Option Investor
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Daily Newsletter, Sunday, 05/02/1999

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The Option Investor Newsletter            Sunday  5-2-99  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 4-30          WE 4-23          WE 4-16           WE 4-9
DOW    10789.04 + 99.37 10689.67 +193.78 10493.89 +320.05  +341.33   
Nasdaq  2542.85 - 47.84  2590.69 +106.65  2484.04 -109.01  + 99.68   
S&P-100  675.65 - 11.76   687.41 + 18.76   668.65 - 12.69  + 31.42   
S&P-500 1335.18 - 21.67  1356.85 + 37.85  1319.00 - 29.35  + 54.63   
RUT      432.81 +  1.08   431.73 + 10.15   421.58 + 15.72  +  7.12   
TRAN    3647.29 + 57.61  3589.68 + 60.98  3528.70 +158.30  + 61.24   
VIX       26.07            23.96            25.48            22.91
Put/Call    .53              .59              .63              .54
******************************************************************

-307 points, just another Prozac moment in the market.

From the intraday high of 10,961, only 39 points from the 11,000
goal, the DOW dropped -307 points just after noon on Friday. Just
when you thought we had another major market milestone in sight
the bond bears slipped up behind us and scared the recent profit
right out of the market. April will still go down as the best
month in DOW history in terms of points gained. Over +1000!
But with any major market move traders were getting more and more
concerned about mounting profits at risk. The DOW did bounce from
the -224 low to only -84 at the close as bargain hunters bought
the dip.

The official reason for the massive downdraft on Friday was the
very strong GDP numbers. With estimates at +3.3% the actual number
of 4.5% was far above expectations. The number showed that consumers
were spending at the fastest rate in more than a decade. 

Only Thursday the Employment Cost Index showed almost no inflation
and the lowest rise in employment costs since 1982. This report
had sent investors off in a rush to buy financial stocks as fears
that the Fed would raise rates soon, almost disappeared. Fridays
very strong GDP immediately rekindled those same fears and may
have actually strengthened them. Investor fled financial stocks
in droves. 

The bond bears hammered bonds for a full -2 points and the interest
rate jumped from Thursdays 5.52% to a whopping 5.66%. The DOW 
finished April with a gain of +10.3% or 1002.88 points. The Russell
finished April with a gain of +8% mostly on the backs of some soon
to be removed Internet stocks.

The Nasdaq was in full rally mode on Friday after the midweek sell
off ran out of steam on Thursday. The Nasdaq was up over +50 points
when the GDP numbers were released and the DOW started giving back
some of its recent profits. With the DOW dropping like a bunker
buster in Belgrade the Nasdaq traders took a quick profit and ran
for cover as the Nasdaq was caught in the DOW vacuum. However another
Nasdaq sell off was not to be. The instant the DOW bounced off its 
lows at 10,654 the Nasdaq buyers, sensing another buying opportunity,
flooded the market with buy orders and pushed the Nasdaq back into 
positive territory in less than thirty minutes. Many of the Internet
stocks had double digit moves up, down and then back up again. A
real day traders dream!

I wish I could say the DOW profit taking was now over but if you
look at the charts of the OEX and SPX below you will see they 
started selling off three days ago while the DOW was still moving
up for two of the three. 


http://free.OptionInvestor.com/charts/image29.gif http://free.OptionInvestor.com/charts/image30.gif http://free.OptionInvestor.com/charts/image31.gif The S&P-500 (SPX) and S&P-100 (OEX) provide a better indicator for the overall market than the Dow. With only 30 stocks and such a high divisor a $1 move in a Dow stock amounts to a $4.60 move in the Dow average. Just a couple stocks making big moves can distort the daily number and hide the real direction of the market. However, even though the SPX and OEX have been dropping the advance declines on Friday were not that bad. The NYSE had 1329 advances and 1662 decliners. With a -300 point drop you would have expected a more lopsided representation. The Nasdaq was positive with advancers leading 2085 to 1937. The problem we face this week is the vacuum left by the lack of earnings excitement. With over 85% of the S&P-500 already reported the sheer volume of meaningful earnings announcements is dwindling. Without the earnings expectations to fuel the rise we could start to see pressure put on the market from sellers wanting to lock in profits from the +1000 points in April. There are a few major announcements left and many traders will be moving into these stocks and trying to squeeze a few more dollars out of this cycle. Dell reports on May-18th and Cisco on May 11th. Both could still have significant runs if the market does not correct this week. The coming week is littered with potential economic reporting problems. Monday has Personal Income and Spending and Construction Spending to either fuel the inflation fire or douse it. Wednesday has Factory Orders but Friday is the killer with Non-farm Payrolls again. This is retail week with many retail stores announcing earnings and analysts are sure to see inflation fears behind every robust announcement. The big drop on Friday was a market-clearing move in some respects. What I mean by this is a lot of people had their stops hit and they were cashed out of their trades. This is positive because they will now be looking to put this cash back to work next week. The drop created another positive for us. There were many stocks that got hammered hard and the drop showed us where their support levels were. IBM for instance tested $204 again and did not hesitate to bounce. Many stocks we looked at this weekend retested support levels from the big Nasdaq crash on Monday two weeks ago. Those that held support and rebounded strong became good plays today. REMEMBER however that they are only good plays if the market continues flat or up. If the market decides to correct then you need to be in cash. It is imperative you are always market conscious and ready to bail out for a small loss if the market moves against you. The overall market is still positive and if we do correct then there will be a point where the buyers will step in and start the next up move. You need to decide now if you want to be a buyer when that happens OR do you want to be nursing a losing position that you held as the market fell. Who do you think has a better chance to win? Someone in cash or someone just wanting their position to get back to even again. Have a great week! Wait for an entry point! Sell too soon. Jim Brown Editor ***************************************************** JIM'S PLAYS ***************************************************** I do not want to relive this week over again. The great move Friday happened after I had moved into cash and quit trading for the day. I sold everything except my Dell when the market appeared to peak on Friday morning. I was near a TV with CNBC so I got to live every tick of the afternoon drop but was no where near a PC and I could not trade it. The week started off good with the Nasdaq up strong on the heels of the week ending rally from last week. I started several new plays and felt pretty good about the positions. Then the Tuesday sell off jumped up and bit me hard. It only went down hill from there. http://free.OptionInvestor.com/charts/image32.gif The trades I started on Monday were closed with mixed results but then the problems started. You know what is coming. I bought the dip - too soon. On Tuesday afternoon I thought I saw the Nasdaq flatten and even show some support and I jumped back in with both feet hoping to hit the bottom. There was no bottom I quickly found out. Those trades were closed on Wednesday for a loss and I settled back and waited for the next opportunity. I decided to be more selective and not open more than one or two positions when the bounce came. The brokerage stocks I had tried to trade on Mon/Tue were moving erratically so I looked for something that was maintaining an upward trend even though the Nasdaq was falling. The Knight Trimark (nite) play looked to be a perfect example. http://free.OptionInvestor.com/charts/image33.gif Even though the Nasdaq had fallen, NITE had remained flat and even showed signs of upward movement. On Wednesday morning I bought NITE for $130 with the idea of writing calls on it. Within an hour the price was over $140 and the quick profit was too much to resist. NITE has a split next week and I thought the combination of Internet stock and split would insulate it some from the profit taking. I kicked myself later for not buying it back again Wed. night when the market dropped at the close but decided to go back to the original plan and buy it the next day and write some May calls. I waited until late afternoon on Thursday because the Nasdaq was still falling. When the Nasdaq appeared to firm at the end of the day I tried to buy NITE several times but it was moving faster than I could change the orders. I finally changed my limit buys to a market and got filled at almost the high of the day, $145. OUCH! Fortunately the chances for a technical bounce on Friday were borne out and we got the big open Friday morning. Again I saw NITE surge at the open to over $160 and I could not pass up the quick trading profit. I bought Dell all week long at every false bottom I saw. I now have a larger position in Dell than I wanted but at $40-$41 Dell is a bargain with earnings still over two weeks away. I kicked myself all week also for not selling my Dell-May-50 calls on Monday for $1.88 when I had the chance. The greed factor got in the way. Knowing this was a free position in my eyes only clouded my judgement and I watched a very nice profit slip away to only a minor profit. For those of you who did not read last weeks column, I have a large number of contracts I stole on a dip the week before for $.44 each. A $1.44 profit on a $.44 option is a home run in my book but my target was a $2.44 sell. With earnings still over two weeks off I kept consoling myself with every Dell dip that it would come back with the market. THIS IS THE WRONG IDEA. THIS IS A CLEAR ERROR IN JUDGEMENT. I preach against this constantly but as you can see the teacher is still human. We all rationalize our losses and then suffer the permanent guilt from never regaining the previous profits. Enough said. I could have bought them back for $.75 several times. I am not going to list how I got into and out of each trade this week but just the summary. I want to cut this short to respond to the many requests for "my" trading screen setup farther down. Calls bought and sold this week. The day is the day I opened the position. MON ATHM MAY-150 AHQ-EZ @ $21.00 sold $19.38 loss $ .63 MON EGRP MAY-90 QGZ-ER @ $27.88 sold $32.00 profit $ 4.13 MON AMTD MAY-110 TAZ-EB @ $31.00 sold $33.75 profit $ 2.75 MON NITE MAY-100 QTN-ET @ $30.00 sold $42.00 profit $12.00 MON CMGI MAY-300 GCB-EU @ $27.00 sold $29.00 profit $ 2.00 MON LXK MAY-110 LXK-EB @ $16.63 sold $16.13 loss $ .50 Dip buys on Tuesday (too soon!) TUE QCOM MAY-180 AAW-EP @ $27.13 sold $26.38 loss $ .75- TUE MFNX MAY-70 QFN-EN @ $17.00 sold $15.13 loss $1.87- TUE EGRP MAY-110 QGZ-ET @ $26.50 sold $23.25 loss $2.75- TUE AMTD MAY-110 TAZ-EB @ $28.69 sold $24.38 loss $4.31- Stock bought and sold: WED SHORT AMTD @ $127 bought @ $124.00 profit $ 3.00 WED BUY NITE @ $130 sold @ $140.00 profit $10.00 THR BUY NITE @ $145 sold @ $150.00 profit $10.00 Open positions: DELL MAY-50 DLQ-EJ @ $ .44 Target price $2.44 DELL stock @ avg of $41.38 ******************************************************* TRADING CONFIGURATION ******************************************************* I constantly get requests for what do I look at when I am trading. Basically I have my realtime Interquote window open and a new program from www.Quote.com called Qcharts. The Qcharts program has become my primary screen. The many features and realtime charts are just incredible. There maybe many more offerings on the net for professional traders but this program is great for the novice or intermediate trader. It appears to be idiot proof and simple to learn. It is still in beta testing but any quote.com user can still download it. It does take a subscription to get the realtime feed. This is how I have my screen set up. I apologize for the size of this image but I wanted you to be able to read it. I use a 21" monitor on my trading system and that is how this was captured. http://free.OptionInvestor.com/charts/image34.gif Each individual chart is adjustable for size, style, time, etc. You can have one chart or a dozen in any format you desire all running at once. I subscribe to the realtime feed so everything updates in realtime tick by tick. I load the charts for the stocks I am thinking about playing and I am ready to go. Every column in the quote frame is selectable. You can display over 100 different columns in any sequence you want including the comment field which is text you enter. I have the quote frame sort by the "net" for the day so the biggest gainer floats to the top. On the top bar the "T&S" function is a time and sales list of all the trades for any stock. The "orange flame" produces a realtime watch list of dozens of different lists. I like the list of "very recent gainers" which produces a continuously updating list of stocks that have made big gains in the last couple of minutes. It will alert you to a stock that is breaking out of a pattern with a strong move just as it starts. When it quits moving it drops off the list. The II is a Nasdaq level II quote screen. There are so many features it is impossible to list them all. The quotes are very fast since they are not browser dependent. I don't think I could trade without this program. You can't trade what you can't see! The charts also chart option symbols as well as stock and index symbols. Next week my Interquote setup. Jim http://www.qcharts.com/qcharts/beta/ ********************************************************* Market Sentiment - By Pinnacle Capital Advisors ********************************************************* Sunday, May 2, 1999 Ties Goes to the Runner In baseball, a tie goes to the runner; on Wall Street, a tie means we are at a key moment in the market. Many of our trusted technical and sentiment indicators are right at an apex including the Market Volatility Index (VIX), Pinnacle Index, the Russell 2000 index (RUT). What's more, many of the industry sectors are trading right at their respective 50-day moving averages. Last Thursday night (4/29) we alerted subscribers that the many industry sectors had violated their short-term moving averages and that the major broad market indices may soon follow. Keep an eye on individual sectors to see how they perform over the next couple of days. If these sectors fail to advance higher, it could serve as an early warning for continued sell-off of the broader markets. We have listed where the 50-day moving averages fall across the major market indices to help investors with the likely retracement points. Close 50dma ******************************* INDU 10,878 10,000 SPX 1,343 1,300 OEX 680 660 Separately, Pinnacle is concerned about the action of the Market Volatility Index (VIX). This key short-term indicator is challenging its moving average once again and will be bearish if the index close ABOVE this average and breaks the current trend. BULLISH Signs: Advance/Decline Line Recovering appears to be holding but beginning to roll over again. Pinnacle Index Excessive OTM call buying in check as evidence by our low Pinnacle Index BEARISH Signs: Market Volatility (VIX) After consolidating below its 50-day moving average (26.07), the VIX closed up sharply and could close soon over its 50-day moving breaking the current bullish trend. Russell 2000 Closed below key 435 level. If small cap sells off from here, the technical move will be viewed by many as negative since the Russell 2000 could not take out its prior high resulting in a "failed rally" Interest Rates Trading ABOVE 200dma and 5.50% Benchmark. (5.673%) 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% Friday, April 30 65,936 +114.8% * Market Sentiment at a Glance ******************************************************************** Friday Tues Thurs Indicator (4/23) (4/27) (4/29) Alert ******************************************************************** Pinnacle Index (OEX): ----------------------------------------------------------------- Overhead Resistance (680-695) 1.6 Underlying Support (645-660) 2.2 Put/Call Ratios: ----------------------------------------------------------------- CBOE Total P/C Ratio .5 CBOE Equity P/C Ratio .4 OEX P/C Ratio 1.9 Peak Open Interest (OEX): ----------------------------------------------------------------- Puts 650 Calls 720 P/C Ratio 1.18 Market Volatility Index (VIX): ----------------------------------------------------------------- CBOE VIX 26.07 * Investors Intelligence: ----------------------------------------------------------------- Bullish 56.1% * Bearish 30.7% * 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 (4/30) (5/4) (5/6) ----------------------------------------------------------------- Overhead Resistance (680-695) 1.6 OEX Close 675.65 Underlying Support (645-660) 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 holding at the OEX 645/660 level. Put/Call Ratio ----------------------------------------------------------------- Friday Tues Thurs Strike/Contracts (4/30) (5/4) (5/6) ----------------------------------------------------------------- CBOE Total P/C Ratio .53 CBOE Equity P/C Ratio .38 OEX P/C Ratio 1.92 Peak Open Interest (OEX) ----------------------------------------------------------------- Friday Tues Thurs Strike/Contracts (4/30) (5/4) (5/6) ----------------------------------------------------------------- Puts 650 / 11,650 Calls 720 / 9,915 Put/Call Ratio 1.18 Market Volatility Index (VIX) ----------------------------------------------------------------- Major Date Turning Point VIX ----------------------------------------------------------------- October 97 Bottom 54.60 July 20, 1998 Top 16.88 October 8, 1998 Bottom 60.63 January 11, 1998 Top 26.38 March 4, 1999 Bottom 28.15 April 30, 1999 26.07 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 April 28, 1999 56.1 30.7 * *************** Market Posture *************** Key Benchmarks Broad Market Bearish/Bullish Last Posture/Since Alert **************************************************************** DOW Industrials 9,750 10,000 10,789 Neutral 4.30 * SPX S&P 500 1,300 1,350 1,335 Neutral 4.29 OEX S&P 100 660 680 676 Neutral 4.29 RUT Russell 2000 390 435 433 Neutral 4.29 NDX NASD 100 2,075 2,250 2,136 Neutral 4.22 MSH High Tech 1,000 1,100 1,027 Neutral 4.22 XCI Hardware 900 920 882 BEARISH 4.29 CWX Software 600 650 635 Neutral 4.22 SOX Semiconductor 375 420 370 BEARISH 4.29 NWX Networking 450 490 507 BULLISH 4.22 INX Internet 550 700 586 Neutral 4.22 BIX Banking 675 720 719 Neutral 4.30 * XBD Brokerage 425 540 452 Neutral 4.14 IUX Insurance 630 655 636 Neutral 4.29 RLX Retail 900 970 884 BEARISH 4.29 DRG Drug 390 425 369 BEARISH 4.29 HCX Healthcare 780 850 752 BEARISH 4.29 XAL Airline 170 185 180 Neutral 3.30 OIX Oil & Gas 250 260 300 BULLISH 3.30 Posture Alert Unnerved by stronger than expected economic reports and selling in the treasury market, the equity market went on a wild ride before recovering in the final hour. We have turned Neutral across the Dow Jones Industrial average and the Banking sector after selling off nearly one percent. A detailed description of our Market Posture and its applications can be found at: /members/marketposture ************** Coming Events ************** Monday: Personal Income Mar Forecast: 0.3% Previous: 0.5% Personal Spending Mar Forecast: 0.4% Previous: 0.7% Construction Spend Mar Forecast: -0.2% Previous: 2.2% NAPM Index Apr Forecast: 54.2 Previous: 54.3 Tuesday: LJR Redbook 5/01 Forecast: -- Previous: -0.5% API Oil Stocks 4/30 Forecast: -- Previous: -4.73M Housing Completions Mar Forecast: -- Previous: 1.55M Leading Economic Ind Mar Forecast: 0.1% Previous: 0.2% Wednesday: Factory Orders Mar Forecast: 0.9% Previous: -2.5% NAPM Non-manuf Srvy Apr Forecast: -- Previous: 62.5 Thursday: Jobless Claims 5/01 Forecast: -- Previous: 294K Money Supply(M2) 4/26 Forecast: -- Previous: $33B Friday: Non-Farm Payrolls Apr Forecast: 225,000 Previous: 46,000 Unemployment Apr Forecast: 4.2% Previous: 4.2% Average Hourly Earns Apr Forecast: 0.3% Previous: 0.2% Wholesale InvestoriesMar Forecast: 0.3% Previous: 0.6% ********************************* REAL-TIME Stock an Option Quotes ********************************* We are constantly asked for our recommendations for a real time quote service for stocks/options/futures/indexes etc. We have reviewed many and give our strongest recommendation to Interquote. Their quotes are delivered in a fully customizable spreadsheet format with over 20 different data fields available. They offer tick by tick realtime, CONTINUOUSLY UPDATING, or delayed quotes for all exchanges. If you are considering the volatile world of option trading you will find realtime option quotes from Interquote a valuable resource. You can get a free trial from Interquote at this address. http://www.interquote.com/ ***************** HOW TO SUBSCRIBE ***************** We would like to have you as a subscriber. You may subscribe at any time but your subscription will not start until your free trial is over. The monthly subscription price is $39.95 The quarterly price is $99.95 which is $20 off the monthly rate. ****** To subscribe you may go to our website at www.OptionInvestor.com and click on "subscribe" to use our secure credit card server. You may also call us at 303-797-0200 and give us the information over the phone. You may also fax the information to: 303-797-1333 *********** DISCLAIMER *********** This newsletter is a publication dedicated to the education of options traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock or option but an information resource to aid the investor in making an informed decision regarding trading in options. It is possible at this or some subsequent date, the editor and staff of The Option Investor Newsletter may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The newsletter staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control.

