After lunch however, it
miraculously gained some energy and actually finished the day 
up +$1.13.  This could possibly be a turn around point for 
RMBS.  If you are looking at some nice profits, it may be time 
to cash them in.  We are dropping RMBS especially since it was 
able to post a gain even though the NASDAQ was down almost -50 
points.  Don't be greedy.  Even though RMBS could lose a little 
more especially since it has recently lost the backing of Intel, 
take the $$ and smile. 



******************
PICK NEWS - CALLS
******************

MFNX $79.00 -0.44 (+5.44) There is no news on the wires 
related to yesterday's almost $6 rise which turns an 
investor's focus to the technical aspects of this play.  On 
April 13, MFNX announced a split and began a large sell-
off.  In the NASDAQ sell-off which ensued the following 
Monday, buyers stepped in sending MFNX back up for 6 
straight days on heavy volume.  Today, MFNX took a 
breather.  All indicators are in maximum positive range as 
the stock rages toward its split date of May 18 and 
(presumably) earnings around the same date, though the 
company hasn't picked a formal date yet.  Watch out.  MFNX 
is extended big-time above its 30 DMA indicating perhaps a 
pullback or at least a consolidation very near.  If you are 
in this play, tighten your stop.  Before starting a new 
play, wait for the dip or target shoot, but don't jump in 
based on the action over the last 6 days.  Confirm market 
direction first.

DELL $43.19 -1.63 (+0.19) Yesterday, news from IDC and 
Dataquest showed PC sales growth of 19% and 17% 
respectively.  Details revealed that Dell had closed the 
gap and passed up IBM as the #2 manufacturer world-wide 
behind #1 Compaq.  In the U.S., Dell's 12.6% market share 
is less than 1% behind Compaq's 13.4%, but Dell is growing 
its share of an increasing market at a 50% annual clip!  
Sounds great, but keep your eyes on the chart.  Dell has 
remained range-bound between $36 and $46 and turned down 
today from Yesterday's high of $45 on large volume. . . 
probably just profit taking after 5 days of successive 
gains, but keep your stops a bit tight until you see Dell 
on the rise again.  Earnings are May 18, so we think 
there's plenty of time to target shoot or wait for a better 
price.  Confirm market direction before playing.

SUNW $63.63 -1.81 (+0.32) Following a recent nice move over 
its 30 DMA of $61-$62, in today's trading SUNW reminded us 
of an airplane losing power just after lifting off the 
runway on take-off.  Like other NASDAQ losers today, it 
probably just needs to breath after a few days of 
continuous rises.  Today's loss came with lower volume, 
which indicates just profit taking and not panic.  
Nonetheless, if a profit taking day turns into a 
correction, have your stops in place to protect your 
profits.  MACD is still positive, but RSI is flattening, 
perhaps signaling a stall.  Target shoot or wait for a 
clean break over $65 with volume.  As always, confirm 
market direction before starting a new play.

YHOO $184.50 -7.75 (-3.19) Yesterday, the Internets did 
great.  YHOO was up over $4.  Today, we saw a sell-off in 
the Internets as most were sucked into a red-ink vortex.  
Profit taking hit, and it didn't help that AOL was sold off 
today prior to its earnings announcement after the close, 
dragging YHOO with it.  Though AOL reported earnings at the 
high end of the whisper scale, it traded down $3 after 
hours.  Again, YHOO followed.  Think the worst is over?  
Think again.  The same could happen tomorrow after 
Amazon.com reports earnings and YHOO may again follow.  If 
you are in this play, tighten up the trailing stop.  If you 
want in, let the air clear and confirm market direction 
before starting the play.  Being an Internet, YHOO is still 
a risky play.

WMT $50.75 -0.19 (-0.19)  After making a nice run last week, 
WMT decided to take a small break.  It shed a mere nineteen 
cents in trading on Monday and Tuesday.  Part of the 
hesitation could be from some news released by Toys "R" Us, 
the company that recently lost its #1 toy-retailer ranking 
to Wal-Mart.  Toys "R" Us is now trying to play catch up and 
plans to augment its e-commerce business by inputting $80 
million to improve their Internet capabilities.  This could 
provide some additional competition for WMT but that still 
remains to be seen.  WMT will announce its earnings on May 
11th and the numbers could be strong.  This temporary dip 
could substantiate an entry point.  

