Option Investor
Newsletter

Daily Newsletter, Thursday, 07/08/1999

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The Option Investor Newsletter         Thursday  7-8-99
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.
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
        7-01-99          High     Low     Volume   Advances Decline
DOW    11126.89 - 60.47 11211.11 11092.07  824,088k  1,299   1,657
Nasdaq  2771.86 + 28.82  2775.52  2731.12 1047,000k  2,016   1,929 
S&P-100  718.31 -  1.44   723.45   713.56   Totals   3,315   3,586
S&P-500 1394.42 -  1.44  1403.13  1386.67            48.0%   52.0%
$RUT     454.75 +  2.06   454.80   450.65
$TRAN   3451.39 - 23.51  3474.35  3415.15
VIX       19.87 -  0.34    21.81    19.68
Put/Call Ratio      .54    
*************************************************************


A day late but here at last.

The profit taking I expected on Wednesday finally appeared in
earnest today. Wednesday was a non-day as far as trading went.
The markets failed to fall but also failed to sustain any rally
attempts. Today looked more like a profit day. After dropping -90
shortly after the open it looked like we had an instant reversal
but after trying to hit +25 in two separate attempts the Dow
finally gave in to the slow bleed as sellers outnumbered buyers.
The good news in my mind is the repeated bounce off 11,100. Look
at this chart. After passing 11,100 Friday morning the threshold
became surprising support. We tested it Friday at the close, 
Tuesday morning, three times Wednesday and again this morning.
I was very glad to see us hold slightly above it at the close
today.   

 


The Nasdaq is setting up for a continued breakout on the back 
of the Yahoo earnings. Even though Yahoo went down, (more later),
the Internet sector was positive. After setting a new high 
on Tuesday the Nasdaq only took one day off to rest and moved
up again today in spite of the Dow problems. The Nasdaq
finished only four points off it's high for the day and had
positive momentum at the close. We did not match Tuesday's
intraday high but did set a new record close.

 


I was watching the very short term gainers on my live quote
program at the close. It provides a list of the top 100 gainers
for the last five minutes every 30 seconds. It is constantly
updating as new stocks appear and old ones drop off. At the 
close almost all the major Internet stocks appeared as buyers
jumped onboard. I think this is a good omen for Friday. The
Dow and NYSE ticks both went positive at the close as well.

There were many upgrades today, positive earnings surprises
and minor gains in the bond market. Sounds like a recipe for
success but we had to pay the profit piper. We will not know
if the toll paid today is enough until the close tomorrow but
I am betting on it. I bought the close today.

Big winners included Hewlett-Packard, (HWP), who received an
upgrade and a new price target of $125, gained +6.50.
Apple Computer (AAPL) gained +4.13 after Robertson Stephens
made bullish comments and raised it's price target to $75.
General Electric, who manages earnings with the best of
companies, announced earnings that BEAT the street by $.01.
This is no minor feat when you consider they have over 3 bln
shares outstanding. GE dropped -.94 after announcing the record
earnings. Biogen announced earnings after the close that beat
street estimates by +$.02 and should impact the sagging drug
sector tomorrow.

The big winner (loser) today was of course Yahoo. Yahoo beat
the street's estimates of $.08 last night with $.11 and hit 
the official whisper number. OOPS! By hitting the whisper
number and having a very positive conference call it avoided
the big sell off syndrome of late AND injected a hope vaccine
into the entire Internet sector. HOWEVER, by only hitting the
whisper number and failing to blow away estimates it suffered
investor flight. The amateurs bought into the news at the open
and ran the stock up to almost $175, a +7 gain from yesterdays
close but the euphoria was short lived. After dropping back to
$168 within minutes there was a midday rally prompted by the 
Nasdaq strength but the sellers finally took control and YHOO
hit a low of $162 before the close. If you follow my plays and 
my recent commentary on Yahoo you know this was a picture perfect
execution of the plan. I wrote calls at the high of the day and
shorted YHOO at $172 after it rolled over. Don't get me wrong.
I am not negative on Yahoo. I am just playing the trend it has
established the last two earnings cycles. We got lots of hate
mail when we switched from call recommendations to puts in the
Tuesday newsletter but for the life of me I can't imagine why.
We always recommend getting out of calls before the earnings
on any stock. We have been warning of the expected drop in YHOO
for at least a week. I strongly urge some readers to actually 
read the play descriptions and not just the options listed.
This play was as good as it gets. We recommended it at $135, 
got an entry point on profit taking at $120 and it went to $189. 
It has already dropped over $10 since we changed to puts. If you 
did not make money on this play you need to re-evaluate your 
trading profile or be in mutual funds.