The Option Investor Newsletter              5-2-99
Sunday                   2  of  6



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

Index     Last   Week
Dow    10789.04  99.37
Nasdaq  2542.85 -47.84
$OEX     675.65 -11.76
$SPX    1335.18 -21.67
$RUT     432.81   1.08
$TRAN   3647.29  57.61
$VIX      26.07   2.11

Stock            Week

RNWK     221.50  41.50 Splits 2:1 May 11th
NITE     153.19  36.26 Split Momemtum is strong
NTBK     189.00  13.50 New, splits 3:1 May 14th
EGRP     115.50  11.44 Splits 2:1 May 21st
VISX     128.75  11.06 New, splits 2:1 May 13th
COF      173.69   9.44 New, announced 3:1 split
IBM      209.19   9.44 New, splits 2:1 May 26th
QCOM     200.00   9.12 Splits 2:1 May 11th
BRCM      77.13   8.38 New, tech wreck survivor
MFNX      84.25   5.25 Splits 2:1 May 18th
FD        46.69   4.81 New, earnings are May 12th
TMX       75.75   4.19 New, good momentum
CTXS      42.50   3.81 Consolidated, ready to go again
HWP       78.88   1.76 Earnings are May 17th
LU        60.00   1.75 New, new bottom at $58???
ADBE      63.38  -0.12 Dropped, not moving
ANF       94.81  -1.06 Earnings May 11th, Split cand.
CMVT      64.13  -1.07 Look for breakthrough
MDT       71.94  -1.75 New, channelling stock
DELL      41.19  -1.81 Earnings May 18th
EMC      108.94  -2.07 Splits 2:1 June 1st
FDX      112.75  -2.32 Splits 2:1 May 6th
CSCO     114.06  -3.30 Earnings May 11th, Split cand.
SUNW      59.81  -3.50 Time for Tech rebound
WMT       46.00  -4.94 Entry point with $44 bottom
YHOO     174.69 -13.00 Dropped, lack of enthusiasm

Puts

MSPG      96.94 -11.31 New, earnings over, support @ $80
ELN       51.63  -8.12 Hitting new lows!
LOW       52.75  -6.82 Downgrades hurt, 200 dma @ $46
GIS       73.12  -6.38 New, closed under it's 200 dma
BMY       63.56  -3.50 New, drug sell-off continues
NSOL      77.75  -2.25 Still under pressure
FNM       70.94  -1.11 Still bouncing off the top
MU        37.25  -0.63 Dropped, may have found a bottom
PG        93.81   3.31 Dropped, not performing
DD        70.68   3.75 New, earnings over, where is support?



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

MDT  - Medtronic   (rolling stock)
VISX - Visx, Inc
BRCM - Broadcom
IBM  - IBM
LU   - Lucent
NTBK - NetBank
TMX  - Telefonos de Mexico
FD   - Federated Dept Stores
COF  - Capital One Financial

PUTS: 

GIS  - General Mills
DD   - DuPont
BMY  - Bristol Meyers
MSPG - Mindspring
 
***************************
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:

YHOO $174.69 (-13.00) Don't get us wrong.  We still like 
YHOO's business model and its prospects for future growth 
as an Internet leader - in short, a good long-term and even 
short-term speculative hold, but a poor option trade.  
Unfortunately with no earnings or split news to look 
forward to, there is nothing to light investor's fire, let 
alone carry the torch for the sector right now.  While it's 
currently cast adrift as just another stock, we need to 
drop it from the call list until YAHOO's "message-in-a-
bottle" comes ashore again.

ADBE $63.38 (-.12)  We picked up Adobe as a momentum play 
when it broke through resistance at around $60. It performed well 
for us until Wednesday, when it hit a new 52-week high. However, 
it moved lower at the end of the day and it did not perform well 
Thursday or Friday, so we are dropping it as a play. For those of 
you in the stock, be aware that ADBE suffered partly as a victim 
of the rotation out of techs and partly just because it was due 
for a rest. (It had been up 6 days in a row until late Wednesday.) 
It may very well resume its climb next week, but we are moving on 
to other plays.


PUTS: 

PG $92.81 +.31 (+2.31) PG has been a stock with two minds this
week.  We got what we were initially looking for as the stock 
traded up to its 50-dma around $95 only to run into resistance.
That brought sellers back into the picture to drive the stock 
lower for the next few days.  But today's rebound after a early
morning sell-off questions the logic of continuing our play.  We
feel that the more than 10% sell-off from recent highs may have
sparked interest by bargain hunters.  For this reason, we are no
longer recommending new plays for PG. 

MU $37.25 (-.63)  On Friday, Dow reported that ABN AMRO 
cut its month old "buy" rating on MU to "outperform". 
Technically Micron is still weak and DRAM prices remain 
so low that Micron will be hurting for a while. However, 2 
analysts have made slightly positive changes in their coverage 
of the stock and it rose temporarily on the news. A third upgrade 
might strike this one out, so we are dropping MU. 




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

PVN  - Providian
MWD  - Dean Witter
ANF  - Abercrombie & Fitch
YHOO - Yahoo
CSCO - Cisco Systems

 

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

Symbol - Stock      Splits/Date  

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 current play
RNWK - RealNetworks    2:1 05-10-99 ex-date 05-11 current play
VISX - Visx Inc        2:1 05-12-99 ex-date 05-13 current play
COX  - Cox Comms       2:1 05-13-99 ex-date 05-14
NITE - Knight-Trimark  2:1 05-14-99 ex-date 05-17 current play
NTBK - NetBa@nk        3:1 05-14-99 ex-date 05-17 current play
PMCS - PMC-Sierra      2:1 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 current play
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 current play
ETH  - Ethan Allen     3:2 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 current play
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28 
EMC  - EMC Corp        2:1 05-28-99 ex-date 06-01 current play
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 06-01
CNET - CNET, Inc.      2:1 05-28-99 ex-date 06-01
COF  - Capital One     3:1 06-01-99 ex-date 06-02 current play
EL   - Estee Lauder    2:1 06-02-99 ex-date 06-03
FON  - Sprint          2:1 06-04-99 ex-date 06-07
TBFC - Telebanc        2:1 06-08-99 ex-date 06-09
LXK  - Lexmark         2:1 06-10-99 ex-date 06-11
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
SCH  - Schwab          2:1 07-01-99 ex-date 07-02

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 ! 

******
FDX - Federal Express $112.75 (-2.31)(+9.68)

See details in sector list

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

******

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

******

QCOM - QUALCOMM Inc. $200.00 (+9.13)(+48.38)

See details in sector list

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

******

RNWK - RealNetworks $221.50 (+41.50)

See details in sector list

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

******
VISX - Visx, Inc. $128.75 (+11.06)

See details in sector list

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

******

NITE - Knight Trimark Group $153.19 +7.78 (+36.25)

See details in sector list

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

******

NTBK - NET.B@NK Inc $189.00 (+13.50)

See details in sector list

Chart = http://quote.yahoo.com/q?s=visx&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 $41.19 (-1.81)($4.75)(P5W +3.94)

See details in sector list

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

******

CTXS - Citrix Systems, Inc $42.50 (+3.81)(+8.44)

See details in sector list

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


******

CSCO - Cisco Systems, Inc $114.06 (-3.32)(+11.69)

See details in sector list

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



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

FNM - Fannie Mae $70.94 (-1.37) (currently a PUT)

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. 

FNM started the week by reversing at its upper range, just
as planned.  But then, Thursday saw FNM trade as high as 
$73.31 before closing up $1.50.  Ironically, FNM closed on 
Friday at the exact same price it closed Wednesday.  The play 
is still in tact as FNM is still within its channel.  There 
is very strong support at $66, so make sure to sell before 
this point.  Any rise and reversal in the $72.50 range would be
a good entry point.  Financials in general should be a bit
week after the strong GDP numbers.

BUY PUT MAY-70*FNM-QN OI=1477 at $1.69 SL=0.75
BUY PUT MAY-75 FNM-QO OI= 141 at $4.88 SL=2.50 ITM $4.06

Average daily volume = 2.68 mln.
Chart = http://quote.yahoo.com/q?s=FNM&d=3m

*****

MDT - Medtronic, Inc. $71.94 (-1.75) (currently a CALL)

Medtronic sets the pace as the world's #1 maker of implantable 
biomedical devices, including the most prescribed pacemaker. 
The company's product lines focus primarily on improving 
cardiovascular and neurological health.  Its pacing products 
(nearly two-thirds of sales) include bradycardia devices (which 
pace slow or irregular heartbeats) and tachyarrhythmia devices 
(which correct rapid heartbeats).  Medtronic also makes spinal 
implant devices, mechanical and tissue heart valves, 
implantable neurostimulation and drug-delivery systems, 
perfusion blood systems, and catheters used in angioplasties. 
It is developing products for minimally invasive cardiac 
surgery and leep apnea. (from Hoover's Online)

We are adding MDT as another channeling stock.  For over the 
last month and a half, MDT has channeled in a $6 range.  The
range has a gradual upward bias.  Currently the upper range
is in the $75.50 to $76 range.  The lower limit is around
$70.  This can be played one of two ways; either wait for a
bounce off the $70 level and buy a call, or wait for a 
reversal in the $76 range and buy a put.  The latest swings
have occurred about every week, but we all know this can
change at any time.  We are about in the middle of the
drop, so don't jump in on Monday morning unless one of the
limits is hit. (This is a good stock to target shoot your
way in)

BUY CALL MAY-70 MDT-EN OI=1344 at $3.88 SL=2.00 
BUY CALL MAY-75*MDT-EO OI=4067 at $1.63 SL=0.75 

Average daily volume = 3.16 mln
Chart = http://quote.yahoo.com/q?s=MDT&d=3m

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

NITE - Knight Trimark Group $153.19 +7.78 (+36.25)

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 bucked the trend this week from the online brokers and 
the NASDAQ as it powered ahead in advance of the upcoming 2-for-1 
split.  That's a more than 30% move.  It has also been helped 
along by upgrades from 3 brokerage houses during the past week.  
On Tuesday we noticed support at $125 during a pullback.  That 
level held and produced a nice pop to end the week at a new 
closing high.  The momentum on this stock has been phenomenal.  
That usually means its a good time to use caution before opening
a new play.  The premiums are now steep making this a high risk 
play.  Remember to use the stops losses to lock in profits 
and prevent losses.

The big news on NITE came Wednesday when the CEO hinted that
business continues to boom.  He is quoted as saying "Transactions 
are running well ahead of last quarter" and "the last 5 trading
days are the high water mark."  Not bad considering in Q1 they
nearly doubled First Call's estimate of .39 cents by reporting
.67 cents.  

BUY CALL MAY-150 TNW-EJ OI=411 at $21.38 SL=16.50
BUY CALL MAY-155 TNW-EK OI=  1 at $19.12 SL=13.50 vol=162 Fri.
BUY CALL MAY-160*TNW-EL OI=357 at $15.75 SL=11.50 
BUY CALL JUN-160 TNW-FL OI=  4 at $26.50 SL=20.50 

Picked on Apr.27th at $126.88  PE = 104.92
Change since picked    +26.31  52 week low  =$  4.50
Analysts Ratings	  5-1-1-0-0  52 week high =$161.50
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

******

RNWK - RealNetworks $221.50 (+41.50)

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)

RNWK has been very impressive this last week.  With the
negative trading in Tech stocks, one would think RNWK would
have traded down on the week, not so.  RNWK gained over $40.
Two things seem to have led to the rise; number one, RNWK
splits on the 11th of May; second, RNWK is in a phase of
tremendous growth.  Every day a new event is announced that
will be broadcast over the net, and sure enough, RNWK is the
technology being used.  We do need to be careful about being
to sure of a play.  We would assume that any bounce in the
NASDAQ should benefit RNWK, but make sure your stops are in
order.   

We have heard rumors that RNWK will be announcing some
big deals this next week.  This will most likely be part of
their annual RealNetwork conference in San Francisco the 5-
7th.  We don't know what this will consist of, but these
types of conferences usually give a boost to the stocks
involved.

BUY CALL MAY-210 RNW-EB OI=309 at $39.63 SL=30.00
BUY CALL MAY-220 RNW-ED OI=668 at $35.38 SL=27.00 
BUY CALL MAY-230 RNW-EF OI=480 at $31.25 SL=24.00 
BUY CALL JUN-230 RNW-FF OI= 25 at $47.63 SL=36.00
BUY CALL JUN-240 RNW-FU OI= 11 at $43.75 SL=31.50 

Picked on Apr.27th at $181.13   PE = n/a
Change since picked    +40.37   52 week low =$ 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 = 1.44 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m

******

NTBK - NET.B@NK Inc $189.00 (+13.50)

Net.B@nk is the largest FDIC-insured bank operating solely 
on the Internet. It has over 25,000 customers from all 50 
states and 20 foreign countries.  The bank has made its mark 
in history by being the first profitable Internet-only bank 
in the US.  Currently, they have over $280 mln in assets. 
They're continually expanding their financial services and 
are accessible to customers 24 hours a day and 7 days a week. 
Net.B@nk can be reached by PC, ATM, phone, or even by mail.

The anticipation of the powerful 3:1 stock split scheduled 
for May 14th is beginning to brew. On Thursday this stock 
didn't look for market guidance, but instead, took it upon I
itself and kept $7.94 in gains.  With the NASDAQ on its side 
Friday, NTBK tacked on another $13.50 - a solid 7.7% increase! 
Let's talk about technicals.  The chart shows a choppy, but 
general uptrend.  At this point, the 10 dma at $170 and any 
resistance that was around $178-180 has been surpassed.  Ahead 
is the 52-week high of $249. Time will tell if enough excitement 
can be generated to climb over that wall. This is purely a 
split-play, but aggressive no matter how you look at it. For 
instance, on April 13th when the company first announced the 
3:1 stock split, NTBK spiked up 76.52 points only to dive -63.03 
the following day.  This is a perfect example of the importance 
of using stops!  HIGH RISK PLAY.