 
***** Play updates continued in section two *****





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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         Tuesday  4-27-99  
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

**********************
TRIVIA CONTEST ANSWER
**********************

This was the Microsoft company photograph in 1978. The
young face in the lower left is Bill Gates and the bearded
wonder lower right is Paul Allen. You don't think you
looked that bad in 1978 do you? 



*****************************
PICK NEWS - CALLS (continued)
*****************************

FDX $114.06 -.56 (-1.00)  FDX was down only slightly today in 
a generally lower airlines group. Same niche Airborne Freight 
moved down 11% after reporting lower than expected Q1 earnings 
and receiving a downgrade. FDX's drop was comparatively small 
and it won't stay down long as traders move onto the stock 
ahead of its 2-for-1 May 6th stock split. In the news: a report 
by UK based Cranfield School of Management says that inter-
national express distribution will be a growth industry of the 
future, outstripping GDP growth. FDX already knows that and has 
positioned its business accordingly. The slight drop provides 
a better entry for option players.

ADBE $65.00 +1.00 (+1.50)  ADBE is still climbing steadily on 
good volume. It closed at its previously set 52-week high and 
was $.50 higher than that during the day. ADBE has nice momentum 
and looks good to continue moving up, although, as with most 
stocks, there will be pauses to catch its breath.

HWP $80.13 +.63 (+3.00)  HWP had a nice move up yesterday and 
continued up today even as Dell lost ground. HWP is getting a 
good sympathy move from IBM as earnings expectations keep rising 
for the company based on IBM's good news. Also, reports indicate 
that PC sales are still generally strong in spite of Compaq's 
numbers. Looks like IBM and probably HWP and Dell are stealing 
business from CPQ. HWP should have no trouble topping resistance 
at its previous high of $83.88 as it makes an earnings run 
toward the expected report date of May 17th.

ANF $94.75 -2.56 (-1.13) ANF made a nice gain on Monday to
just give it back, plus some, on Tuesday.  There isn't
any news to account for the drop, other than good old
profit taking.  ANF was up over $15 in one week.  Support
is in the $91-92 range.  A bounce off this support would
be buyable.  (for those analyst minded individuals, ANF's 
annual report came out yesterday.  Pretty impressive!)

CMVT $64.50 -1.63 (-.69) CMVT had a nice day on Monday, as
it reached a new 52-week high of $67.25.  Unfortunately, it
did not hold and CMVT is now down $.69 for the week.  CMVT
still has a very positive MACD and the telecommunications
industry has a very strong outlook.  CMVT isn't immune to 
profit taking and it has had a strong move this last week.
Make sure of market direction and look for an entry point
on a new move up.

CTXS $44.19 +2.75 (+5.50)  The buying pressure did continue 
and CTXS spiked up 14% since Friday.  This makes the 6th 
consecutive day the stock has made gains.  Therefore, it's 
reasonable to expect some consolidation to possibly occur 
over the next few days.  Instead, if the stock continues climb 
higher without a breather, it faces opposition at $53.75 - 
its 52 week high. Confirm the direction before you open a 
new position.  In the news, Citrix and Cisco announced they 
will collaborate on software router configurations.  This 
technology will be specifically designed for CTXS's ICA 
system which is emerging as the industry standard for 
server-based computing.   

NXLK $78.00 +2.38 (+6.88)  This earnings run is hot! But it's 
coming to an end so be prepared.  Nextlink will report earnings 
this Thursday and you should be out of the game by then.  
Holding over an earnings announcement is risky and not 
recommended.  On Monday, NXLK tacked on +4.50 and peaked at 
$76.75 to set a new high.  Today, NXLK was a stellar performer 
and added on another $2.38.  At one point during intraday 
trading, it surged ahead and topped $81.25 leaving yesterday's  
new high in the dust.