I met with a good friend today that just started trading options
recently. He has made all the rookie mistakes AND admitted it.
I think he is finally ready to start trading profitably. Down
several thousand dollars of hard earned money, he finally stopped
and faced the facts. I wish I could impart the facts to every
new reader we get BEFORE they spend thousands of dollars getting
educated. Ignorance, stupidity and impatience are very costly.
Once you recognize the facts of life you can be a good trader.
Some facts never change. The law of gravity for instance. You
can refuse to accept it but it still exists. You can have twenty
people tell you that buying July options $20 out of the money
with a week to go is stupid but may disagree until you have a 
bunch expire worthless on you. Suddenly the light bulb goes on 
and you realize those $.50 options are cheap for a reason.
We are here to try and educate new readers as painlessly as 
possible. Please reread the Top Ten Rules for Option Trading
and try not to break more than two a day. All experienced traders
will break them routinely. It is like driving 65 in a 55. We
know the risk and are willing to take the responsibility for the
eventual ticket but we push the envelope. We are still humbled
routinely by bad decisions but we place the blame squarely on
ourselves. Knowingly breaking the rules is one thing, ignoring
the rules is another.

Summer Fridays are notorious for low volume and yawner afternoons
but if 11,100 was really the bottom today we could see a good
bounce as traders take positions in front of the next round of
earnings next week. I can't of course guarantee the market will
move up but I do not see a very big risk of it moving down tomorrow.
Pick your plays carefully and sell too soon.

Have a great weekend!

Jim Brown
Editor


*********************************
TOP TEN RULES FOR OPTION TRADING
*********************************

1. Never put all your money into one play. As soon as you do
   Murphy's Law will take control and you will be broke.
   With a $2000 account put $1000 into two plays. $5000 should
   divide into 2-3 plays, $10,000 = 3 to 5 plays maximum. I 
   strongly recommend NEVER playing more than 3 to 5 positions 
   at one time. You cannot watch more than three and act 
   decisively when the situation demands action. 

2. Never hold a position over an earnings report. Historically
   the number of stocks that rise substantially after an 
   earnings report is less than one in ten. Sure there are
   a rare few that gap open on great earnings but far more
   gap down. To gap open they must beat the whisper number
   by a LARGE margin AND have a good conference call. To go
   down they only need to meet the whisper, meet the estimates,
   miss the estimates, prewarn any problems or just plain
   not be positive enough in the conference call. Traders
   leaving after playing the earnings exert enough pressure
   on the price as it is without bad news.

3. Never play deep OUT OF THE MONEY call options. Sure they
   are cheap but they are cheap for a reason. They are like
   playing roulette and betting on any one number. If you 
   hit the payoff is 35 to 1 but the odds of being hit are
   38 to 1. 

4. Never put in a MARKET BUY before the open. You will more
   than likely get filled at the high of the day. Enthusiasm
   is rampant at the open and everything costs more (as a rule)
   than it will an hour later.

5. Never place a market order for a thinly traded option. You
   may take out the current ask and be very shocked at how high
   the next ask was. Several times I have seen fills more than 
   $2 over the current ask quote.

6. Always pick a sell price you would be happy to get BEFORE
   you buy an option. Immediately after purchase place a limit
   sell for that price. You will be surprised how many times
   you will sell on an intraday spike that you did not expect.
   See #5 for why. Decide how much you are willing to risk on
   the trade BEFORE you make it. Sell when that limit is reached.
   Ask anybody who ever had an option expire worthless. They
   will all tell you now "they wish they had sold". At the time
   emotion will always convince you tomorrow is turnaround day.
   Hundreds of thousands of contracts expire worthless EVERY
   month. Turnaround never came for them.  