Others in Internet banking are also reaping profits and cashing 
in on investor enthusiasm.  Recently, both TBFC and EGRP 
announced 2:1 stock splits. Net.B@nk took another step this 
week towards becoming a full-service banking institution.  
They will now offer a full array of consumer lending products 
including low-cost home equity and auto loans.  PCN Bank Corp 
was chosen to handle the loan processing and servicing for this 
new consumer loan offering. 

BUY CALL MAY-190 NNB-ER OI=140 at $27.63 SL=21.50
BUY CALL MAY-195 NNB-ES OI=113 at $25.50 SL=20.00
BUY CALL MAY-200*NNB-ET OI=459 at $23.75 SL=18.50
BUY CALL MAY-210 NNB-EB OI=230 at $20.63 SL=16.00
BUY CALL JUN-195 NNB-FS OI= 24 at $40.25 SL=31.50

Picked on May 2nd at $189.00   PE = 218
Change since picked    +0.00   52 week low =$10.75
Analysts Ratings   2-0-1-0-0   52 week high=$249.00
Last earnings 4/99  est= .09   actual= .09 
Next earnings 7-20  est= .11   versus= .04
Average daily volume = 899.5K
Chart = http://quote.com/q?s=ntbk&d=3m

*****

EGRP - E*Trade $115.50 (-11.44)(+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.

Well, it could have been worse.  EGRP finished down just 
$0.50 on Friday on slightly heavier than average volume.  
Technically, a close at or above support of $115-$116 is a 
win our book, especially since it closed well off its 
intraday low of $107.  It's just normal that investors make 
decisions on Friday not to take these home for the weekend.  
Market willing, we could see renewed interest in the sector 
on Monday.  More importantly, EGRP splits 2:1 on May 21, 
which should spur the price higher in the days to come.  
However, since the split is 3 weeks away, there is plenty 
of time to take a position.  Target shooting works well 
here or wait for a clean break over $122 with volume.  
Either way, confirm market direction before playing.  This 
is still a high-risk, Internet play, even though it's "just 
a broker".

Huge news of the week came out last Monday: E*Trade 
announced 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.  In other news, EGRP now has a 
listed S&P 500 Index symbol that can be traded.  The new 
symbol is ETSPX.  Also noteworthy, E*Trade Australia 
announced 13,000 new investors since its inception 1 year 
ago.

***Due to high volatility, we offer no odd strike prices.

BUY CALL MAY-110 QGZ-EB OI=2065 at $15.00 SL=11.75
BUY CALL MAY-120*QGZ-ED OI=1709 at $10.25 SL= 7.75
BUY CALL MAY-130 QGZ-EF OI=1408 at $ 7.38 SL= 5.50
BUY CALL JUN-120 QGZ-FD OI= 586 at $18.50 SL=14.50
BUY CALL JUN-125 QGZ-FE OI=  12 at $16.38 SL=12.50

Picked on April 26 at $119.44    PE =n/a
Change since picked     -4.44    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 = 7.4 mln. 
Chart = http://finance.yahoo.com/q?s=EGRP&d=3m


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

PLAYS CONTINUED IN SECTION THREE.

******************************
SEE DISCLAIMER IN SECTION ONE
******************************
The Option Investor Newsletter          5-2-99
Sunday             Part 3 of 6

******************************
INTERNET - Continued
******************************

BRCM - Broadcom $77.13 (+8.38)

Frustrated with how slow the internet can be at times? Here is a 
stock for you. Broadcom Corporation, a semiconductor company
based in Irvine, CA, supplies highly integrated, system-level
silicon solutions that enable broadband communications delivery
to homes and businesses.  Its products enable high-speed
transmission of data over existing wires not originally designed 
for digital data transmission. BRCM dominates the broadband cable 
set-top box market as well as the xDSL(digital subscriber line) 
broadband side, so it is playing BOTH sides of the faster Internet 
game at the same time. It has developed integrated circuits for 
cable modems, high speed networking, and satellite and terrestrial 
digital broadcast. BRCM chips provide a better image on the TV 
screen, eliminating fuzziness, sharpening graphics, and providing 
studio-quality text.

On April 21st, BRCM reported earnings that were $.05 above 
expectations on incredible revenue growth of 173%. Preferred 
Capital Markets upgraded it to "buy" from "accumulate", and the 
stock took off. Broadcom and Lucent(LU) both make high speed 
network chips and they were both negotiating with Epigram, which 
makes chipsets for high speed networking over ordinary phone 
lines. Last month, LU got the upper hand when it licensed 
Epigram's video and voice broadband technology and agreed to 
collaborate on a next-generation home net-working standard. Then 
BRCM one-upped LU by BUYING Epigram for $316 mln in stock. 
Epigram's technology is better than its competitors and will 
probably become the next networking standard. Now BRCM has the 
inside track to dominate the emerging high growth home networking 
market, supplying large amounts of voice, video, and data 
transmission simultaneously, and at high speeds. 

At the H&Q conference, CEO Henry Nicholas said he hopes to see 
layer 3 unified business LANs at layer 2 prices by year's end. 
(BRCM's pending Maverick acquisition will help drive these prices 
down). Also by year-end, BRCM will offer a single chip on digital 
set-top boxes. Always on the cutting edge, BRCM plans to enable 
the use of cable as the communications conduit of choice through 
video telephony and Internet access. Last week, after a drop 
caused by rotation out of technology stocks, BRCM added $4.63 on 
Friday on twice its average volume. It is a chip maker, but also 
an Internet company, so expect volatility in these shares.

BUY CALL MAY-75 RCQ-EO OI=1570 at $ 6.88 SL=5.00
BUY CALL MAY-80*RCQ-EP OI=1117 at $ 4.50 SL=2.75
BUY CALL MAY-85 RCQ-EQ OI= 579 at $ 2.81 SL=1.75
BUY CALL JUN-80 RCQ-FP OI= 268 at $ 7.88 SL=6.00
BUY CALL AUG-85 RCQ-HQ OI= 556 at $11.00 SL=8.75

Picked on Apr 25th at  $77.13      PE = 142
Change since picked   +$ 0.00      52 week low =$23.50 
Analysts Ratings    3-6-1-0-0      52 week high=$95.63
Last earnings  4/21  est 0.14   actual 0.19 surprise=+36%
Next earnings  7-21  est 0.18   versus 0.08
Average daily volume = 1.64 mln
Chart = http://quote.yahoo.com/q?s=brcm&d=3m

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

DELL - Dell Computer $41.19 (-1.81)($4.75)(P5W +3.94)

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.

Dell will be the last of the large-cap techs to report 
earnings due after the close May 18, just 2.5 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, 
especially while the rest of the NASDAQ is retreating.  
Even so, support was found at $40 (30 DMA) in Friday's 
action.  Following 3 days of NASDAQ sell-off and mild gains 
in the face of weekend profit taking, now's the time to 
scale into a position, as Dell could march up to $45 by May 
18.  It appears Compaq's woes were Compaq related following 
great earnings from IBM and other members of the tech 
sector.  New surveys by Dataquest and IDC continue to 
remind Wall Street that Dell's computer shipments are 
growing at a 50% annual rate (far exceeding the 38% sales 
growth of last quarter if the industry ASP remains stable), 
usurping IBM as the #2 seller.  At their current rate of 
growth, they could replace CPQ at #1 by the end of the 
year.  Careful.  MAY-45 OI = 84979 contracts, indicating 
strong resistance at this level.  Confirm market direction 
and remember to use stops.

At the Hambrecht and Quist conference last week, Dell's 
CFO, Tom Merideth said the Dell's consumer PC sales, which 
make up 5% of the company's sales, are showing 6 to 9 times 
the rate of the growth of the industry, and that sales to 
China were up over 100% and increasing.  While still 
heavily supporting the Wintel standard, Dell is shaping up 
to be a big Linux supporter too, as it will ship servers 
using the UNIX-based platform.

BUY CALL MAY-40*DLQ-EH OI=45921 at $4.00 SL=2.50
BUY CALL MAY-45 DLQ-EI OI=84979 at $1.94 SL=1.00
BUY CALL JUN-40 DLQ-FH OI= 4663 at $5.38 SL=3.50
BUY CALL JUN-45 DLQ-FI OI=10470 at $3.25 SL=1.50

Picked on April 18 at  $38.25   PE=81 
Change since picked     +2.94   52 week low =$16.56
Analysts Ratings 10-13-11-0-0   52 week high=$55.00
Last earnings   02/99 est .16   actual .16
Next earnings   05-17 est .16   versus .11
Average Daily Volume = 46.5 mln.
Chart = http://quote.yahoo.com/q?s=DELL&d=3m

******

SUNW - Sun Microsystems $59.81 (-3.50)(+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. 

Finally, it looks like the 3 days of bloodletting on the 
NASDAQ came to an end on Friday.   So too, SUNW halted its 
slide by gaining back $2 following those same 3 down days.  
Like the rest of the tech stocks, SUNW's chart isn't so hot 
right now.  It's real strength was Friday's $2 gain on very 
light volume, indicating a lack of sellers at these prices, 
coupled with a reversal of the dip below its 30 DMA (though 
it hasn't completely cleared that hurdle yet).  SUNW never 
remains at the base of the mountain for long and has a good 
history of strong ascents from here.  Fundamentally, SUNW 
has a strong model too and executes well.  Market willing, 
SUNW has lots of room to run, as resistance is way up at 
$72.  As always, confirm market direction before playing.

In the news, while the spotlight shines on Microsoft's 
deposition of a senior Sun executive regarding its alliance 
with Netscape in hopes that Sun's testimony can bolster 
MSFT's defense against the DOJ's charges, the real action 
is taking place in the AT&T bid for MediaOne.  In order for 
AT&T to lock up a huge chunk of the cable market, which 
would be used for conversion to a high bandwidth 
communications network, Sun's operating system is a 
necessary ingredient.  Sun will benefit substantially, as 
its operating system would become the set-top box standard 
in AT&T's domination of the cable market.  Guess who loses 
substantially?  Right.  Microsoft and AOL.  To that end, 
they have both signed confidentiality agreements with 
MediaOne, presumably to prepare a competitive bid in hopes 
of thwarting an "unholy" alliance of Sun/AT&T.  While Sun 
isn't directly in the spotlight here, the outcome of this 
battle of the titans will have a big impact on its future.

BUY CALL MAY-55 SUQ-EK OI=6953 at $6.75 SL=5.00
BUY CALL MAY-60*SUQ-EL OI=5808 at $3.38 SL=1.75
BUY CALL MAY-65 SUQ-EM OI=9290 at $1.50 SL=0.75
BUY CALL JUN-60 SUQ-FL OI= 915 at $5.63 SL=4.00
BUY CALL JUN-65 SUQ-FM OI=1889 at $3.38 SL=1.50

Picked on April 22 at $63.44    PE = 46
Change since picked    -3.63    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 = 15.8 mln.
Chart = http://quote.yahoo.com/q?s=SUNW&d=3m

******

HWP - Hewlett-Packard $78.88 (+1.75)(+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 $83.88 in early February, but pulled back from that 
high. Technically, it began to look positive again in early to 
mid April, and over a week ago, it pushed above all its major 
moving averages. Big Blue was the catalyst with its incredibly 
strong earnings announcement. 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 2 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.

On Friday, Steve Milunovich at Merrill Lynch upped his earnings 
estimate for the second quarter from $.79 to $.82. He also said 
that momentum is improving into the second half and that his 8-10% 
growth outlook might be low. HWP is shedding its conservative 
image by becoming a more responsive, agile competitor in the tech 
arena. Deals with the likes of Broadvision, Ariba, BEA, and Tower 
Technologies will help it compete in e-commerce and other areas 
against the Netscape/Sun team.

BUY CALL MAY-75 HWP-EO OI=9715 at $6.00 SL=4.25
BUY CALL MAY-80*HWP-EP OI=7750 at $3.13 SL=1.50
BUY CALL MAY-85 HWP-EQ OI=3922 at $1.31 SL=0.50
BUY CALL JUN-80 HWP-FP OI=1594 at $4.75 SL=3.00
BUY CALL JUN-85*HWP-FQ OI= 392 at $2.75 SL=1.50

Picked on Apr 25th at $77.13       PE = 26
Change since picked  +$ 1.75       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

*****

IBM - IBM Corp. $209.19 (+9.44)(+29.37)(P3W -2.00)

Anybody not know what IBM does?  No?  Good.  Just in case, 
IBM is the granddaddy of the modern-day technology 
business.  They develop, make and sell new technology, 
solutions, products including mainframes and PC's, computer 
services, software and finance all of it.

Wow!  What a change from 2 weeks ago when we listed IBM as 
a put!  Since then, IBM has blown away analyst earnings 
expectations on the strength of its software business, 
received upgrades by 2 firms to "buy" and "strong buy", 
increased its dividend by 9% and announced a $3.5 bln. 
share repurchase (about 17 mln. shares at current prices, 
or 1.87% of the outstanding).  The only thing missing is a 
split.  Guess what?  Split happens!  Actually, they made 
the announcement back on January 26, but needed shareholder 
approval, which they got last week.  The official 2:1 split 
date is May 26.  There is still time to scale your way into 
a position.  Last week, IBM bounced off $204 every time, 
forming a nice base of support.  Target shoot the price to 
get a better entry.  Remember to use stops and confirm 
market direction before playing.

Lots of interesting tidbits in the news, however, none will 
move the price.  FYI, the Lawrence Berkeley National 
Laboratory in California has awarded IBM a contract for a 
new supercomputer, which when fully implemented will rank 
as 1 of the top 10 fastest computers in the world with 
speeds up to 3 trillion calculations per second.  Over the 
5-year contract, IBM will earn $33 mln.  Unfortunately for 
shareholders, the glory is in the prestige, not the 
earnings potential.

BUY CALL MAY-200 IBM-ET OI= 5917 at $13.00 SL=10.50
BUY CALL MAY-210 IBM-EB OI=12855 at $ 6.88 SL= 5.00
BUY CALL MAY-220 IBM-ED OI= 5881 at $ 3.25 SL= 1.50
BUY CALL JUN-210 IBM-FB OI= 2210 at $11.25 SL= 9.00
BUY CALL JUN-220*IBM-FD OI= 1915 at $ 7.00 SL= 5.25

Picked on May 2 at    $209.19    PE=29
Change since picked     +0.00    52 week low =$106.00
Analysts Ratings   11-8-4-0-0    52 week high=$215.25
Last earnings  04/99 est 1.41 actual 1.55 Surprise=9.9%
Next earnings  07-20 est 1.75 versus 1.50
Average Daily Volume = 5.4 mln.
Chart = http://quote.yahoo.com/q?s=IBM&d=3m

******

EMC - EMC Corp. $108.94 (-3.87)

EMC can emcee your memory. EMC is the #1 maker (ahead of IBM) 
of mainframe computer disk memory hardware and software. 
The company makes RAID (redundant array of independent disks) 
memory storage and retrieval systems for larger mainframe 
computers as well as desktop PCs.  EMC markets its memory 
products under the name Symmetrix.  Other products let users 
manage remote data and share information across networks of 
different computers.  EMC continues to broaden its product 
portfolio, strengthen alliances, and expand its global 
presence to create more platform-independent systems.
(from Hoover's Online)

We mentioned Thursday that the absolute bottom for EMC was
around $95, but that $100 was more likely.  On Friday, EMC
bounced off of $105 and seems to be have built a base at 
that level.  EMC bounced over $4 from its low on Friday.  
EMC has been part of a dropping in growth stocks over the
last few weeks.  We feel this trend has subsided a bit and
EMC should be a strong benefactor when investors start looking
at the best growth stocks again.  Remember, EMC was near $135
early in the month of April.  

Not much news on EMC, but every day brings us closer to its
stock split.  Most stock split runs start about 2-3 weeks
before the split.  EMC's stock split is on June 1st.  If we
see a bounce in the NASDAQ, we feel EMC will be one of the
strong movers.  

BUY CALL MAY-105 EMB-EA OI=1243 at $ 8.88 SL=6.25
BUY CALL JUN-105 EMB-FA OI= 414 at $12.50 SL=9.75
BUY CALL JUN-110*EMB-FB OI=1052 at $10.38 SL=8.00
BUY CALL JUN-115 EMB-FC OI= 515 at $ 8.13 SL=6.25

Picked on Apr.29th at $107.13    PE = 54
Change since picked     +1.81    52 week low =$ 40.19
Analysts Ratings    9-6-2-0-0    52 week high=$134.94
Last earnings  04/99 est 0.40    actual 0.41 
Next earnings  07-22 est 0.48    versus 0.36
Average daily volume = 4.69 mln
Chart = http://quote.yahoo.com/q?s=EMC&d=3m

*****

CTXS - Citrix Systems, Inc $42.50 (+3.81)(+8.44)

Citrix provides application server products and technologies 
that allows 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.