CSCO $115.06 -2.56 (-2.31)  Cisco was steady on Monday and 
held onto a fractional gain.  But today the market pressure 
and the many profit takers on the Nasdaq pulled CSCO down a 
couple points.  This may be a good entry point. There are two 
elements to consider in this play.  One is that earnings are 
only a couple of weeks away on May 11th.  But secondly, to 
add some excitement to this run is the possibility of a split
announcement.  CSCO split 3:2 in September 1998 when the 
stock was around $100. Presently, CSCO is trading well above 
that mark and flirting with its 52 week high of $120! Nothing 
is etched in stone, but they have 2.7 bln shares authorized 
and 1.6 bln outstanding which is enough for another 3:2 
stock split.  Cisco's annual shareholders' meeting is generally 
held in the fall, so perhaps they will announce a stock split 
with their earnings report. 


*****************
PICK NEWS - PUTS
*****************

DLJ $77.75 +1.00 (+1.37)  DLJ added a dollar in trading on 
Tuesday as the markets surged over +110 points.  Even though 
the stock is up +$1.38 so far this week, we feel the profit 
taking isn't over.  Anytime the market makes a substantial 
move up, a subsequent drop usually follows.  Look for DLJ to 
correct again along with the markets.  However, we are urging 
you to use caution with this play.  The stock seems to have 
found some support at the $75 level and if the markets 
continue heading higher, DLJ could follow.

SCH $118.63 -0.56 (-2.06)  SCH is looking better and better 
as a put play every day.  Even though SCH continues to 
announce positive news, the stock is still descending.  SCH 
announced a 2:1 split scheduled for July.  Big deal.  SCH 
announced that it has made its Web site more consumer friendly.  
So what.  The stock dropped $1.50 on Monday.  It dropped 
another -$0.56 on Tuesday when the DOW surged over +110 points.  
This is definitely a sign of weakness.  Watch for further 
consolidation as this online broker cools off.  Make sure to 
follow you positions with stop losses.  

MU $35.75 -.38 (-2.13)  The slide continues for MU this week. 
The stock has not been this low since October of 1998. Today it 
was upgraded by Needham and Co. from "avoid" to "hold"--not 
exactly a ringing endorsement, but possibly enough to slow 
down (not stop), some of the selling. As the stock price drops, 
watch out for more valuation upgrades. Still, we don't expect 
any strong upgrades for a while, as the stock's forecast is 
not expected to improve until late summer.

APD $41.38 -.56 (-1.31) We are seeing what we expected in 
APD as the stock drifts lower as money flows out of 
cyclicals back to the technology sector.  The decline in 
the NASDAQ on Tuesday actually caused cyclicals as a whole 
to be up but APD still managed to end lower.  The company 
had a press release today describing their providing of 
services to an international consortium named Sea Launch 
but it was not a stock-moving announcement by any means.   
The stock is now below its 10-dma and still looks to have 
quite a bit of air underneath it.    

NSOL $83.31 -3.44 (+3.31) NSOL showed its weak side again 
today by opening at $89.75 and giving it all back plus 
another $3.44.  The stock is searching for a bottom but is 
unable to find a support level.  But like we mentioned on 
Sunday, the company is trying to stop the downward momentum 
with positive comments and announcements.  We've seen that 
this week with multiple press releases and company 
officials presenting at the Hambrecht & Quist's annual 
technology conference.  Even with all that the stock is 
providing good entry points and opportunities make money on 
put plays.  We still see more chances to profit as the 
volatility and volume continues to be above average and the 
trend still signals a lower stock price ahead.   

PG $93.56 -1.25 (+3.06) PG jumped out of the trading gates 
on Monday as it was looked anxious to rebound from its more 
than 3 point drop on Friday.  This is to be expected and is 
nothing more than a technical move.  In fact the stock 
traded right up to its 50-dma moving average at $95 but was 
unable to bounce through.  This confirms the pattern and 
provides an entry point to opening new plays.  The failure 
to move above its 50-dma caused the stock to drop back 
Tuesday despite the rally in the Dow Jones.  With our 
pattern now in place, the next stop for PG should be a 
retest of the lows reached last Thursday around $90.  Keep 
your stops tight in case of a rally that pushes PG above 
the $95 mark on a closing basis.      