7. Never bet against the market/sector. The trend is your friend.
   It does not matter why the market/sector is going down you
   will still lose your money. 85% of stock movement is due to
   market/sector movement and not stock fundamentals.

8. Always sell when you pass 100% profit. If you still like the
   play take half the money and buy back in at a higher strike.
   Once you sell they can't take the profit away from you. Don't
   play 100% of the money again. Double or nothing will eventually
   get you nothing. Our recommendation is really to sell at 35%
   profit but we know how the greed factor works.

9. Emotion is your enemy, logic is your friend. Never trade on
   emotion. There is no such thing as "it has to go up", "it
   can't go down". The market does not care what you think or 
   hope. It is ruthless and makes its own rules. You should say
   this 50 times a day, "past performance is not a guarantee of
   future results".

10 Never buy on impulse. If you just heard the news, it is already
   to late. Plan your buys during non-market hours. Once the bell
   rings your mind is clouded, emotion takes over. 
   Plan your strategy, execute your plan. When in doubt, stay out.

PS Cashflow is king. It is very easy to make 25% every two weeks
   but very hard to make 100% routinely. 25% on $10,000 every two
   weeks for a year is $65,000. (without benefit of compounding)
   Take a profit over and over and over. 




Market Posture
***************
As of Market Close - Thursday, July 8, 1999 

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

DOW Industrials   10,500  11,000  11,126    BULLISH   7.01
SPX S&P 500        1,315   1,355   1,394    BULLISH   7.01
OEX S&P 100          660     690     718    BULLISH   6.29
RUT Russell 2000     390     450     455    BULLISH   6.29

NDX NASD 100       2,110   2,220   2,375    BULLISH   6.29
MSH High Tech      1,010   1,080   1,202    BULLISH   6.19

XCI Hardware         900     950   1,035    BULLISH   6.17
CWX Software         675     700     800    BULLSIH   6.17
SOX Semiconductor    410     425     510    BULLISH   6.10
NWX Networking       525     545     595    BULLISH   6.25
INX Internet         500     510     565    BULLISH   7.01

BIX Banking          680     720     714    Neutral   6.29
XBD Brokerage        410     425     436    BULLISH   7.01
IUX Insurance        645     660     654    Neutral   6.29

RLX Retail           900     910     940    BULLISH   6.29
DRG Drug             375     400     373    Neutral   7.01
HCX Healthcare       750     800     764    Neutral   7.01
XAL Airline          180     190     171    BEARISH   5.21
OIX Oil & Gas        285     310     307    Neutral   5.13



Posture Alert
Strong earnings from Yahoo, and Broadcast.com helped 
out the Nasdaq even though these two issues closed down 
on the day. General Electric also pleased the street 
with a penny surprise, which could be a preview to more positive 
earnings from other international conglomerates. 
With plenty of earnings due out next week and the 30-yr Treasury 
below 6%, the posture board remains dominated by bulls.


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

members.OptionInvestor.com/marketposture
 



Market Sentiment
****************
Thursday, July 08, 1999 

Yahoo + GE = ?

Earnings season has just begun, and things are looking bright as 
General Electric and Yahoo both beat analyst expectations. Even though 
both stocks sold off (buy on rumor, sell on news), they both had great 
runs going into earnings. This should be a preview of things to come. 

General Electric is KNOWN for COMING IN AT expectations, not 
surpassing. They manage their earnings about as good as anyone, but 
are always in-line with expectations. For a company with 3.3 BILLION 
shares outstanding, beating by a penny is a phenomenal feat. What you 
can expect from these solid earnings, is a potential run-up in some of 
the other big names going into their quarterly reports (AOL, IBM, MOT 
etc.). As evidenced by the strength in broad technology Thursday, many 
investors missed the huge run-up in Yahoo, and will try to make it up 
on others. 