This week was mixed for CTXS.  The first two days the stock 
spiked up $5.50 (14%), but then it took a breather.  CTXS 
consolidated during the NASDAQ havoc, but only in a mild 
fashion.  The stock shed a mere -1.69 over a 3-day period.  
Technicals are positive and the stock is still 4-5 points 
above it's 10 dma.  After the substantial advances 
CTXS has made, it is reasonable to anticipate some 
consolidation.  But it's usually a good idea to wait for a 
decisive bounce before you initiate a new play.  Now an 
aggressive player may decide to use this lag as a profitable 
entry point.  The decision is always yours.  If upward pressure 
starts again next week, CTXS has overhead resistance at it's 
52-week high of $53.75.  (Look at the 10 day chart, might be
new bottom at $42)

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.  And for 
the new readers, last week Needham & Co rated CTXS a "strong buy" 
and AG Edwards gave the stock a "buy" rating.

BUY CALL MAY-35 XSQ-EG OI=1382 at $8.25 SL=6.50 ITM $7.50
BUY CALL MAY-40 XSQ-EH OI= 890 at $4.38 SL=2.75
BUY CALL MAY-45*XSQ-EI OI=1231 at $1.75 SL=1.00
BUY CALL JUN-40 XSQ-FH OI= 705 at $5.88 SL=4.25
BUY CALL JUN-45 XSQ-FI OI= 937 at $3.88 SL=2.50

Picked on April 25th at $38.69   PE = 46
Change since picked      +3.81   52 week low =$23.12
Analysts Ratings     6-2-0-0-0   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

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

CSCO - Cisco Systems, Inc $114.06 (-3.32)(+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

On Friday, The NASDAQ reversed and Cisco got the boost it 
needed. CSCO led the way gaining $4.88 and demonstrated its 
strength by closing near its daily high. I'm sure the bullish 
comments by Chris DePuy of Morgan Stanley effected some 
influence as well.  He reiterated his "strong buy" rating on 
CSCO and maintained a target price of $135.  The stock's 52-week 
high is only points away at $120, but it faces true opposition at 
$117-118.  Definitive confirmation would be for CSCO to break 
that barrier.  There are two main elements to consider in this 
play.  First are earnings. The company confirmed they would report 
on May 11th after the bell and according to analyst, Chris DePuy,
earnings should be "strong, rather than seasonably weak as the 
company expected".  Second, the potential of a split announcement 
may generate some added excitement next week.  Cisco had split 
3:2 in September 1998 at around $100.  Since the stock is now 
well above that old marker and the company has 2.7 bln shares
authorized and 1.6 bln outstanding, there is certainly enough 
for another 3:2 stock split.  Whatever the outcome may be, 
remember OI never recommends holding over an earnings report.  
Only a very aggressive player would consider this move - betting 
on a split announcement to keep the stock pumped up (we feel it
is still too risky).

Cisco was busy this week making crucial alliances. On Wednesday, 
Cisco announced they will acquire Amteva Technologies in a $170 
mln deal.  This is their latest in strategic moves to improve 
sending data over a single Internet-based network.  Also in the 
news, General Instruments and Cisco will collaborate on a dual-
return cable modem solution which allows for Radio Frequency and 
Telephone return paths to exist over a single line.

BUY CALL MAY-110 CYQ-EB OI= 8188 at $8.00 SL=6.25
BUY CALL MAY-115*CYQ-EC OI=10288 at $5.13 SL=3.25
BUY CALL MAY-120 CYQ-ED OI=11849 at $3.00 SL=1.50
BUY CALL JUN-115 CYQ-FC OI=  785 at $7.88 SL=6.00
BUY CALL JUN-120 CYQ-FD OI= 1420 at $5.75 SL=4.00

Picked on April 25th at $117.38   PE = 142
Change since picked       -3.32   52 week low =$ 41.12
Analysts Ratings    15-14-2-0-0   52 week high=$120.00
Last earnings    1/99  est= .33   actual= .34 surprise= +3.03%
Next earnings    5-11  est= .37   versus= .30
Average daily volume = 14.6 mln
Chart = Http://quote.yahoo.com/q?csco&d=3m

******

LU - Lucent Technologies, Inc $60.00 (+1.75)

Lucent Technologies is the world's largest telecommunication 
equipment and software maker. They are a spin-off of AT&T. 
Lucent  furnishes wireline and wireless access, local, long 
distance, and international voice, data and video services 
and even cable. AT&T presently accounts for about 15% of 
Lucent's sales.

Along with the rest of the tech stocks, LU was primarily down 
this week.  Then on Friday, the stock turned on a dime and 
managed to keep a $1.75 gain.  A very impressive move since it 
ignored the DOW's sentiment for the day. Considering analysts'
forecasts are positive for a full-fledged tech rally this may 
be a good entry point.  However, a more conclusive sign of LU's
direction would be for it push through its proximate resistance 
at $62-63 and stay above its 10 dma of $59.  The double 
bounce off $58 on Thursday and Friday is very encouraging.
Let us hope it can hold it.

On April 22nd, Lucent reported stronger-than-expected earnings 
at .17 p/s beating the .15 consensus expected by First Call.  
The company also announced they had doubled their 2Q profits and 
reiterated their high expectations for the second half of 1999.  
The following day rumors resurfaced regarding the possibility 
of Lucent buying 3Com despite its recent acquisition of Ascend.  
With 3Com's technology merging voice and data, such a deal would 
give Lucent the opportunity to go head-to-head with Cisco.  Just
on Monday, Lucent unveiled a new product geared towards the 
"next generation" Internet users.  The IPWorX is expected to 
ease Web congestion and allow for faster downloading off the 
Internet. It will be available to ISP providers on July 1st.

BUY CALL MAY-55 LU-EK OI= 7732 at $6.25 SL=4.50 ITM $5.00
BUY CALL MAY-60*LU-EL OI=19389 at $2.81 SL=1.50
BUY CALL MAY-65 LU-EM OI=15487 at $1.00 SL=0.00
BUY CALL JUN-60 LU=FL OI= 1326 at $4.88 SL=3.25
BUY CALL JUN-65 LU-FM OI= 1972 at $2.50 SL=1.25

Picked on May 2nd at  $60.00     PE = 80
Change since picked    +0.00     52 week low =$26.68
Analysts Ratings 9-12-11-0-0     52 week high=$67.00
Last earnings 3/99  est= .15     actual= .17 surprise= 13.33%
Next earnings 7-22  est= .23     versus= .16
Average daily volume = 14.1 mln
Chart = http://quote.com/q?s=lu&d=3m

*****

CMVT - Comverse Technology, Inc. $64.13 (-1.07)(+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 had an up and down week and finished just about a dollar
negative.  This is no surprise with the way the market acted
all week.  We feel CMVT is poised to continue higher, market
permitting.  CMVT has a short interest ratio of 5, which 
could supply a nice short squeeze if we get a nice bump in
the stock.    

There is some resistance in the $66 range.  A break through
this level on strong volume could supply a very nice break-
out.  There is support at the site of CMVT's 10 and 20-dma
at around $62.  Be patient and wait for the opportune time
to play.

BUY CALL MAY-60*CQV-EL OI=63 at $6.13 SL=4.25 ITM $4.13
BUY CALL MAY-65 CQV-EM OI=67 at $3.50 SL=1.75 
BUY CALL JUN-60 CQV-FL OI=37 at $8.75 SL=6.50 ITM $4.13
BUY CALL JUN-65 CQV-FM OI= 8 at $5.25 SL=3.50 

Picked on Apr.25th at $65.19  PE = 34
Change since picked    -1.06  52 week low =$19.58
Analysts Ratings   8-2-0-0-0  52 week high=$67.25
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

******

TMX - Telefonos de Mexico, S.A. de C.V. $75.75 (+4.19)

TMX, otherwise known as Telmex, is the dominant phone carrier 
in Mexico.  It is also the most heavily weighted stock on the 
Mexican stock exchange.  The company has more than 9 million 
phone lines and its TELCEL unit provides cellular phone service 
to more than 1.1 million users.  Carso Global Telecom, France 
Telecom, and SBC Communications hold voting control of the 
company.

TMX has a particularly nice graph.  The picture could get much 
better.  Mexico's cellular phone market is about to take off. 
"Beginning on Saturday (May 1st), Mexican mobile telephone 
users will no longer have to pay for calls they receive, a 
change that analysts and industry leaders say will throw fuel 
on an already explosive market." (-Reuters)  Even though 
cell phone traffic is expected to greatly increase, TMX 
originally fought the ruling with a court injunction since it 
felt that the reverse would happen.  However, the new system 
was approved on April 16th by the Federal Trade Commission 
(Cofetel) anyway.  Even though TMX didn't agree with the plan, 
it is a telecommunications leader and could be pulled higher as 
new cellular phone users come aboard to take advantage of the 
decreased rates.

No new news. 

BUY CALL MAY-75 TMX-EO OI=3367 at $3.50 SL=1.75
BUY CALL MAY-80 TMX-EP OI=   0 at $1.25 SL=0.00
BUY CALL JUN-75*TMX-FO OI=1076 at $5.13 SL=3.25
BUY CALL JUN-80 TMX-FP OI=  46 at $2.63 SL=1.25
 
Picked on May 2nd at  $75.75     PE = 24
Change since picked   +$0.00     52 week low =$32.75
Analysts Ratings   1-3-4-0-0     52 week high=$78.19
Last earnings 04/99 est 1.03   actual 1.37 
Next earnings 07-27 est 1.07   versus 0.99
Average Daily Volume = 1.36 mln
Chart = http://quote.yahoo.com/q?s=TMX&d=3m


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

PLAYS CONTINUED IN SECTION FOUR.

*****************************
SEE DISCLAIMER IN SECTION ONE
*****************************
The Option Investor Newsletter             5-2-99
Sunday                4  of  6

**********
Network 
Continued
**********

MFNX - Metromedia Fiber Netwk. $84.25 (+5.25)(+4.25)(P5W+32.50)

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?

In an otherwise tough week for the NASDAQ, MFNX came 
through with a $5.25 gain, showing us its currently great 
relative strength.  Since MFNX is traditionally light on 
news, we need to look to the technicals for the value in 
this play.  Following 2 days of low-volume, stable prices 
in strong NASDAQ headwinds, MFNX handed us a $3.75 gain on 
Friday on still meager volume, indicating current holders 
aren't interested in selling at this level - a strong 
basing signal.  MFNX splits 2:1 on May 18 and will likely 
announce earnings around that time too (they haven't picked 
a release date yet).  That said, it's about that time for 
the split/earnings run to begin.  While the following 
tidbit of information won't affect the play this week, 
savvy investors should note the actual earnings date as the 
split nears.  If the split occurs before the earnings are 
released, that's management's tip of the hat to us that 
they expect outstanding earnings.  After all, why would 
they announce only average or lousy earnings immediately 
after a split?  Want evidence?  See Qualcom's chart.  As 
always, confirm market direction before playing.

Little news, but here goes: PSI Net, the largest 
independent ISP lighted OC-48 fiber (2.4 gigabits per 
second) acquired from MFNX between New York City and 
Washington, D.C.  The acquisition happened last May and no 
financial terms were disclosed in the current release.  

***Since last week's write-up, note that OI for the AUG-80 
has decreased by 2000 contracts while AUG-100 have 
increased by 2000 contracts.  It appears there is one smart 
investor milking the gamma curve (rate of change in delta) 
very hard.  Not recommended, because may be a 1 person 
market.

BUY CALL MAY-80 QFN-EP OI=657 at $10.50 SL=8.00
BUY CALL MAY-85*QFN-EQ OI=443 at $ 8.13 SL=6.25
BUY CALL MAY-90 QFN-EU OI=202 at $ 6.00 SL=4.25
BUY CALL JUN-85 QFN-FQ OI= 40 at $11.50 SL=9.25
BUY CALL JUN-90 QFN-FU OI= 56 at $ 9.38 SL=7.00

Picked on April 11 at $67.38          PE = N/A
Change since picked   +16.87          52 week low =$ 6.38
Analysts Ratings   4-1-0-0-0          52 week high=$88.75
Last earnings 02/99 est -.01 actual  .00
Next earnings 05-17 est -.17 versus -.05
Average Daily Volume = 749 K
Chart = http://quote.yahoo.com/q?s=MFNX&d=3m

******

QCOM - QUALCOMM Inc. $200.00 (+9.13)(+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.

After adding QCOM this past Tuesday, the stock dipped further 
and provided us with a solid entry point.  QCOM went on to add 
+$9.56 in trading on Thursday and Friday.  The company will 
split 2:1 on May 11th.  Although the market could continue to 
correct, know that splits are one of the few types of plays 
that sometimes continue to be profitable even in a down market.  
Their momentum can often times buck the trend and carry a stock 
higher.  As an example, QCOM still managed to add +$1.75 on 
Friday when the market plummeted to over a 200 point loss at 
one point.  This doesn't mean that splitters are a sure thing.  
However, we do feel QCOM will have a good chance at making a 
run higher in upcoming trading as part of its split run.

No new news.

BUY CALL MAY-200*AAW-ET OI=2044 at $19.00 SL=15.00
BUY CALL MAY-210 AAW-EB OI= 493 at $14.50 SL=11.75
BUY CALL JUN-200 AAW-FT OI= 245 at $24.00 SL=18.75
BUY CALL JUN-210 AAW-FB OI=  48 at $19.50 SL=15.25
  
Picked on April 27th at $197.06    PE = 286
Change since picked      +$2.94    52 week low =$ 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 = 2.85 mln
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m

**********
FINANCIAL
**********

COF - Capital One Financial Corp. $173.69 (+9.44)

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

COF had made a terrific earnings run heading into its 
announcements back on April 15th.  The company did report 
incredible numbers but we had to drop it and let it cool off 
anyway.  Well, COF has done exactly that and it now is at all 
time highs.  On Friday, it set its latest at the price of 
$176.88.  Even though the markets plunged over 200 points at 
one point in trading, COF showed unbelievable strength by 
adding +$6.00 by the close.  Why?  Well, on Friday COF's board 
approved a 3:1 stock split and scheduled it for early June.  
COF could deliver a strong split run if the financial 
stocks hold up.
  
No new news.

BUY CALL MAY-170 COF-EU OI=2541 at $ 9.63 SL= 7.25
BUY CALL MAY-175 COF-EV OI= 128 at $ 7.13 SL= 5.25
BUY CALL JUN-170*COF-FU OI= 578 at $14.13 SL=11.25
BUY CALL JUN-175 COF-FV OI= 104 at $11.75 SL= 9.50 
 
Picked on May 2nd at   $173.69     PE = 42
Change since picked     +$0.00     52 week low =$ 51.75
Analysts Ratings    11-6-1-0-1     52 week high=$176.88
Last earnings  04/99  est 0.96     actual 1.18 
Next earnings  07-16  est 1.23     versus 0.96
Average Daily Volume = 455.7 K
Chart = http://quote.yahoo.com/q?s=COF&d=3m

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

FDX - Federal Express $112.75 (-2.31)(+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. Other 
positives for the company: in February, the pilots approved an 
unusually long 5-year contract and recently FDX launched a 
"shipping portal" on the Web with Netscape. Along with earnings, 
it also announced that it would split 2:1 on May 6th after the 
bell, and that is why we are recommending FDX now. 

As an Internet shipping company, FedEx will be more volatile 
than other airlines and did we see volatility this week! FDX 
had already begun its split run when we picked it up in last 
Sunday's letter. Then a downgrade caused it to stall after 
take-off and lose altitude Tuesday and Wednesday before it 
finally initiated a stall recovery on Thursday. It gained 
altitude Thursday and Friday and is now poised to fly higher 
next week ahead of its split on Thursday. Caution: increased oil 
prices hurt the stock last week and a further jump in oil could 
do more damage--so use stops. Be sure to close out your options 
by Wednesday or by Thursday's close at the latest.

BUY CALL MAY-110 FDX-EB OI=1846 at $7.50 SL=5.75
BUY CALL MAY-115*FDX-EC OI=2149 at $5.00 SL=3.25
BUY CALL MAY-120 FDX-ED OI= 423 at $3.25 SL=1.75
BUY CALL JUN-115 FDX-FC OI= 134 at $8.00 SL=6.25
BUY CALL JUN-120 FDX-FD OI= 178 at $6.25 SL=4.50

Picked on Apr 25th at $115.06      PE = 30
Change since picked  +$  2.31      52 week low =$ 43.63
Analysts Ratings    3-1-8-0-0      52 week high=$118.94
Last earnings  2/99  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 $94.81 (-1.06)(+5.63)

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 Hoover's Online)

ANF did finish negative this last week, but we like the
strength it showed on Friday.  ANF traded as high as $95.81
before the market collapsed.  There are a few things that
make ANF look ready for a nice gain.  First of all, ANF is
sitting just above its 30-dma.  This has been the site of
strong support in the past.  Secondly, ANF has a very nice
ascending channel, and seems ready to trend toward the 
upper range just above $100.  All things are subject
to change with any move the market makes, but the chart
shows some nice potential.    