FNM $70.31 -.75 (-2.00) We added FNM as a rolling stock play
on Sunday.  Take a look at a 3-month chart of FNM and the 
channel is very clear.  FNM has been in a $6 range.  We 
picked FNM at the high end of the range and it has since
dropped $2.00.  Don't be greedy, take profits and then wait
to buy the call on the bounce back up.  We like the fact
that FNM has gone down, even though the Dow has been up.

ELN $57.31 +0.69 (-2.43)  ELN descent continued on Monday as 
it lost $3.12 for the day.  During trading it dropped almost 
6 points and established a new low at $53.88!  The volume was 
again remarkably strong with over 3 mln shares traded compared 
to its ADV of 998 K.  Today, the volume lightened up and ELN 
closed up a fraction.  From a technical standpoint, ELN is now 
in uncharted territory. The stock is positioned 11-12 points 
below the bearish 200 dma and the MACD still indicates further 
descent; however keep in mind, the bargain hunters.  In the 
news today, Elan announced they are reacquiring all rights to
Nifedipine, a generic to Alalat heart drug, from Warner Chilcott 
for an initial fee and future royalties. Elan believes this will 
boost its year 2000 drug sales.  Please confirm ELN's direction 
before you begin a new play.  


***************
NEW CALL PLAYS 
***************

QCOM -  QUALCOMM Inc. $197.06 -6.44 (+6.19 this wk)(+48.38)

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

As we had promised back on Sunday April 18th, we are re-adding 
QCOM now that it has overcome profit taking.  It initially made 
a huge run-up on the news that it had made amends with Ericcson.  
Now it has consolidated and is back on track.  Even though QCOM 
was down -$6.44 in trading on Tuesday, we feel this is a buyable 
dip.  QCOM is two weeks from its 2:1 split scheduled for May 
11th.  QCOM could easily surpass its all time high of $218.50 
on split momentum.  Get ready for this big time stock to rock 
and roll!  (confirm market direction before playing)

No new news.

BUY CALL MAY-195 AAW-ES OI= 124 at $18.63 SL=14.50
BUY CALL MAY-200*AAW-ET OI=1418 at $16.50 SL=13.00
BUY CALL MAY-210 AAW-EB OI= 136 at $12.50 SL=10.50
BUY CALL JUN-200 AAW-FT OI= 105 at $23.00 SL=18.00
  
Picked on April 27th at $197.06    PE = 273
Change since picked      +$0.00    52 week low =$ 37.75
Analysts Ratings      6-6-4-0-0    52 week high=$218.50
Last earnings 04/99 est 0.25   actual 0.82 
Next earnings 07-21 est 1.06   versus 0.33
Average Daily Volume = 2.73 mln
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m

******

RNWK - RealNetworks $181.13 -13.69 (+1.13this week)

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

We are adding RNWK back as a call.  The stock looks to have
formed a base at the $180 mark.  We also feel that a split
run could start at any time.  RNWK splits on the 10th of May.
RNWK has a 52 week high of $263, so it has room to grow. 
(confirm market direction before playing)

RNWK has announced more details of the highly anticipated
RealNetworks Conference & Exhibition at the San Francisco 
Marriott, May 5-7, 1999.  The RealNetworks' RealPlayer(R) G2 
user base has grown phenomenally over the past year to more 
than 60 million registered users.  This growth coupled with 
the thousands of Internet and intranet sites that have 
adopted streaming media content, has significantly impacted 
the scope of this year's conference schedule and program of
events.  We feel this will create some enthusiasm for the
product.  Very expensive premiums, but can also show huge
gains. 