Here at Pinnacle Capital, we always weigh in on sentiment indicators to 
help shape the way we believe the market will be trending. The latest 
Investors Intelligence Survey showed that Bullishness decreased and 
Bearishness increased. From a contrarian standpoint, this is good for 
the market. We also looked at the amount of OEX calls and puts, and 
what we see is building support in the 700-715 range. From a technical 
standpoint combined with the recent run-up in the indexes, we would 
expect the market to start consolidating/and or selloff. However, with 
the buildup in support (OEX 700-715), the lack of any significant 
selloff (assuming no disaster on Friday), interest rates remaining 
close to 6% or below, and major corporate earnings due out the next two 
weeks, we could be getting poised for another takeoff. Do you Yahoo?


 

 

 


Bullish Signs:

OEX Put Buying:
From a contrarian standpoint, the amount of puts in the 700-715 range 
is giving good support for this market and could help fuel additional 
upside potential.

Market Posture:
Several indexes breaking into new highs, including networking, 
software, and semiconductors.

Investor Intelligence:  
As a contrarian indicator, the percent of Bullish investors decreased 
by over 3% and the percent of Bearish investors increased by 2%.

Russell 2000: 
Trending above both moving average, and also above key 450 benchmark.




Mixed Signs:

Interest Rates:
With the help of the FED, the 30-yr Treasury is beginning to retrace 
back under the key 6% level.


Advance/Decline Line:
After checking up last week, the A/D line is beginning 
to roll over and could prove Bearish if decliners out pace advancers in 
the week ahead. 

 

BEARISH Signs:
  
Peak Open Interest:  
The contraian put-call ratio clocking in at 1.09 suggesting bullish
sentiment picking up steam.



OTM Call Analysis

As we move through July's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 680-750 among option
speculators. As we have been documenting, excessive out-of-the-
money (OTM) call may serve as overhead resistance.




July Expiration Cycle
OEX OTM Call Analysis (Open Interest July 680-750)
Date                 Open Interest     Change %    Alert

Friday, June 19           35,225        -
Friday, June 25           63,342        +79.8%
Friday, July 02           87,833       +149.3%

Market Sentiment at a Glance     Friday     Tues      Thurs  
Indicator                        (7/02)    (7/06)    (7/08) Alert

Pinnacle Index (OEX):          

                    (680-750)      3.5       3.6      1.6
Overhead Resistance (680-700)      1.2       1.4       .7
Underlying Support  (645-660)      2.5       2.4      2.8
                    (580-660)      6.6       6.5      6.9

Put/Call Ratios:

CBOE Total P/C Ratio                .5        .5       .5
CBOE Equity P/C Ratio               .3        .3       .4
OEX P/C Ratio                      1.1       1.0      1.4


Peak Open Interest (OEX):

Puts                              670        600      600
Calls                             680        680      730
P/C Ratio                          1.10      1.18      1.1

Market Volatility Index (VIX):	

CBOE VIX                          19.19      20.27    19.87 



Investors Intelligence:

Bullish                         52.60%
Bearish                         27.20%


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.

 
OEX Pinnacle Index              Friday      Tues      Thurs
Benchmark                        (7/02)    (7/06)    (7/08)

                    (680-750)    3.5        3.6       1.6   
Overhead Resistance (680-700)    1.2        1.4        .68

OEX Close                        716.28     714.28    718.31
 
Underlying Support  (645-660)    2.5        2.4       2.8
                    (580-660)    6.6        6.5       6.9

 
Average ratings: 
Resistance levels 2.0 / Support Levels .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is building 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                (7/02)    (7/06)     (7/08)

CBOE Total P/C Ratio             .48	 .48		.53
CBOE Equity P/C Ratio            .33       .33        .44
OEX P/C Ratio                   1.13       .97       1.42


Peak Open Interest   Friday           Tues            Thurs
Strike/Contracts     (7/02)           (7/06)         (7/08)

Puts                 600 / 10,820    600 / 12,345    600 / 12,344
Calls                670 / 10,017    680 / 11,046    730 / 11,364 
Put/Call Ratio       1.10              .92             1.09