ANF has a shareholder meeting on May 20th.  We show that
there is a proposal to raise the number of shares authorized
to 250 million.  ANF already has enough stock to do a 2-1
split, so we feel a split with earnings or at the meeting
is very, very likely.  

BUY CALL MAY- 90 ANF-ER OI=185 at $8.75 SL=6.50 ITM $4.81
BUY CALL MAY- 95*ANF-ES OI=839 at $5.88 SL=3.75
BUY CALL MAY-100 ANF-ET OI=628 at $3.63 SL=1.75
BUY CALL JUN- 95 ANF-FS OI=189 at $9.25 SL=7.00 
BUY CALL JUN-100 ANF-FT OI= 43 at $6.50 SL=4.50 

Picked on Apr.22nd at  $95.38  PE = 38 
Change since picked     -0.57  52 week low =$ 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 = 561.2K
Chart = http://quote.yahoo.com/q?s=ANF=3m

******

WMT  Wal-Mart $46.00 (-4.94)(+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.

WMT sold off this past week for a -$4.94 loss.  Even though 
WMT has dropped below its 50 dma, we maintain our bullish 
outlook for the company.  Mainly because this is the third
bounce in about 6 weeks at $44.  This should be the bottom.
It will announce its earnings on May 11th and we are expecting 
the stock to pick up steam.  Retailers are expected to post 
solid numbers since the economy has been so strong and because 
the consumers are still buying.  Some analysts feel that 
Wal-Mart could come in a penny above the consensus 0.22 a share.  
As always, confirm market and stock direction before playing. 

News:  For the time being, the speculation in Europe is over.  
WMT reported this past week that it wasn't interested in 
acquiring any candidates overseas, dissolving several rumors.  
Jay Fitzsimmons, WMT's senior v.p., said the margins in the UK 
were too high to make an acquisition profitable for shareholders.  

BUY CALL MAY-45*WMT-EI OI= 2603 at $2.94 SL=1.50
BUY CALL MAY-50 WMT-EJ OI=15433 at $0.94 SL=0.00
BUY CALL JUN-45 WMT-FI OI= 9842 at $4.38 SL=2.75
BUY CALL JUN-50 WMT-FJ OI=11035 at $2.38 SL=1.25

Picked on April 22nd at $50.06    PE = 46  
Change since picked     -$4.06    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 0.22   versus 0.19
Average daily volume = 7.59 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m

*****

FD - Federated Department Stores, Inc. $46.69 (+4.81)

Ever heard of Bloomingdale's?  Macy's?  These are just two of 
FD's more recognized  store chains.   FD also runs The Bon 
Marche, Burdines, Rich's, Goldsmith's, Stern's, and Lazarus.  
With all of its operations, FD is considered the largest 
upscale department store retailer in the US.  FD handles over 
400 stores stretching across 33 states.  The company also 
conducts some its business through mail catalogs and on the 
Internet under Macys.com.

FD will report its earnings on May 12th (First Call).  
Retailers have reaped the benefits of a strong economy full 
of people willing to shell out the cash on new items.  The 
consumer demand is expected to remain strong and will only 
push stocks like FD higher.  Improved sales and profits 
should help FD beat the mean estimates of analysts.  Look 
for FD to continue its run into earnings.

No new news. 

BUY CALL MAY-45    FD-EI OI=799 at $2.69 SL=1.25
BUY CALL MAY-47.50 FD-EW OI= 11 at $1.81 SL=1.00**
**normally we don't quote the odd strikes, but there
is no action on the MAY-50s and volume was 125 (Fri)
for the $47.50s.
 
Picked on May 2nd at  $46.69     PE =15
Change since picked   +$0.00     52 week low =$32.81
Analysts Ratings   8-5-6-0-0     52 week high=$56.19
Last earnings 01/99 est 1.82     actual 1.88 
Next earnings 05-12 est 0.28     versus 0.27
Average Daily Volume = 1.31 mln 
Chart = http://quote.yahoo.com/q?s=FD&d=3m

*************
DRUGS  
*************
VISX - Visx, Inc. $128.75 (+11.06)

Visx is a leader in the development of refractive laser technology. 
It designs and makes surgical systems that re-contour the front 
surface of the cornea of the human eye in order to correct vision 
problems. It claims about 75% of the laser vision correction 
market, its only business. VISX systems are available worldwide.

We covered this "sexy stock" during its earnings run for a nice 
gain and we now have visions of the same sort of gain during a 
stock split run. We expected a split announcement with earnings 
and sure enough, we got a 2:1 scheduled for May 13th. When this 
stock gets going, it really gains momentum. VISX has more than 
doubled in price since late February, but is off its high of 
$141.50. (That may provide some resistance, but still allows for 
a lot of profit.) The laser vision correction market is expected 
to more than triple from 425,000 procedures done in 1998 to 1.3 
mln in 2000 and the company sees earnings growth of between 25 
and 35% annually, so investors are really looking at this stock. 
(CAUTION...can be very volatile.  Not for everyone)

On April 26th, McDonalds Investments started coverage with a "buy". 
After a pullback during the past week, VISX gained $8.94 on Friday 
and closed right near the high of the day--a positive sign for 
this coming week. With less than 2 weeks to go before the split, 
it is time for the run to start! (Looks like it started on
Friday)

BUY CALL MAY-125 VFS-EE OI=490 at $11.00 SL= 8.75
BUY CALL MAY-130*VFS-EF OI=548 at $ 8.38 SL= 6.50
BUY CALL MAY-135 VFS-EG OI=474 at $ 6.25 SL= 4.50
BUY CALL JUN-130 VFS-FF OI=284 at $14.00 SL=11.25
BUY CALL JUN-135 VFS-FG OI= 69 at $11.38 SL= 9.00

Picked on Apr 25th at $128.75      PE = 76
Change since picked  +$  0.00      52 week low =$ 20.63 
Analysts Ratings    3-2-1-0-0      52 week high=$141.50
Last earnings  3/99  est 0.54   actual 0.58 surprise=+7.4%
Next earnings  7-14  est 0.56   versus 0.29
Average daily volume = 837.4 K		
Chart = http://quote.yahoo.com/q?s=visx&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 
****************

MSPG - MindSpring Enterprises, Inc. $96.94 (-11.31)

MindSpring is now the fourth largest Internet service provider 
behind only AOL, the Microsoft Network, and AT&T.  Not bad 
company to be ranked against!  MSPG has boosted its standings 
by making several acquisitions.  The company now has more than 
one million subscribers.  MSPG focuses on serving individual 
users and small businesses through dial-up Internet access 
and business services.

MSPG surged over +$45 on earnings anticipation.  MSPG certainly 
made a run up until its numbers were released on April 27th.   
The company reported 0.16 which beat Wall Street's forecast by 
3 cents per share.  However, no stock moves in a straight line 
and MSPG has since been consolidating.  The sell off has 
dropped MSPG below its 30 dma.  With earnings already out of 
the bag and recent weakness in the Internets, there isn't much 
to help the company recover.  We feel that profit takers will 
continue to take their money elsewhere for the time being.  
MSPG's failure to rally with the internets on Friday is 
a bearish sign.  There doesn't appear to be any support until
$79.50.

No new news. (That's the problem.)

BUY PUT MAY-100*MQD-QT OI=577 at $11.25 SL=8.75
BUY PUT MAY- 95 MQD-QS OI=283 at $ 8.63 SL=6.50

Average Daily Volume = 1.38 mln
Chart = http://quote.yahoo.com/q?s=MSPG&d=3m

******

BMY - Bristol-Myers Squibb $63.56 (-3.50)

Bristol Myers is one of the leaders in pharmaceutical research
and development.  It also creates many personal care products
such as hair care, shampoo, body lotion, baby formula, vitamins,
deodorant and Excedrin.  Most of its sales still come from 
its pharmaceutical division focused in the area of cholesterol 
drugs, anti-cancer and anti-infective drugs.  Together with
its anti-wound and orthopedic products, its considered a blue
chip stock in the drug industry.

Again this week the drug industry is stumbling as investors
flee the high P.E. companies for better growth potential.  BMY
has been caught in shift of money to other groups.  The feeling
is that even though most drug companies are relatively stable,
the valuations are much steeper than in past years.  With other
industries coming alive the past two weeks, people are taking 
profits.  BMY has been back and forth recently looking to establish
direction.  It's crossed over its 50-dma five times during the
past month. As of Friday, it actually closed under it's 50 dma
again (a bearish sign).  If you look at the chart, it has 
been trading relatively sideways for the last 5 months.  If
history repeats itself, we could see BMY at $59 or $58 soon.

BUY PUT MAY-65 BMY-QM OI=2077 at $3.12 SL=1.50
BUY PUT JUN-60*BMY-RL OI=1125 at $2.00 SL=1.00

Average Daily Volume = 4.05 mln

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

*****

DD - DuPont $70.68 (+3.75)

DuPont is a leader of global industrial companies that produce
and engineer products such as pharmaceuticals, chemicals, 
high performance materials, and agriculturals.  This is one 
of the Cyclical group that you've been hearing so much of 
lately.  Some of their products include Teflon, Dacron and 
Lycra.  The company is mainly focused in the life sciences 
area and its work includes the finding of treatment for the 
H.I.V virus. It is the number one chemical firm in the U.S.

DD has made a nice move the past two weeks as investors are
buying up anything that can be called Cyclical.  With tech 
stocks stumbling this week, companies like DuPont are reaping
the benefit.  The problem is there are no fundamentals to 
support any lasting rally.  DD reported earnings this week
that beat lowered estimates as many manufacturers have been 
hurt by the economic crisis in Asia, Latin America, and Russia.  
With the earnings surprise now over, we expect DD to return 
back to earth.  The gains have placed DuPont well above its 
50-dma which is $12 lower around the $58 level.  Investors 
will quickly turn away from these stocks with any rebound
in the NASDAQ.  Watch for drops to be sudden as traders will
make sure they aren't left holding the cyclicals in a change
of momentum. 

BUY MAY-75 DD-QO OI= 52 at $5.38 SL=3.50
BUY MAY-70*DD-QN OI=189 at $2.00 SL=1.00

Average Daily Volume = 2.80 mln

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

*****

GIS - General Mills $73.12 -1.31 (-6.38)

General Mills is a leading producer of packaged consumer foods.  
The company makes many ready-to-eat cereal brands, including 
Cheerios, Wheaties, and Chex.  General Mills also sells a line 
of dessert mixes under the Betty Crocker trademark.  The company 
makes baking mixes such as Bisquick and produces family flour 
under the Gold Medal brand.  General Mills also sells flour to 
the bakery, food service, and manufacturing markets. General 
Mills exports packaged food products around the world and has 
joint ventures with Nestle, PepsiCo, Bestfoods, and Want Want 
Holdings.

General Mills has made it back to our put list again as weakness
in the cereal and consumer food group are still nagging at its 
stock price.  We first recommended GIS when it reported earnings 
for Q3 last month and only met estimates by turning EPS of .89 
cents.  This is uncharacteristic since it has been beating First 
Call in recent quarters.  Most likely caused by price wars and 
an advertising blitz by rival Kellogg.  The stock made a technical 
move back to its 50-dma but was unable to hold.  The stock looks 
to be in a free fall that just pierced major support of its 
200-dma at $74.  This could signal a whole new wave of selling.  
Confirm market direction and watch out for analysts or company 
comments in an effort to halt this steep slide.

BUY PUT MAY-75*GIS-QO OI=621 at $3.00 SL=1.50
BUY PUT JUN-75 GIS-RO OI= 15 at $3.38 SL=1.50 vol=300 Fri.
(there is no action on MAY-70s)

Average Daily Volume = 513 K

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

*****

ELN - Elan Corps Ads $51.63 (-8.12)(-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.  

Investors have been punishing the drug sector almost 
relentlessly for two weeks now. The never-ending question is 
when will it be over. Trading volume on ELN has been well 
above its normal ADV topping over 3 mln shares on most days.  
On Monday, ELN dropped almost 6 pts during intraday trading 
and broke old resistance when it established a new low at $53.88.  
The downtrend continued and on Thursday, the stock took a dip 
below the $50 mark.  Elan's new 52-week low is now $49.25.  On 
Friday, the trading range was a bit tighter and the stock only 
closed down a fraction.  This may be a signal for a possible 
reversal considering the DOW was down -89 points.  On the other 
hand, ELN is still about 20 points below the it's 200 dma and 
the MACD indicator shows a downtick.  The bargain hunters have 
yet to rally for deals in the drug sector, but when they do, 
they will be quick in their execution. Therefore, it's very 
important to confirm the stock's direction in this play. And 
if you're already in the market, be prepared and tighten those 
stops.

BUY PUT MAY-50 ELN-QJ OI= 654 at $3.00 SL=1.50
BUY PUT MAY-55 ELN-QK OI=1238 at $5.88 SL=4.25

Average daily volume(ADV) = 1.12 mln
Chart = http://quote.yahoo.com/q?s=eln&d=3m

*****

LOW - Lowe's Companies $52.75 +.50 (-6.81)

Lowe's Companies provides home decor, home construction and home
improvement supplies for projects around your home.  This is 
one of the nation's largest retailers.  The company owns more
than 484 stores nationwide which cater to do-it-yourself and 
commercial customers.  Its secret to success is the way in 
distributes products quickly to its customers through advanced 
distribution centers which help to reduce costs. Their products
include lighting products, home building supplies, home decor, 
lumber, paint, carpet, tools, cabinets, heating and cooling 
systems and many other odd and ends.  They recently acquired 
Eagle Hardware to compliment its current stores. 

Lowe's stock got off on the wrong foot this week and was never
able to recover.  It saw four consecutive down days and rallied
on the close Friday to barely avoid its fifth.  The stock was
plagued by an overall bearish tone to retailers this week and
also the victim of Prudential analyst Wayne Hood's downgrade.
He removed the Strong Buy rating and replaced it with hold and
the stock reacted accordingly.  Late last week the stock bounced
off resistance at $60 and came down rapidly to surpass a recent
short-term low.  From here it should be a struggle to find 
support.  The 200-dma is the next key level at $46.  

BUY PUT MAY-55*LOW-QK OI=558 at $4.25 SL=2.50
BUY PUT JUN-50 LOW-RJ OI= 69 at $2.43 SL=1.25

Average Daily Volume = 1.56 mln

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

*****

NSOL - Network Solutions $77.75 (-2.25)(-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 continues to give us trading patterns that make put plays
successful.  For the third straight week, we've watched investors
bail out as Network's previous monopoly in the domain name 
registering business is taken away by the government and handed 
to eager competitors.  The first announcement of five competing
firms increased this week as ICANN proceeds with their plan of
bringing as many as 29 new companies aboard to register domains.
Trading quieted down this week but the trend is still in place.
It's peaks are becoming lower and lower each week.  The stock 
tried to establish support at $80 on its 10-dma but it failed 
to hold.  If the stock doesn't break out of this current trend, 
we should see it trade down near $60, which it hit a little over 
a week ago.  Unfortunately for NSOL investors the fundamentals 
don't provide any reason for the stock to make such a break out.
Careful, though, several net stocks rallied on Friday (even 
NSOL managed to close fractionally positive), but the whisper
is a renewed rebound in internets next week.  Tighten those
stops.

BUY PUT MAY-80 JNQ-QP OI=225 at $9.12 SL=6.50
BUY PUT MAY-75*JNQ-QO OI=381 at $6.62 SL=4.75 

Average Daily Volume = 981 K

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




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

The Option Investor Newsletter            5-2-99
Sunday                5  of  6

***********************************************************
Combos      
***********************************************************
Time For a Breather...

Friday, April 30,

Blue-chip stocks moved lower Friday after a report on the American
economy said the incredible growth may create new inflationary
pressures. The Dow recovered slightly from a severe mid-day low to
close down 89 points, ending a three-day run of record highs. The
Nasdaq index also recovered on a late rally, rising 14 points to
2,542. In the broader market, declining issues led advances 16 to
13 on active volume of 935 million shares on the NYSE.

Thursday's new plays (positions/prices):

NSM NOV15C/MAY15C  $1.62 debit  (priced near the open and;)
NSM JUN15C/MAY15C  $0.43 debit  (still less than our target)
TXN MAY85P/MAY90P  $0.62 debit  (down almost $5 at the close)
GET SEP30C/SEP30P  $4.19 debit  (no movement to help our entry)

Portfolio plays:

It was another crazy week in the market as stocks rose on news of
a booming economy only to fall on speculation that rampant growth
could lead the Federal reserve to raise interest rates. Internet
shares didn't help the situation with their broad based sell-off
on lower expected earnings and the tech sector was shelled with
a barrage of contradictory forecasts. Luckily, we escaped most of
the carnage with only light wounds and many of our debit spreads
are trading near parity with favorable profits available.