BUY CALL MAY-185 RNW-EQ OI= 49 at $26.63 SL=20.50 
BUY CALL MAY-190*RNW-ER OI=367 at $24.63 SL=18.50 
BUY CALL MAY-195 RNW-ES OI=113 at $22.75 SL=17.50
BUY CALL JUN-190 RNW-FR OI= 20 at $37.13 SL=28.00 

Picked on Apr.27th at  $181.13  PE = n/a
Change since picked      +0.00  52 week low =$ 14.50
Analysts Ratings     1-7-0-0-0  52 week high=$263.75
Last Earnings   04/99 est -.02  actual -.02
Next Earnings   07-20 est -.02  versus -.08
Average daily volume = 1.05 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m

******

EGRP - E*Trade $119.44 -0.56 (+15.38)  

EGRP is now the #2 online brokerage firm (behind Schwab) 
with almost 1,000,000 accounts.  EGRP also offers market 
data, cash and portfolio management services, and options 
trading.  About 30% of sales come from sales of advertising 
on its Web site, international ventures, subscriptions, and 
other services.  Through joint ventures the company also 
operates in such countries as Canada, France, Germany, 
Japan, the Netherlands, and Poland.  SOFTBANK, its joint 
venture partner in E*TRADE Japan, owns 28% of the company.

Heads, it's a call.  Tails, it's a put.  Today?  A call!  
As we said when we dropped EGRP Sunday, "we're dropping 
EGRP for now with the idea that they may make our call list 
as they approach their May 21 split".  We just didn't 
expect a recovery so quickly.  Nonetheless, EGRP does split 
2:1 on May 21.  Technically (you'll need sharp daily focus 
for this), EGRP put in a double bottom of $115-$116 in 
today's trading on an otherwise down day for the NASDAQ.  
Furthermore, as the rest of the market was selling off at 
the close, market makers and investors were buying EGRP.  
MACD, momentum, stochastic and RSI are trending north too.  
As we've said before, don't fight the tape.  Confirm market 
direction first before playing and use stops.  EGRP, though 
a brokerage, behaves like an Internet and should be 
considered a HIGH RISK (!!!) play.

Not much news to find, but we consider it significant that 
E*Trade announced Monday it has surpassed 1,000,000 
accounts, almost double the amount of 558 K they had when 
we began covering EGRP about 6 months ago.

***Due to high volatility, we offer no odd strike prices.
***Note too that no JUN strikes above 120 yet exist.

BUY CALL MAY-110 QGZ-EB OI=2042 at $17.88 SL=14.00
BUY CALL MAY-120 QGZ-ED OI=1244 at $12.50 SL=10.00
BUY CALL MAY-130*QGZ-EF OI=1036 at $ 8.63 SL= 6.50
BUY CALL JUN-120 QGZ-FD OI= 385 at $20.75 SL=16.25
BUY CALL JUL-130 QGZ-GF OI= 276 at $22.50 SL=17.50

Picked on April 26 at $119.44         PE = n/a
Change since picked    +00.00         52 week high=144.50
Analysts Ratings    4-4-3-0-0         52 week low =  5.00
Last Earnings 04/99 est -0.16 actual -0.12
Next Earnings 07-21 est -0.02 versus  0.08
Average daily volume = 8.8 mln. 
Chart = http://finance.yahoo.com/q?s=EGRP&d=3m

*****

LXK - Lexmark Intl Group, Inc $128.00 +4.75 (+9.06this week)

Lexmark develops, manufactures, and markets laser and inkjet 
printers and related products.  They target both the home and 
business markets which accounts for more than 80% of its total 
revenue.  Lexmark sells its products in more than 15,000 retail 
outlets in over 150 countries. 

Lexmark posted better-than-expected earnings on April 20th and 
the forecast looks good for the company.  Contrary to the odds, 
LXK started to spike up right after their earnings report. 
However, this ascent is likely related to the possibility of 
an upcoming stock split. On Thursday, Lexmark is holding its 
annual stockholders' meeting and one of the proposals is to 
increase common shares from 160 mln to 450 mln - certainly more 
than enough for a nice stock split. OI has been predicting 
a split for a long time now and we hope this is it.  LXK 
has advanced over $23 since the earnings report and both days 
this week the stock hit new highs.  There is no more resistance 
for LXK to overcome. NOTE: The shareholder meeting starts at 
10:00 am Kentucky time.  (be aware than profit taking is 
imminent)

On Monday, BB Robertson Stephens initiated coverage with a 
"buy" and set a target price of $150.  Both senior analysts, 
Alex Mou and Daniel Niles, cited Lexmark as being a "superior 
cost-effective business model".  Watch for profit-takers at 
this high price and as always, confirm direction before you 
jump in the market.