 

 




VIX
Volatility Index    Major
Date                Turning Point       VIX

October 97          Bottom              54.60      
July 20, 1998       Top                 16.88         
October 8, 1998     Bottom              60.63
January 11, 1998    Top                 26.38
March 4, 1999       Bottom              28.15   
May 14, 1999        Top                 25.01 

July 8, 1999                            19.87  *


 


 






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


Index   Last        Tue    Wed    Thu   Week
Dow      11126.89  -4.12  52.24 -60.47 -12.35
Nasdaq    2771.86  -4.42   6.26  28.82  30.66
$OEX       718.31  -2.00   5.47  -1.44   2.03
$SPX      1394.42  -3.10   7.74  -1.44   3.20
$RUT       454.75   0.04  -3.86   2.06  -1.76
$TRAN     3451.39 -38.04  -3.05 -23.51 -64.60
$VIX        19.87   1.34   1.36  -0.34   2.36

Calls               Tue    Wed    Thu   Week

AOL        127.69   5.69   4.06   2.69  12.44  New, earnings run
VISX        93.00   2.81   0.06   5.00   7.87  Another new high
TXN        147.50   0.31   3.38   2.13   5.82  $175 price target 
VRIO        72.00  -1.06   3.31   2.94   5.19  On the move
VRSN        89.63   3.13  -2.19   3.75   4.69  Poised to go higher
MSPG        53.31  -0.44  -2.94   8.06   4.68  Still more rumors
BBY         77.50   4.25   1.75  -1.50   4.50  Entry point?
SLR         71.25   0.69   0.69   2.75   4.13  Breaking out
HWP        105.81  -1.38  -1.06   6.50   4.06  Big jump today
INKT       139.88   2.38  -3.25   4.38   3.50  New, Internet play
VOD        208.81   3.75   2.19  -2.63   3.31  Analysts ratings
INTC        65.75   0.38   0.50   1.38   2.26  Earnings on Tues.
BRCM       138.81   1.85  -3.00   2.94   1.79  Strong chip sector
IBM        134.00  -1.25   1.81   1.19   1.75  Earnings surprise??
SUNW        71.75  -1.75   1.56   1.88   1.69  Nearing new high
JDSU       170.88   6.00  -5.25   2.25   3.00  2-for-1 split!
DRIV        35.00  -0.13  -0.19   1.75   1.43  New online product
CTXS        60.75   1.06  -1.31   1.13   0.88  Wait for a bounce
LU          71.56  -0.63   1.75  -0.25   0.87  Earnings run time
SNE        113.56  -1.63   0.19   2.25   0.81  Closed at highs
SONE        48.00   1.19  -0.63   0.25   0.81  Strong sector
MSFT        92.56  -2.44   2.75   0.25   0.56  Holding $92
NXTL        49.63   0.38  -0.19   0.25   0.44  Light volume
TOM         76.63   0.13   1.44  -1.31   0.26  Splits on Monday
MOT         97.94  -1.38  -2.19   3.19  -0.37  Big volume today
NOK         94.13   0.69   1.19  -2.31  -0.43  Entry point??
CSCO        66.44  -0.38  -0.44   0.19  -0.63  Taking a breather
COF         56.00  -0.06   0.81  -1.44  -0.69  Use caution
CAH         68.63  -0.44   0.19  -0.81  -1.06  Flat drug sector
MMCN        48.19  -0.56  -1.06   0.31  -1.31  Re-grouping
PFE         37.19  -0.69  -0.19  -0.56  -1.44  Range bound
NT          89.00   1.13  -0.19  -2.50  -1.56  Support at 10-dma
ICIX        30.00  -0.25  -1.13  -0.25  -1.63  Lacking volume
EFII        54.38   1.69  -3.38   0.00  -1.69  Set stops close
QCOM       142.25  -2.00  -2.81   2.81  -2.00  Added to S&P 500
SGP         51.75  -0.19  -2.06  -0.50  -2.75  Consolidating
NSOL        78.38  -1.75  -3.69   0.31  -5.13  Dropped, nose-dive