With three weeks to go, we suggest you consider closing these
plays for small returns rather than risk a future loss. Some of
the candidates include CDO, MI, NXTL, RX and UTX. Our take-over
play on UMG (debit straddle) is also $1.00 ITM after only a week.
You can close now for a reasonable profit or hold the position
open based on Friday's news that UMG has forged confidentiality
pacts with America Online and Microsoft. The move suggests the
technology giants are going to help Comcast outbid AT&T for the
company.

Our only real disappointment was WCOM's announcement on Thursday
that they would continue to pursue a strategy of acquisitions that
will significantly increase company spending in the short-term.
After a major sell-off on Thursday, we commented that the play
would probably be rolled or exited based on Friday's activity. In
Friday morning's trading, WCOM opened $2 higher (with the market)
and immediately started to fade. By 9:45, the stock was up $1.75
and by 9:55, it was only up $1.38. The exit strategy was simply
to buy the short side back and sell the long position for a small
loss. An aggressive trader could have held through mid-day and
exited in the afternoon for a credit. I am very conservative with
these techniques and sometimes my portfolio suffers because of it.
However, I am also (usually) the one with fewer losses when the
end of the month arrives. Lets hope that Murphy's law takes over
(like it did last month) and WCOM rallies, now that I have closed
the play for a small loss.

Good Luck!
******************************************************************
				- NEW PLAYS -
******************************************************************
With the market once again in a tenuous position, I decided to
offer some non-directional positions. The most common of these
neutral combinations is the debit straddle. This type of play is
favorable when the underlying stock has demonstrated the ability
to move the required distance in the allotted time or it has a
tradable technical pattern such as a 'rolling' trend. The option
must also be reasonably priced (generally low implied volatility).

Straddle techniques:

The two most common methods for straight debit-straddles are:

Hold both positions until one has paid for the other then sell
them together for a net profit...or, take small profits on each
of the positions, providing the stock has a reasonable rolling
or channeling movement and no major directional trend or bias.

In this case, we have plenty of time and a very active market
to support our speculation of volatility but remember that the
premium in a long option is always eroding. As we get near the
last month of the option's expiration, you should start to plan
your exit (as time really begins to work against you), and try
to use the daily movement in the stock price to your benefit.

Good Luck!
******************************************************************
CSX - CSX Corporation  $49.25     *** The Rail Baron ***

CSX Corporation is an international transportation company that
offers a variety of rail, container, trucking, shipping and other
contract logistics services.

CSX posted lower profits in the first quarter, attributing most
of the drop to a charge from accounting changes related to worker
compensation insurance adjustments. Excluding the charge, CSX
recorded first-quarter earnings of $0.36 per share, $0.04 above
the Wall Street consensus of $0.32. After the adjusted numbers
were announced, a Gruntal & Company analyst raised his future
estimates for the freight company and repeated his 'strong buy'
rating based on excellent cost controls.

The company also expects to profit from a recently settled
bidding war for Conrail. They agreed to buy 42% of the rival
railroad while Norfolk Southern purchased the remainder. Under
the $10 billion joint merger, CSX and Norfolk Southern split
Conrail's operating network east of the Mississippi River. The
deal however, has suffered numerous delays.

A great chart with lots of movement and a reasonable expectation
of continued volatility.

PLAY (aggressive/debit straddle):

BUY CALL JUN-50 CSX-HJ OI=82 A=$3.12
BUY PUT  JUN-50 CSX-TJ OI=13 A=$3.62
INITIAL NET DEBIT TARGET=$6.50 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=CSX&d=3m
******************************************************************
ETH - Ethan Allen  $50.68     *** A Straddle Favorite ***

Ethan Allen Interiors is a leading manufacturer and retailer of
quality home furnishings. The company sells a range of furniture
products and decorative accessories through an exclusive network
of 314 retail stores. Its outlets are located in Canada, Mexico
and the U.S. with 20 additional stores abroad. Ethan Allen also
operates 21 manufacturing facilities which includes 3 sawmills
located throughout the United States.

Ethan Allen recently reported record quarterly earnings along with
the statement that this is the fifteenth consecutive quarter the
company has been able to report significant growth in sales. The
big news however, followed just a few days later as the company
announced a plan to allow ETH's stock to be more attractive to a
broader investor base with a three-for-two stock split and a 50%
increase in the cash dividend. The additional shares will be
distributed on 5/21/99 to shareholders of record on 5/7/1999.

ETH is an old favorite for straddle players and it usually makes
the necessary movement (to the break-even point) well within the
allotted time frame. With a three-for-two split, the option prices
will be interesting, but profits are still the most important
issue.

PLAY (aggressive/debit straddle):

BUY  CALL AUG-50 ETH-HJ OI=102 A=$5.50
BUY  PUT  AUG-50 ETH-TJ OI=33  A=$4.12
INITIAL NET DEBIT TARGET=$9.25 TARGET ROI=50%

Chart = http://quote.yahoo.com/q?s=ETH&d=3m
******************************************************************
LRW - Labor Ready  $39.25     *** Industry Workhorse ***

Labor Ready is the nation's leading provider of temporary manual
labor to the light industrial and small business markets. LRW
focuses on small and medium sized companies because it doesn't
have to contend with the pricing pressures associated with large
companies and nationwide fulfillment contracts. Labor Ready began
operations in 1989 with a handful of clients and today serves an
active customer base of over 195,000. The company is continuing
its rapid and successful expansion with new offices across the
country. The number of workers employed last year was 533,000,
making LRW one of the largest employers in the country and they
expect to open 200 new offices in 1999.

The stock had a great 'earnings' rally last week, moving $15
higher in just six days. When the positive report was announced,
(sales for the quarter increased 67% to a record $157 million),
the stock just kept going! The CEO said strong sales and earnings
were the result of the company's growing national presence, the
continued high demand for manual labor, efficiencies in marketing
and the streamlining of field operations. The company lowered its
store operating costs by staffing its stores with fewer employees
than would have been utilized in the past. The company predicts
that new stores will begin to earn profits faster than expected
and existing stores will be larger contributors to operating
results in what are traditionally the strongest labor demand
quarters of the year. So strong is the demand that the company
now says it plans to open 300 stores in the year 2000.

An extremely volatile issue with a history for surprises and the
options are fairly valued.

PLAY (aggressive/debit straddle):

BUY  CALL JUN-40 LRW-FH OI=0 A=$3.12
BUY  PUT  JUN-40 LRW-RH OI=0 A=$3.38
INITIAL NET DEBIT TARGET=$6.25 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=LRW&d=3m
******************************************************************
CMNT - Computer Network Tech. $18.69     *** Technicals Only! ***

Computer Network Technology is a global company that provides
hardware and software products for the implementation of Storage
Area Networking, Enterprise Application Integration and other
e-engineering solutions. Organizations worldwide choose CNT to
build and run their business-critical networks and gain greater
connectivity and access to information, without sacrificing
performance, security, or integrity. Their products are sold
worldwide through direct sales and a network of distributors.

The stock is moving nicely after a positive earnings report in
mid-April and a recent break-out above a trading top near $17.
Last quarter, the increased demand for their SAN (Storage Area
Networking) products resulted in record quarterly revenues and
generated a 450% increase in EPS from the first quarter of 1998.
The growth is due in part to increased product revenue (up 15%)
for the quarter which totaled $25.8 million.

Traders and analysts are excited with lots of discussion about
new products and affiliations including the possible aquisitions
of smaller players and merger offers from larger players like EMC.

We just like the small disparity in the June ITM options and the
bullish technical outlook of the recent chart history.

PLAY (very conservative/debit spread):

BUY  CALL JUN-12.50 QDO-FV OI=10 A=$6.62
SELL CALL JUN-17.50 QDO-FW OI=35 B=$2.87
INITIAL NET DEBIT TARGET=$3.50 ROI(max)=42% B/E=$16.00

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







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

The Option Investor Newsletter            5-2-99
Sunday                6  of  6

*********************
COVERED CALL SECTION
*********************
How To Play Our Covered-Calls...

Last week we discussed the primary objective of covered writing;
increased income though stock ownership. We also described how the
the ideal covered call offers reduced risk and a good probability
of making an acceptable profit. Today, we will outline our method
for playing a covered-call.

With the recent volatile market, our current focus is on ITM plays
with average returns of 5% to 8% per month. We expect you to open
our positions at or near the cost basis that is quoted in the play
narrative. That's the one way you can guarantee (initially) the
overall return-on-investment we are offering. The best way to open
these positions is with a buy-write. We don't recommend legging-in
to these plays because in most instances, the option premium is
gone (or greatly reduced) when you eventually sell the call option.
You may choose to buy the stock and sell the call later but that
generally requires the stock price to move higher after you have
purchased it; a very risky technique!

The easiest way to utilize this section is to take our wide range
of candidates and narrow them down through your own due diligence
until you find plays that meet your risk/reward tolerance. Always
research the company and the calendar (upcoming events, earnings
dates, scheduled announcements etc.). When you have good knowledge
of a stock and its industry, you are way ahead of most investors.
Remember, "knowledge is power!" and with the research tools on the
Internet, there is no excuse for not being well informed about any
company or industry group.

After a candidate has been selected, you must decide how many
shares of stock to buy. Most traders plan to purchase a minimum
of 500 to 1000 shares (so commissions don't significantly affect
the ROI) and they place both sides of the order with the broker
as a net-debit or buy-write. After your order is filled, stay
informed by monitoring all the news and announcements affecting
your play until the sold call expires or the position is closed
for other reasons.

The most painful lesson comes when you close a losing trade. It's
very difficult to learn to close-out losing plays early but the
simple fact is; there is no reason to hold on to a losing position
when there are so many other profitable plays that deserve your
time and money. Accept your losses, learn from your mistakes (and
evaluate each one critically) then move on! Successful traders use
proven money management techniques to minimize the cost of losing
positions.
******************************************************************
SUMMARY OF PREVIOUS PICKS (3 Weeks to the May expiration)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt     Profit  ROI    Monthly
Sym    Picked Price        Price   Bid     /Loss          ROI

ETV     7.56   7.44   May   7.50  1.13   $  1.01  15.7%  13.7%
GSTX   12.69  12.63   May  12.50  1.38  *$  1.19  10.5%  11.4%
AND     7.75   8.19   May   7.50  1.25  *$  1.00  15.4%  11.1%
SATH   11.81  13.94   May  10.00  2.63  *$  0.82   8.9%   9.7%
PILL   19.00  16.00   May  15.00  5.50  *$  1.50  11.1%   9.7%
OMKT   13.75  13.50   May  12.50  2.19  *$  0.94   8.1%   8.8%
MI     18.38  16.13   May  12.50  7.00  *$  1.12   9.8%   8.6%
TWMC   14.38  15.31   May  12.50  2.75  *$  0.87   7.5%   8.1%
QGLY    5.13   5.13   May   5.00  0.63  *$  0.50  11.1%   8.0%
DBCC   17.75  16.50   May  15.00  4.00  *$  1.25   9.1%   7.9%
GSTX   11.06  12.63   May  10.00  2.13  *$  1.07  12.0%   7.4%
PILL   16.88  16.00   May  15.00  3.25  *$  1.37  10.1%   7.3%
CYCH   18.19  15.75   May  15.00  4.13  *$  0.94   6.7%   7.3%
HYPT   12.50  12.50   May  10.00  3.38  *$  0.88   9.6%   7.0%
CELG   19.31  18.94   May  17.50  2.81  *$  1.00   6.1%   6.6%
OMKT   15.00  13.50   May  12.50  3.38  *$  0.88   7.6%   6.6%
NAVR   15.88  14.88   May  12.50  4.25  *$  0.87   7.5%   6.5%
LBFC   10.69  11.13   May  10.00  1.50  *$  0.81   8.8%   6.4%
KLOC   13.75  11.56   May  10.00  4.75  *$  1.00  11.1%   6.0%
ARTT   13.00  13.25   May  10.00  3.75  *$  0.75   8.1%   5.9%
HDL    13.88  14.06   May  12.50  2.31  *$  0.93   8.0%   5.8%
OMKT   16.13  13.50   May  12.50  4.50  *$  0.87   7.5%   5.4%
EXCA   14.25  15.50   May  12.50  2.75  *$  1.00   8.7%   5.4%
IDTC   30.44  28.50   May  22.50  9.00  *$  1.06   4.9%   5.4%
HDL    14.06  14.06   May  12.50  2.13  *$  0.57   4.8%   5.2%
GCTI   17.00  17.88   May  12.50  5.13  *$  0.63   5.3%   4.6%
CENT   15.13  14.00   May  12.50  3.13  *$  0.50   4.2%   4.5%
BNYN   15.88  12.31   May  12.50  4.00   $  0.43   3.6%   3.1%
EGGS   17.63  14.00   May  15.00  3.63   $  0.00   0.0%   0.0%

Dropped plays:  FIBR

-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

ADPT   24.06  May 22.50  APQ EX  2.25  1488  21.81   3.16%   3.16%
BEAM   17.44  May 15.00  BAQ EC  3.00  1744  14.44   3.88%   3.88%
DBCC   16.63  May 15.00  BQD EC  2.38  1620  14.25   5.26%   5.26%
HRBC   10.94  May 10.00   BQ EB  1.63  162    9.31   7.41%   7.41%
IDTC   28.50  May 22.50  IQJ EX  7.13  281   21.37   5.29%   5.29%
SPYG   18.13  May 15.00  YQG EC  3.88  564   14.25   5.26%   5.26%
------------------------------------------------------------------
DMRK   10.38  Jun 10.00  DQN FB  1.81  10     8.57  16.69%  16.69%
VTEL    5.16  Jun  5.00  VQE FA  1.13  937    4.03  24.07%  24.07%
VVUS    4.75  Jun  5.00  VVQ FA  0.63  3225   4.12  21.36%  15.29%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

HRBC   10.94  May 10.00   BQ EB  1.63  162    9.31   7.41%   7.41%
IDTC   28.50  May 22.50  IQJ EX  7.13  281   21.37   5.29%   5.29%
DBCC   16.63  May 15.00  BQD EC  2.38  1620  14.25   5.26%   5.26%
SPYG   18.13  May 15.00  YQG EC  3.88  564   14.25   5.26%   5.26%
BEAM   17.44  May 15.00  BAQ EC  3.00  1744  14.44   3.88%   3.88%
ADPT   24.06  May 22.50  APQ EX  2.25  1488  21.81   3.16%   3.16%
------------------------------------------------------------------
VTEL    5.16  Jun  5.00  VQE FA  1.13  937    4.03  24.07%  24.07%
VVUS    4.75  Jun  5.00  VVQ FA  0.63  3225   4.12  21.36%  15.29%
DMRK   10.38  Jun 10.00  DQN FB  1.81  10     8.57  16.69%  16.69%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

HRBC   10.94  May 10.00   BQ EB  1.63  162    9.31   7.41%   7.41%
IDTC   28.50  May 22.50  IQJ EX  7.13  281   21.37   5.29%   5.29%
DBCC   16.63  May 15.00  BQD EC  2.38  1620  14.25   5.26%   5.26%
SPYG   18.13  May 15.00  YQG EC  3.88  564   14.25   5.26%   5.26%
BEAM   17.44  May 15.00  BAQ EC  3.00  1744  14.44   3.88%   3.88%
ADPT   24.06  May 22.50  APQ EX  2.25  1488  21.81   3.16%   3.16%
------------------------------------------------------------------
VTEL    5.16  Jun  5.00  VQE FA  1.13  937    4.03  24.07%  24.07%
DMRK   10.38  Jun 10.00  DQN FB  1.81  10     8.57  16.69%  16.69%
VVUS    4.75  Jun  5.00  VVQ FA  0.63  3225   4.12  21.36%  15.29%
******************************************************************
Company Descriptions
******************************************************************
ADPT - Adaptec, Inc.  $24.06  *** Technical Breakout? ***

ADPT is a supplier of bandwidth management solutions that enhance
total system performance by increasing the data transfer rates 
between personal computers, servers, peripherals and networks. 
Adaptec posted earnings on Thursday after the close and beat 
estimates by $0.06, with revenues increasing 12%. On Friday
BancBoston RS reiterated its buy rating & raised future earnings
estimates. With Friday's $2.00 climb on heavy volume, ADPT may be
ready to breakout of its recent trading range.

May 22.50 APQ-EX Bid=2.25 OI=1488 CB=21.81 RC=3.16% RNC=3.16% 

Chart = http://quote.yahoo.com/q?s=ADPT&d=3m
******************************************************************
BEAM - Summit Technology, Inc.  $17.44  *** No More Glasses ***

Summit Tech, Inc. develops, manufactures and markets ophthalmic 
laser systems designed to correct common vision disorders such as
nearsightedness, farsightedness and astigmatism. With the positive
earnings report and merger completion on Thursday, Summit appears
ready to run. Coverage was initiated Friday by Hambrecht & Quist
and BEAM climbed $2.63. The recent pattern has been a gap-up in
price, followed by lateral consolidation.