Please note:  Because these contracts are new, there is no OI 
above the 120 mark.

BUY CALL MAY-120*LXK-ED OI=310 at $12.63 SL=10.25
BUY CALL MAY-125 LXK-EE OI=  0 at $ 9.63 SL= 7.25
BUY CALL MAY-130 LXK-EF OI=  0 at $ 7.13 SL= 5.25
BUY CALL JUN-125 LXK-FE OI=  0 at $13.38 SL=10.75
BUY CALL JUN-130 LXK-FF OI=  0 at $11.00 SL= 8.75

Picked on April 27th $128.00   PE = 32
Change since picked    +0.00   52 week low =$50.75
Analysts Ratings   4-2-1-0-0   52 week high=$128.50
Last earnings 4/99  est= .69   actual= .96 
Next earnings 7-20  est= .98   versus= .75
Average daily volume = 596.7 K
Chart = http://quote.com/q?s=lxk&d=3m

*****

NITE - Knight Trimark Group $126.88 -5.25 (+9.94 this wk)

Knight/Trimark Group is a market maker in equity securities 
listed on the OTC, NYSE, and AMEX.  The company provides 
market makers on over 4200 securities including all 
securities listed on the New York Stock Exchange.  Their 
customers include all of the major financial institutions 
including Merrill Lynch, E*Trade, Paine Webber, Ameritrade 
and others.  The company has been a major benefactor of the 
online trading revolution.  

NITE is gearing up for its pre-split run.  It is scheduled 
for a 2-for-1 on or about May 14.  The company announced 
this during its 1Q earnings report on 4/21 when they blow 
away estimates of .39 cents by reporting a net of .67 
cents.  Talk about your upside surprises!  This has just 
added fuel to NITE's already blazing stock price.  Throw in 
upgrades from companies such as Merrill Lynch, Putnam and 
CIBC Oppenheimer and the stock looks poised to trade 
higher.  We got a pullback today that showed support at the 
$125 range so watch for any weakness in the sector or broad 
market as an opportunity to open a new play.

The stock's news has been quite this week following the 
earnings news and upgrades from last week.  This stock is 
commonly lumped in the online traders category even though 
it mainly deals with the institutions but watch for news on 
any major online broker to move the entire sector.

BUY CALL MAY-125 TNW-EE OI=258 at $15.38 SL=11.50
BUY CALL MAY-130*TNW-EF OI=456 at $13.00 SL=10.00 
BUY CALL JUN-135 TNW-FG OI=  9 at $18.00 SL=13.00 

Picked on Apr.27th at  $126.88  PE = 92
Change since picked      +0.00  52 week low  =$  4.50
Analysts Ratings	   5-1-1-0-0  52 week high =$136.00
Last earnings   04/99 est= .39  actual= .67 surprise=+72%
Next earnings   07/21 est= .61  versus=.23 
Average Daily Volume = 1.81 mln
Chart = http://quote.yahoo.com/q?s=NITE&d=3m




**************
NEW PUT PLAYS 
**************

None today


******************
COMBINATION PLAYS   
******************
Dow 11,000?

Monday, April 26

Technology stocks propelled Wall Street higher today, vaulting the
Nasdaq index into record terrain on optimism of the new demand for
personal computers. The index of high-tech issues jumped 61 points
to 2,652.13. The DJIA also participated in the bullish activity,
rising 28 points to 10,718 which is just short of last Thursday's
record high. In the broader market, declining issues led advances
16 to 13 on active volume of 710 million shares on the NYSE. One
other item is of interest; at midday, the exchanges observed a
minute of silence to commemorate the victims of last week's murder
rampage in Littleton, Colorado.