May 15.00 BAQ-EC Bid=3.00 OI=1744 CB=14.44 RC=3.88% RNC=3.88% 

Chart = http://quote.yahoo.com/q?s=BEAM&d=3m
******************************************************************
DBCC - Data Broadcasting Corp  $16.63     *** New Outlook! ***

Data Broadcasting Corporation is a leading provider of real-time
market data to the individual traders and investors. The company
delivers real-time stock quotes, financial and news information
to three million users via PCs, wireless FM, cable, satellite and
the Internet. With its Capital Management Sciences division, DBCC
is the leading provider of fixed income portfolio analytics used
for valuation and risk management purposes. Recent activities; a
new project with MSFT on 'streaming' video integration and their
recent IPO (marketwatch.com) just reported blow-out earnings. We
also favor the short-term technical support near $14.

May 15.00 BQD-EC Bid=2.38 OI=1620 CB=14.25 RC=5.26% RNC=5.26% 

Chart = http://quote.yahoo.com/q?s=DBCC&d=3m
******************************************************************
HRBC - Harbinger Corporation  $10.94  *** Earnings ***

Harbinger develops, markets, and supports software products and 
provides computer communication network and consulting services 
to enable businesses to engage in electronic commerce. HRBC is
rocketing higher on earnings speculation with the preliminary
announcement that they will report better than expected numbers.
The chart is very bullish but once the report is actually posted
(within 2 weeks?) we would expect a pullback to near-term support.

May 10.00 BQ-EB Bid=1.63 OI=162 CB=9.31 RC=7.41% RNC=7.41% 

Chart = http://quote.yahoo.com/q?s=HRBC&d=3m
******************************************************************
IDTC - IDT Corporation  $28.50  *** 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. 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 taken advantage of conservatively, deep ITM. This is just
another chance to enter the play, as IDTC consolidates laterally.

May 22.50 IQJ-EX Bid=7.13 OI=281 CB=21.37 RC=5.29% RNC=5.29% 

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
******************************************************************
SPYG - Spyglass, Inc. $18.13  *** Ready to Move? ***

Spyglass Inc., develops, markets and distributes Internet enabling
technologies, content services and professional services that 
enable various non-PC devices to work with the Internet. Spyglass
may be turning the corner after posting a profitable 2Q. They are
definitely moving with the recent acquisition of Navitel and new
deals with Microsoft, Sony and now Inktomi. The tape is bullish
and showing signs that SPYG may try to test the December highs.

May 15.00 YQG-EC Bid=3.88 OI=564 CB=14.25 RC=5.26% RNC=5.26% 

Chart = http://quote.yahoo.com/q?s=SPYG&d=3m
******************************************************************
                         - JUNE PLAYS -
******************************************************************
DMRK - Damark International Inc.  $10.38  *** Internet Retail ***

Damark International, Inc., a marketing solutions provider, brings
a range of products, programs and services to consumers via direct
mail, telesales and the Internet. Damark beat estimates for the
1Q (still a loss) but what seems to be driving the price is the
Internet expansion. If Damark improves its Internet commerce, will
the buyers come? That remains to be seen. The tape is bullish and
the post-earnings dip appears to be complete.

Jun 10.00 DQN-FB Bid=1.81 OI=10 CB=8.57 RC=16.69% RNC=16.69% 

Chart = http://quote.yahoo.com/q?s=DMRK&d=3m
******************************************************************
VTEL - VTEL Corporation $5.16  *** Speculators Only ***

VTEL Corp. designs, manufactures, markets, services, and supports 
integrated, multi-media digital visual communication systems which
operate over private and switched digital communication networks.
This is a technical play on a bullish chart as VTEL concentrates
on Internet applications. This is approximately a 14% monthly
return (higher return equates to higher risk) and our cost basis
is below the April low.

Jun 5.00 VQE-FA Bid=1.13 OI=937 CB=4.03 RC=24.07% RNC=24.07% 

Chart = http://quote.yahoo.com/q?s=VTEL&d=3m
******************************************************************
VVUS - Vivus, Inc. $4.75  *** More Speculators Wanted! ***

Vivus, Inc. focuses on the design and development of products for 
the treatment of erectile dysfunction whose products include MUSE
(alprostadil) and ACTIS. Vivus took off in early March after 
announcing it had received a patent for the treatment of female 
sexual dysfunction. Add the licensing of MUSE in Europe, a patent
for "new" erectile dysfunction treatment, and blowout earnings 
(helped by a one-time payment), and a great speculation play is 
created. The chart is very bullish with overhead resistance near
$6. If this fits your risk/reward tolerance, then this sexy stock
is for you!

Jun 5.00 VVQ-FA Bid=0.63 OI=3225 CB=4.12 RC=21.36% RNC=15.29% 

Chart = http://quote.yahoo.com/q?s=VVUS&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
IHS      4.81 May   5.00 IHSEA  0.69  14.29  105  363
EDFY     9.38 May  10.00 YQEB   1.31  14.00  126  922
SAVLY   12.06 May  12.50 QVYEV  1.50  12.44  197 1535
NSM     12.50 May  12.50 NSMEV  1.50  12.00 2496 3479
HYPT    12.50 May  12.50 QPIEV  1.38  11.00    4  137
IDX      9.88 May  10.00 IDXEB  1.06  10.76  193 1310
BEAM    17.44 May  17.50 BAQEW  1.88  10.75 1074 1701
BNYN    12.31 May  12.50 QYNEV  1.31  10.66  102  204
MAST    14.69 May  15.00 QACEC  1.56  10.64  127  404
HLYW    24.69 May  25.00 HWQEE  2.63  10.63   13  256
USWB    22.44 May  22.50 QWBEX  2.38  10.58  165  146
IDTC    28.50 May  30.00 IQJEF  3.00  10.53  278 3438
PSQL     7.13 May   7.50 PQSEU  0.75  10.53   20  759
ALRM    21.75 May  22.50 QLREX  2.25  10.34   17    7
ITCD    25.00 May  25.00 QIJEE  2.56  10.25   10  359
SKYT    17.13 May  17.50 MMQEW  1.75  10.22  302 3435
PRST     7.38 May   7.50 PQKEU  0.75  10.17    5  666
MCHM     9.88 May  10.00 QQEB   1.00  10.13  371 1572
ESPI    12.50 May  12.50 AQEV   1.25  10.00  519 1628
WAVO     7.50 May   7.50 WKQEU  0.75  10.00  191 1716
EDFY     9.38 Jun  10.00 YQFB   2.00  21.33   41  394
WAVO     7.50 Jun   7.50 WKQFU  1.50  20.00   39  109
MCHM     9.88 Jun  10.00 QQFB   1.88  18.99   19 1403
VLNC     7.13 Jun   7.50 VHQFU  1.31  18.42   50 1096
SAVLY   12.06 Jun  12.50 QVYFV  2.19  18.13    7  506
IDTC    28.50 Jun  30.00 IQJFF  5.00  17.54   84  894
ESPI    12.50 Jun  12.50 AQFV   2.19  17.50   10 1110
NSM     12.50 Jun  12.50 NSMFV  2.19  17.50   58  270
TDFX    17.38 Jun  17.50 FQFW   3.00  17.27    3  342
IMG     11.00 Jun  12.50 IMGFV  1.88  17.05   68  275
IHS      4.81 Jun   5.00 IHSFA  0.81  16.88   23  231
GLBL    12.31 Jun  12.50 GQOFV  2.00  16.24    3  576
PTEK    14.88 Jun  15.00 TQOFC  2.38  15.97  155  783
IDX      9.88 Jun  10.00 IDXFB  1.56  15.82   32 1212
BEAM    17.44 Jun  17.50 BAQFW  2.75  15.77   66  636
HLYW    24.69 Jun  25.00 HWQFE  3.88  15.70    7  190
PRGN    22.50 Jun  22.50 GQPFX  3.50  15.56    5   11
CLST     7.38 Jun   7.50 EQLFU  1.13  15.25   10  745
DUSA     9.88 Jun  10.00 QDUFB  1.50  15.19   50  223
PHYC     5.00 Jun   5.00 PQHFA  0.75  15.00   10  490
ATIS     5.00 Jun   5.00 TIQFA  0.75  15.00 2352 1316
MAST    14.69 Jun  15.00 QACFC  2.19  14.89   12  113
FGCI     7.19 Jun   7.50 JZQFU  1.06  14.78   29  145
HPH      9.75 Jun  10.00 HPHFB  1.44  14.74   10  162
EDFY     9.38 Jun  12.50 YQFV   1.38  14.67   70  128
ARTT    13.25 Jun  15.00 AOQFC  1.94  14.62   10  331
GADZ     9.50 Jun  10.00 EQKFB  1.38  14.47  301  288
DCTM    15.63 Jun  17.50 QDCFW  2.25  14.40   50  100
SKYT    17.13 Jun  17.50 MMQFW  2.44  14.23  109 2240
Z        9.69 Jun  10.00 ZFB    1.38  14.19  210  308
CRUS     7.06 Jun   7.50 CUQFU  1.00  14.16   55  398
PSQL     7.13 Jun   7.50 PQSFU  1.00  14.04   75  151
IFMX     7.25 Jun   7.50 IFQFU  1.00  13.79   41  441
MCRE     6.88 Jun   7.50 MQZFU  0.94  13.64   20   25
CERN    17.00 Jun  17.50 CQNFW  2.31  13.60   10 1308
CYCH    15.75 Jun  17.50 KBQFW  2.13  13.49   22 1270
ABTE     7.00 Jun   7.50 QZBFU  0.94  13.39   10 2735
USWB    22.44 Jun  22.50 QWBFX  3.00  13.37   45   65
CPWR    24.38 Jun  25.00 CWQFE  3.25  13.33  108  174
SRCM    21.88 Jun  22.50 SQFX   2.88  13.14   20  146
ZONA    22.88 Jun  25.00 NQZFE  3.00  13.11    1   12
TWMC    15.31 Jun  17.50 TQTFW  2.00  13.06    5   64
OMKT    13.50 Jun  15.00 OQMFC  1.75  12.96    5  396
DBCC    16.50 Jun  17.50 BQDFW  2.13  12.88   61  974
ABRX    17.50 Jun  17.50 IQOFW  2.25  12.86    5    5
PCMS     5.84 Jun   7.50 PQPFU  0.75  12.83  360 1215
PXD     11.69 Jun  12.50 PXDFV  1.50  12.83   20  134
APOL    24.75 Jun  25.00 OAQFE  3.13  12.63    3    6
CELG    18.94 Jun  20.00 LQHFD  2.38  12.54   20   93
CLCX     4.50 Jun   5.00 QXTFA  0.56  12.50   15  100
MERQ    28.19 Jun  30.00 RQBFF  3.50  12.42   24   60
HS       5.06 Jun   7.50 HSFU   0.63  12.35  145  773
INSO     7.13 Jun   7.50 IJQFU  0.88  12.28   15  181
REGI     6.63 Jun   7.50 QRGFU  0.81  12.26   10   10
MMCN    24.56 Jun  25.00 CMQFE  3.00  12.21   85   20
VTEL     5.13 Jun   7.50 VQEFU  0.63  12.20   93  985
AMKR     9.75 Jun  10.00 QELFB  1.19  12.18    3 2855
CDE      4.63 Jun   5.00 CDEFA  0.56  12.16  106  389
PCTL     8.25 Jun  10.00 PTQFB  1.00  12.12   53  166
AXNT     9.38 Jun  10.00 XQEFB  1.13  12.00  102  103
CYTC    19.56 Jun  20.00 YQKFD  2.31  11.82    8   20
SPYG    18.06 Jun  20.00 YQGFD  2.13  11.76    4   15
GHV      6.94 Jun   7.50 GHVFU  0.81  11.71   20  229
TRL     13.88 Jun  15.00 TRLFC  1.63  11.71   25  215
GERN    11.75 Jun  12.50 GQDFV  1.38  11.70   54 2142
EGGS    14.00 Jun  15.00 EGQFC  1.63  11.61  106 1028
STRX     9.69 Jun  10.00 TQQFB  1.13  11.61   26  194
BD      12.44 Jun  12.50 BDFV   1.44  11.56   10  125
UAG      9.75 Jun  10.00 UAGFB  1.13  11.54   14   37
CKP      9.81 Jun  10.00 CKPFB  1.13  11.46   62  142
ASDV    10.94 Jun  12.50 QDVFV  1.25  11.43   55  488
HLX      6.06 Jun   7.50 HLXFU  0.69  11.34   30  375
SPLH     9.38 Jun  10.00 QRXFB  1.06  11.33   15   30
GEMS     3.31 Jun   5.00 GQMFA  0.38  11.32    4  749
CATP    14.44 Jun  15.00 TQPFC  1.63  11.26   10  871
FLC     10.00 Jun  10.00 FLCFB  1.13  11.25   80 5064
HBI      5.00 Jun   5.00 HBIFA  0.56  11.25    5  576
TNSI    26.75 Jun  30.00 JQTFF  3.00  11.21    5  282
ADAC     7.25 Jun   7.50 QABFU  0.81  11.21   10   25
VIRS    14.50 Jun  15.00 VQPFC  1.63  11.21   10  318
PRGN    22.50 Jun  25.00 GQPFE  2.50  11.11   10  105
MWHS    16.94 Jun  17.50 MQRFW  1.88  11.07   10  135
TBI     13.63 Jun  15.00 TBIFC  1.50  11.01   15   10
NSM     12.50 Jun  15.00 NSMFC  1.38  11.00 1930 1258
RATL    29.63 Jun  30.00 RAQFF  3.25  10.97    5   22
BTIM    12.00 Jun  15.00 QBOFC  1.31  10.94   10  412
OMPT    17.75 Jun  20.00 QTTFD  1.94  10.92   28   37
ONSL    25.38 Jun  30.00 QOLFF  2.75  10.84   24 1892
SPGLA    7.50 Jun   7.50 SQEFU  0.81  10.83    8   20
DCTM    15.63 Jun  20.00 QDCFD  1.69  10.80  168   40
TDFX    17.38 Jun  20.00 FQFD   1.88  10.79   26  125
DIMD     4.66 Jun   5.00 DAQFA  0.50  10.74   33  164
PETM     9.31 Jun  10.00 PQMFB  1.00  10.74  217 2681
SIPX    14.00 Jun  15.00 UQXFC  1.50  10.71    2  129
CORR    11.69 Jun  12.50 CHQFV  1.25  10.70   40  228
NMGC    11.69 Jun  12.50 GJQFV  1.25  10.70   10   45
ZD      15.81 Jun  17.50 ZDFW   1.69  10.67   10  141
TWMC    15.31 Jun  20.00 TQTFD  1.63  10.61    6  570
CS       9.44 Jun  10.00 CSFB   1.00  10.60  306 3569
AND      8.31 Jun  10.00 ANDFB  0.88  10.53   12  620
PPD     28.50 Jun  30.00 PPDFF  3.00  10.53    5  148
GMGC     5.38 Jun   7.50 GGQFU  0.56  10.47  747   99
DGN     12.00 Jun  12.50 DGNFV  1.25  10.42   25  585
CYGN     9.00 Jun  10.00 YNQFB  0.94  10.42   20  236
ICO      9.69 Jun  10.00 ICOFB  1.00  10.32   50   59
CYCH    15.75 Jun  20.00 KBQFD  1.63  10.32    9  570
METZ    27.88 Jun  30.00 QZEFF  2.88  10.31    7   33
HRBC    10.94 Jun  12.50 BQFV   1.13  10.29   42  130
SMOD    13.38 Jun  15.00 UYQFC  1.38  10.28    4  218
IOM      4.88 Jun   5.00 IOMFA  0.50  10.26   52  396
PPOD    12.81 Jun  15.00 QPPFC  1.31  10.24   24  139
MAST    14.69 Jun  17.50 QACFW  1.50  10.21    4   81
SNC     29.38 Jun  30.00 SNCFF  3.00  10.21   10  838
AG       9.88 Jun  10.00 AGFB   1.00  10.13   27   25
KEA     24.81 Jun  25.00 KEAFE  2.50  10.08   20   62
UBB     24.81 Jun  25.00 UBBFE  2.50  10.08  500  301
CTI      9.94 Jun  10.00 CTIFB  1.00  10.06   11   67
OXHP    19.94 Jun  20.00 OQXFD  2.00  10.03    2  579
ESPI    12.50 Jun  15.00 AQFC   1.25  10.00   34 1074
WAVO     7.50 Jun  10.00 WKQFB  0.75  10.00   60  259
PSQL     7.13 Jul   7.50 PQSGU  1.56  21.93   10  158
USWB    22.44 Jul  22.50 QWBGX  4.88  21.73    9  189
NUHC     4.63 Jul   5.00 NTQGA  1.00  21.62   50  314
BNYN    12.31 Jul  12.50 QYNGV  2.38  19.29    5  225
PTVL    26.00 Jul  30.00 QUTGF  4.75  18.27    3  454
PRST     7.38 Jul   7.50 PQKGU  1.31  17.80   25  376
DIMD     4.66 Jul   5.00 DAQGA  0.81  17.45   35  932
APAC     3.25 Jul   5.00 AWQGA  0.56  17.31   10  532
WAXS    12.00 Jul  12.50 WXQGV  1.94  16.15   13  362
MERQ    28.19 Jul  30.00 RQBGF  4.50  15.96    5   78
NMGC    11.69 Jul  12.50 GJQGV  1.81  15.51    5  457
INPR     4.03 Jul   5.00 BLQGA  0.63  15.50    5  970
SPYG    18.06 Jul  20.00 YQGGD  2.75  15.22    7 1076
BRKT    14.94 Jul  15.00 BUQGC  2.25  15.06   12  355
USWB    22.44 Jul  25.00 QWBGE  3.38  15.04  314  304
CORR    11.69 Jul  12.50 CHQGV  1.75  14.97   30  185
HS       5.06 Jul   7.50 HSGU   0.75  14.81   20  736
REV     22.88 Jul  25.00 REVGE  3.38  14.75    5  845
PCTL     8.25 Jul  10.00 PTQGB  1.19  14.39   26  753
TALK    12.00 Jul  12.50 QQKGV  1.69  14.06  114 4689
RPC     17.00 Jul  17.50 RPCGW  2.38  13.97   10  190
TSEMF    6.81 Jul   7.50 TWQGU  0.94  13.76   10  224
QHGI    12.38 Jul  12.50 HQGGV  1.69  13.64    7   41
CS       9.44 Jul  10.00 CSGB   1.25  13.25  167 4825
BNYN    12.31 Jul  15.00 QYNGC  1.63  13.20   20  604
FILE     8.56 Jul  10.00 ILQGB  1.13  13.14   55  320
APM      2.94 Jul   5.00 APMGA  0.38  12.77   3024269
ZD      15.81 Jul  17.50 ZDGW   2.00  12.65   15 1714
PKD      4.00 Jul   5.00 PKDGA  0.50  12.50   10 2561
ESST    10.00 Jul  10.00 SEQGB  1.25  12.50   46  361
SCIXF    9.63 Jul  10.00 SXQGB  1.19  12.34   16  694
SOI     24.38 Jul  25.00 SOIGE  3.00  12.31    2  440
FHS     13.81 Jul  15.00 FHSGC  1.69  12.22   50  293
SFSK     9.75 Jul  10.00 FQKGB  1.19  12.18   10  687
WIT     19.06 Jul  20.00 WITGD  2.31  12.13  135  639
SQNT    10.94 Jul  12.50 SQQGV  1.31  12.00   51  154
GLM     14.88 Jul  15.00 GLMGC  1.75  11.76  294 1440
PDE     11.69 Jul  12.50 PDEGV  1.38  11.76   47   60
INTL    13.88 Jul  15.00 TPQGC  1.63  11.71   10   92
CMIN     9.63 Jul  10.00 LQCGB  1.13  11.69    5   33
HSTR     7.00 Jul   7.50 HQFGU  0.81  11.61   30   30
MCOM     7.56 Jul  10.00 MQMGB  0.88  11.57    5  355
LOR     19.50 Jul  20.00 LORGD  2.25  11.54  653 2161
BDT      5.44 Jul   7.50 BDTGU  0.63  11.49   10   42
COMS    26.13 Jul  27.50 THQGY  3.00  11.48   46 2555
DAOU     6.00 Jul   7.50 QQXGU  0.69  11.46    8  603
ADPT    24.06 Jul  25.00 APQGE  2.75  11.43   65  551
BNE     18.75 Jul  20.00 BNEGD  2.06  11.00   10   59
NDE     16.50 Jul  17.50 NDEGW  1.81  10.98   14  139
BS       9.13 Jul  10.00 BSGB   1.00  10.96   10 2481
ZILA     4.00 Jul   5.00 QWCGA  0.44  10.94   21  684
KEG      3.44 Jul   5.00 KEGGA  0.38  10.91    4 1311
CVTY     9.19 Jul  10.00 OVQGB  1.00  10.88   15  123
VICR    14.06 Jul  15.00 VIQGC  1.50  10.67    5  165
CIEN    23.50 Jul  25.00 EUQGE  2.50  10.64  188 5249
MRVC    10.00 Jul  12.50 VQXGV  1.06  10.63   55  737
CDO     26.31 Jul  30.00 CDOGF  2.75  10.45   10  148
KLIC    22.88 Jul  25.00 KQSGE  2.38  10.38   10  280
MLG     10.88 Jul  12.50 MLGGV  1.13  10.34   25   86
IGL     25.00 Jul  25.00 IGLGE  2.56  10.25    3 3392
DK       8.56 Jul  10.00 DKGB   0.88  10.22   60  366
WDC      8.06 Jul  10.00 WDCGB  0.81  10.08   20 1936
PSFT    13.69 Jul  15.00 PQOGC  1.38  10.05   33 2423
CTAL    13.69 Jul  15.00 QANGC  1.38  10.05  100  116
CPQ     22.44 Jul  22.50 CPQGX  2.25  10.03   72 1596





*******************************
NAKED PUT SECTION
*******************************
Internet Trading...Broker Selection

The first thing you need to do before you begin trading is select
a broker. The terrible thing is, this is one of the most confusing
things you will ever do. Here are some guidelines that will help
determine what factors are important and how to make the
correct selection.

The most commonly used Internet services are 'discount' brokers.
They are designed for do-it-yourself investors that manage their
own money without guidance from a professional financial advisor.
These brokers will make trades for you at a lower price because
they provide very little in the way of service. In the past, an
investor could expect almost no additional information from these
low-cost brokerages but companies like E*trade have changed the
industry by providing research tools, analyst reports and the
latest in on-line trading technology. They also offer access to
IPO's ('initial public offerings'), a product that previously was
unavailable to the average investor.

Most of these Internet trading services require a minimum deposit
of $2000 to open an account and they are generally insured by the
same agency as full-service brokers. (The government-sponsored
Securities Investor Protection Corporation covers accounts up to
$100,000 in cash and $400,000 in assets.) Discount brokers trade
in all stocks that are listed on the major exchanges and they
also offer mutual funds, foreign stocks, bonds and options.

The primary complaint with discount brokerages is their lack of
service. The best 'buy' and 'sell' decisions are useless unless you
are able to act on them and cheap commissions are meaningless if
you can't close a trade or speak to a representative when the need
arises. Another area of concern is 'efficient' order execution and
many investors say this is the most important quality necessary
in trading.

One way to find out how well a broker performs these functions is
to ask other traders. Most financial websites have message boards
where people can relate their past experiences and attitudes in
regard to a particular subject. Use these chat sites to narrow
the field before completing the final research on a prospective
company.

The ultimate goal is to find a broker that gives you everything
you need at the lowest possible cost. Next week, we will examine
some of the advantages of a full-service brokerage.

Good Luck!
------------------------------------------------------------------
                      *** 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 (3 Weeks to the May expiration date)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt     Profit  ROI    Monthly
Sym    Picked Price        Price   Bid     /Loss          ROI

CYCH   15.94  15.75   May  15.00  1.63  *$  1.63  23.1%  16.7%
ENMD   24.75  26.69   May  20.00  1.50  *$  1.50  22.6%  16.3%
IMG    11.25  11.00   May   7.50  0.38  *$  0.38  14.4%  15.7%
PTEK   16.25  14.88   May  12.50  0.63  *$  0.63  16.2%  14.1%
CUST   34.88  37.25   May  22.50  1.00  *$  1.00  12.5%  13.6%
PAIR    9.63  12.81   May   7.50  0.44  *$  0.44  18.6%  13.4%
PTVL   22.94  26.00   May  17.50  0.81  *$  0.81  15.0%  13.0%
CMTO   29.94  31.13   May  22.50  0.69  *$  0.69  10.3%  11.2%
XCED   18.50  18.63   May  15.00  0.56  *$  0.56  12.6%  10.9%
CYCH   18.88  15.75   May  12.50  0.50  *$  0.50  11.7%  10.2%
VRIO   62.88  71.00   May  40.00  1.56  *$  1.56  11.0%   9.6%
CDIS   29.63  32.00   May  25.00  0.69  *$  0.69   8.7%   9.5%
PAMC   33.25  34.25   May  20.00  0.63  *$  0.63   8.7%   9.4%
NSIT   27.75  27.00   May  20.00  0.50  *$  0.50   8.3%   9.0%
AEIS   32.63  27.69   May  25.00  0.56  *$  0.56   7.9%   8.6%
IDTC   30.44  28.50   May  20.00  0.50  *$  0.50   7.6%   8.2%
NETG   44.94  40.44   May  25.00  0.94  *$  0.94   9.5%   8.2%
NAV    43.56  52.31   May  35.00  0.75  *$  0.75   7.8%   6.8%
BNYN   17.38  12.31   May  12.50  0.56   $  0.37   9.2%   6.6%
DELL   38.25  41.19   May  30.00  0.63  *$  0.63   7.6%   6.6%
DELL   43.63  41.19   May  35.00  0.88  *$  0.88   9.1%   6.6%
NMR    27.81  27.38   May  22.50  0.44  *$  0.44   7.0%   5.1%
NWAC   29.25  34.06   May  25.00  0.50  *$  0.50   6.3%   4.6%

Dropped Plays: ONSL

-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   28.00  May 22.50  OEQ QX  0.31  0     22.19   5.16%
DBCC   16.63  May 15.00  BQD QC  0.88  678   14.12  14.91%
HLYW   25.00  May 20.00  HWQ QD  0.50  245   19.50   9.09%
IDTC   28.50  May 20.00  IQJ QD  0.50  202   19.50   8.06%
MAST   14.75  May 12.50  QAC QV  0.38  79    12.12   9.43%
NETG   40.50  May 25.00  NUG QE  0.94  342   24.06  10.40%
PAMC   34.50  May 22.50  QMC QX  0.44  50    22.06   5.99%
TWMC   15.44  May 12.50  TQT QV  0.50  141   12.00  13.38%
VWRX   25.63  May 20.00  QVW QD  0.31  15    19.69   5.75%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

DBCC   16.63  May 15.00  BQD QC  0.88  678   14.12  14.91%
TWMC   15.44  May 12.50  TQT QV  0.50  141   12.00  13.38%
NETG   40.50  May 25.00  NUG QE  0.94  342   24.06  10.40%
MAST   14.75  May 12.50  QAC QV  0.38  79    12.12   9.43%
HLYW   25.00  May 20.00  HWQ QD  0.50  245   19.50   9.09%
IDTC   28.50  May 20.00  IQJ QD  0.50  202   19.50   8.06%
PAMC   34.50  May 22.50  QMC QX  0.44  50    22.06   5.99%
VWRX   25.63  May 20.00  QVW QD  0.31  15    19.69   5.75%
AEIS   28.00  May 22.50  OEQ QX  0.31  0     22.19   5.16%
******************************************************************
Company Descriptions
******************************************************************
AEIS - Advanced Energy Ind.  $28.00    *** Awesome Outlook! ***

Advanced Energy Industries is the leading manufacturer of power
delivery systems that are critical in the manufacturing of chips,
data storage media, flat panel displays, and other products using
thin-film technology. Within its comprehensive product portfolio
of direct current (DC), low/mid-frequency and radio frequency (RF)
solutions, the company sells products critical in applications
ranging from compact and digital video disks, flat panel displays,
logic semiconductor devices, among many other applications. They
just reported excellent margin and revenue growth from a sharp
increase in new orders for semiconductor companies.

May  22.50  OEQ QX  Bid=0.31  OI=0  CB=22.19  ROI=5.16%

Chart = http://quote.yahoo.com/q?s=AEIS&d=3m
******************************************************************
DBCC - Data Broadcasting Corp  $16.63     *** Back In Favor! ***

Data Broadcasting Corporation is a leading provider of real-time
market data to the individual traders and investors. The company
delivers real-time stock quotes, financial and news information
to three million users via PCs, wireless FM, cable, satellite and
the Internet. With its Capital Management Sciences division, DBCC
is the leading provider of fixed income portfolio analytics used
for valuation and risk management purposes. Recent activities; a
new project with MSFT on 'streaming' video integration and their
recent IPO (marketwatch.com) just reported blow-out earnings. We
also favor the short-term technical support near $14.

May  15.00  BQD QC  Bid=0.88  OI=678  CB=14.12  ROI=14.91%

Chart = http://quote.yahoo.com/q?s=DBCC&d=3m
******************************************************************
HLYW - Hollywood Entertainment  $25.00 *** Incredible Growth! ***

Hollywood Entertainment owns and operates Hollywood Video retail
stores, the second largest video store chain in the United States,
and Reel.com, the leading web-based entertainment site and movie
store with over 100,000 VHS and 2,500 DVD titles for sale. HLYW 
just reported excellent earnings, driven by strong growth in same
store sales. The company added 62 new stores in the first quarter
and the expansion is continuing at the pace of approximately one
new store per day. Reel.com also announced blow-out earnings with
revenues up 530%. A post-earnings dip is appropriate but we like
the bullish chart and a chance to own this stock under $20.

May  20.00  HWQ QD  Bid=0.50  OI=245  CB=19.50  ROI=9.09%

Chart = http://quote.yahoo.com/q?s=HLYW&d=3m
******************************************************************
IDTC - IDT Corp.  $28.50     *** 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.
Another week, another entry point!

May  20.00  IQJ QD  Bid=0.50  OI=202  CB=19.50  ROI=8.06%

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
******************************************************************
MAST - Mastech Corporation  $14.75     *** On The Rebound! ***

Mastech is a worldwide provider of high value information and
technology services including e-business solutions, enterprise
solutions implementation, applications development, applications
management, and software modernization services, on a time and
materials or fixed time/fixed price basis, including offshore
delivery options. With over 5,500 staff, Mastech delivers its
services to more than 900 clients around the globe. Lots of new
contracts and agreements as MAST focuses on developing Internet
solutions for the future

May  12.50  QAC QV  Bid=0.38  OI=79  CB=12.12  ROI=9.43%

Chart = http://quote.yahoo.com/q?s=MAST&d=3m
******************************************************************
NETG - Netgravity  $40.50     *** Pure Internet Speculation ***

NetGravity is a leading provider of mission-critical Internet
advertising and direct marketing solutions. NetGravity delivers
a range of comprehensive software & service solutions to manage,
target and analyze online campaigns. The Company's worldwide
customer base includes many of the leading e-commerce sites,
advertising agencies, and web publishers. This company adheres
to its name by defying the natural laws of stock market physics,
like most other companies in the industry. Speculation Only!

May  25.00  NUG QE  Bid=0.94  OI=342  CB=24.06  ROI=10.40%

Chart = http://quote.yahoo.com/q?s=NETG&d=3m
******************************************************************
PAMC - Provident American  $34.50     *** Internet Insurance ***

Provident American is an insurance company specializing in the
marketing of managed care health insurance by underwriting unique
affordable health care and life policies to individuals and small
businesses. PAMC's managed care products are sold by independent
brokers but they have Internet outlets and agreements with AOL to
offer health insurance online. New coverage with a 'Buy' rating
and a 12-24 month target price of $75.

May  22.50  QMC QX  Bid=0.44  OI=50  CB=22.06   ROI=5.99%

Chart = http://quote.yahoo.com/q?s=PAMC&d=3m
******************************************************************
TWMC - Trans World Entertainment  $15.44     *** Own This One!***

TWMC is a specialty retailer of compact discs, prerecorded audio
and video cassettes and related accessories. They operate stores
across the U.S and in the Virgin Islands. TWMC's stock jumped in
February on better-than-expected earnings and a recently launched
Internet site is expected to boost revenues. A new merger with
Camelot Music (482 retail stores) is expected to boost the bottom
line in 1999. We like the support near our cost basis of $12.00.

May  12.50  TQT QV  Bid=0.50  OI=141  CB=12.00  ROI=13.38%

Chart = http://quote.yahoo.com/q?s=TWMC&d=3m
******************************************************************
VWRX - VWR Scientific Products  $25.63   *** Hot Sector ***

VWR Scientific Products is one of the nation's leading suppliers
of laboratory equipment, chemicals and supplies to the scientific
marketplace. Serving leading research organizations, VWR operates
an extensive national distribution network consisting of highly
automated regional service centers. They also provide outsourced
procurement services to the industry. VWR offers about 350,000
products from more than 1,800 vendors. The company just reported
record earnings on strong sales and growth from new acquisitions
completed last year and the chart is 'technically' very healthy.

May  20.00  QVW QD  Bid=0.31  OI=15  CB=19.69  ROI=5.75%

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




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