Sunday's new plays (positions/prices):

COMS  OCT25C/MAY25C  $2.87 debit  (lots of movement and OI)
RHI   NOV25C/NOV25P  $6.75 debit  (played at the open)
UMG   JUL75C/JUL75P  $9.87 debit  (look for a bid from Comcast)
MTZ   MAY30C/MAY20P  $1.62 credit (slightly less than our target)
ACAI  MAY35C/MAY22P  $0.93 credit (slightly less than our target)

* There was no play available on QCOM after the options market
  opened. The stock gapped-up and the spread had no credit.

Portfolio plays:

DELL was on the move again rising $1.81 to $44.81 after two major
research firms reported that worldwide shipments of PC's rose a
better-than-expected 18% in the first quarter. We used the upward
move to exit two of our previously losing plays at a small profit.
Now the difficult part is to find a new entry point with Dell's
technical resistance near $46-$47.

Tuesday, April 27

The Dow moved higher to another record but a major sell-off in
tech stocks battered the Nasdaq. The 30-stock Dow index jumped
113 points to 10,831, surpassing Thursday's record of 10,727.
The Nasdaq index dipped 49 points to 2,602 after five straight
days of sharp gains. In the broad market, advancing issues led
declines 17 to 12 on active volume of 893 million shares on
the NYSE.

Portfolio plays:

Two of our remaining long positions from calendar spreads (last
month) moved higher today. GILD gapped up $3.00 and filled the
GTC sell order at $2.50, closing the play for a nice profit of
$1.12. ITWO also moved $2 higher, allowing us to exit our call
option at $2.38 for a $0.75 gain. DELL was down on profit-taking
but we are still watching the ATM-ITM options to find another
disparity for one more earnings run play.

Good Luck!

**********
NEW PLAYS 
**********

QNTM - Quantum  $20.38     *** Volatility Play ***

Quantum is the nation's #2 maker of disk drives and they produce
high-end hard disk drives, solid-state disk drives, cartridge
tape drives, and tape-drive-related products for such customers
as Compaq, Hewlett-Packard, Apple, IBM, and Dell. Quantum also
competes in the market for high-end disk drives, which are used
by network-serving computers. Quantum's tape-drive business has
benefited from the increased use of the Internet, corporate
intranets, and database servers, which require frequent backup.

Today Quantum reported quarterly earnings and there was lots of
excitement and bullish forecasts. Net income was favorable but
most of the other important numbers fell short due to aggressive
industry-wide price declines in the disk drive market throughout
much of the company's fiscal year. The good news was that sales
of their DLTtapeTM and storage systems set records in revenue
and units shipped. They also announced broad-based OEM support
for the new DLTtape(TM) backup solution.

We like the company long-term but feel that today's activity was
a bit overdone. The overpriced May options will allow us to take
a favorable long-term position in this issue (at a discount) or
profit from the erosion of the short-term volatility.

PLAY (conservative/calendar spread):

BUY  CALL AUG-20 QNQ-HD OI=577  A=$4.12
SELL CALL MAY-20 QNQ-ED OI=2855 B=$2.25
INITIAL NET DEBIT TARGET=$1.62 TARGET ROI=100%

PLAY (aggressive/calendar spread)

BUY  CALL JUN-20 QNQ-FD OI=187  A=$2.87
SELL CALL MAY-20 QNQ-ED OI=2855 B=$2.25
INITIAL NET DEBIT TARGET=$0.50 TARGET ROI=100%

Chart = http://quote.yahoo.com/q?s=QNTM&d=3m
******************************************************************
AEOS - American Eagle Outfitters  $78.75     *** Split Run? ***

American Eagle Outfitters was an outdoor products company at one
time but now they sell collegiate-style casual apparel including
shirts, pants, shorts, sweaters, skirts, footwear, belts & bags.
Virtually all the company's wares bear its private-label brand
names: American Eagle Outfitters, AE, and AE Supply. The company
operates more than 350 mall stores in 39 states, primarily east
of the Rockies.

You will see this stock listed almost continuously in the OIN as
it has performed incredibly over the past year. Last month, AEOS
announced total sales for the previous five weeks increased 50%
to $63.8 million and comparable sales for the 1999 period were
up 33% compared to the corresponding five week period last year.
Sales for the quarter were just as outstanding on a comparative
basis and the future outlook remains favorable.

Today's dip may offer an entry for the call-option buyers that
are expecting a run on the 2-for-1 split, effective 5/3/99. We
will take another conservative approach with an OTM put-credit
spread.

PLAY (conservative/credit spread):

BUY  PUT MAY-65 AQU-QM OI=633 A=$0.56
SELL PUT MAY-70 AQU-QN OI=775 B=$1.25
INITIAL NET CREDIT TARGET=$0.75 ROI=17%

Chart = http://quote.yahoo.com/q?s=AEOS&d=3m
******************************************************************
WCOM - MCI WorldCom  $87.62     *** Costly Buy-Outs? ***

MCI WorldCom is second only to AT&T in the long-distance market.
WCOM has fiber-optics in local and international telecom markets
in more than 65 countries. Their UUNET WorldCom subsidiary offers
Internet access to businesses over its massive Internet backbone,
while MCI WorldCom also provides consumer Internet access through
an alliance with America Online's CompuServe unit.

We all know that MCI WorldCom is hungry, currently expected to
acquire wireless company Nextel but today they agreed to buy CAI
Wireless Systems, the #2 U.S. long distance provider, at a price
that is 17% higher than first announced. The revised deal allows
CAI shareholders to receive $28 per share in cash, up from the
$24 per share offer announced just 10 days ago.

Needless to say, the WCOM investors were not happy but we think
they will get over it because the wireless licenses controlled by
CAI Wireless will allow MCI WorldCom to reach customers' homes or
businesses without going through the Baby Bell's local networks.
CAI's wireless spectrum, called MMDS, uses microwave frequencies
to provide television service.

Once again, today's activity may have been a bit overdone and it
will allow us to speculate (with a small edge) on the eventual
rebound of the stock. Lets hope they don't buy anything else this
month!

PLAY (conservative/credit spread):

BUY  PUT MAY-75 LDQ-QO OI=1922 A=$0.68
SELL PUT MAY-80 LSQ-OP OI=6521 B=$1.18
INITIAL NET CREDIT TARGET=$0.62 ROI=14%

Chart = http://quote.yahoo.com/q?s=WCOM&d=3m
******************************************************************
BRCM - Broadcom  $78.38     *** Nice Move Today! ***

Broadcom makes semiconductors used in broadband (high-speed) data
and video transmission products. The company controls the market
for cable modems and digital set-top boxes. Its chips are also
used in products for Ethernet networking, broadcast satellite,
and digital subscriber line markets. Customers include General
Instrument and 3Com, which account for the majority of revenues.

The networking business is picking up nicely, and BRCM continues
to dominate the market for quad phys, a key component in the Fast
Ethernet switch market. Sales to GIC, as a percentage of total
sales, were reduced from 48% in the fourth quarter, while Cisco
became a significant customer for the first time. An acquisition
of privately held Maverick Networks is expected to bring business
from Cisco. Maverick makes silicon solutions used in layer three
switching applications, a new industry in which Cisco is looking
to expand.

In the financials, first quarter revenue climbed 172% to about
$96 million compared to the prior year and 37% from the previous
quarter. Earnings of $0.19 per share represented a 111% increase
from the first quarter of 1998. The company credits strength in
the quarter to three areas: networking products, set-top boxes,
and cable modem products. By gaining momentum in these areas,
Broadcom is emerging as a giant in the transition to broadband
communications, and the convergence of voice, data, and video
transmission.

We also like the bullish outlook of the chart and the break-out
above previous resistance near $75.

PLAY (very conservative/debit spread):

BUY  CALL JUN-70 RCQ-FN OI=60 A=$14.12
SELL CALL JUN-80 RCQ-FP OI=99 B=$8.50
INITIAL NET DEBIT TARGET=$5.38 ROI(max)=85% B/E=$75.38

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



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