Puts

YHOO       164.44  -3.00  -8.06  -2.63 -13.69  Good but not great
AET         88.13  -1.63  -1.69   2.19  -1.13  Dropped, reversal
GBLX        40.03   2.13  -0.88  -1.22   0.03  Under the 50-dma
MCK         32.56   0.69  -0.44   0.06   0.31  $33.50 resistance
AT          70.00  -0.69   0.81   0.56   0.68  Couldn't go higher
FON         51.00   0.13  -0.13   0.88   0.88  Consolidating??
WLP         85.00  -0.44   1.50   1.38   2.44  Dropped, bottoming






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


CALLS:
******

NSOL $78.38 +0.31 (-5.12)  NSOL never recovered from its 
last-minute nose-dive on Tuesday (just after reaching a new 
52-week high of $87.50!).  The following day the stock 
proceeded to shed another 3.69 points after an early 
morning attempt to keep its head above the $80 mark.  Today 
offered no sliver of hope as NSOL closed in the proximity 
of its daily low.  The apparent reversal of NSOL within 
this positive market is good enough reason for us to drop 
it.  Plus in this earnings' season, better plays abound.


PUTS:
******

AET $88.13 +2.19 (-1.13) Aetna had a strong bounce after a 
weak past couple of days.  We got a good downside move from
AET after it broke through solid support at $88.  We saw it 
move down to under $84 a share.  That is more than $4 move 
in two days.  But after today's bounce on no news, it is back 
above the $88 level again.  This is an example of a reversal 
in the trend and momentum is looking strong so we are no 
longer recommending opening new plays on AET.  Hopefully 
your stops pulled you out early today and you were able to 
lock in your profits from Tuesday and Wednesday.   

WLP $85.00 +1.38 (2.44) WLP has been a successful put for 
us the past couple weeks but it has been showing signs of 
a bottom this week.  Today's release of a few positive news 
articles has sparked some buying interest and effectively 
ended our play.  Wellpoint released news of a new deal with 
Providence Health plan where WLP will provide coverage for 
360,000 new participants.  Also Wellpoint's subsidiary, Blue 
Cross of California announced a new marketing and advertising 
program with the potential to attract lots of new customers.  
So if you stops haven't already gotten you out of the play, 
it is time to look for an exit point.



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





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






The Option Investor Newsletter         Thursday  7-8-99 
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

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

VRSN $89.63 +3.75 (+4.69) We mentioned in our last update that
we thought Wednesday would be a down day and, sure enough, it
was.  Hopefully those of you interested in getting into VRSN
options were able to get a nice fill yesterday.  VRSN dropped
as low $81.25 on Wednesday and then closed at $85.55.  Thursday
brought another strong day and the stock is now over $8 above
yesterdays low.  VRSN still is trading below its April high
of $94.13, but seems poised to break through this resistance.
MACD is very strong and with Yahoo! announcing strong earnings,
this should help keep other Internet related companies in the
spotlight until their earnings.  VRSN has earnings in two 
weeks and has a history of beating estimates.

VOD $208.81 -2.63 (+3.31) VOD gave back some of its recent
profits today, but is still positive for the week.  The stock
was kept on the "recommend list" at Goldman Sachs today, and
was reiterated "outperform" by Lehman Brothers.  VOD announced
yesterday that the company added 2.3 million customers in the
2nd quarter.  Tressan MacCarthy, an analyst at Credit Lyonnais
Securities Europe stated:  "Based on this quarter, they're adding
nearly 10 million customers a year, and the Christmas season 
will add much more, name me any business in the world that's 
adding customers at that rate." (Bloomberg.com) We are playing
this as mainly a split announcement play.  We see a 4-1 split
being announced at VOD's annual meeting on July 21.  

LU $71.38 -.25 (+.89) LU acted today very much like it did on
Wednesday.  The stock traded positive for most the day, but
couldn't hold on and lost just a fraction at the close.  LU
was on the receiving end of good and bad news.  The bad news
was a downgrade by AG Edwards from "accumulate" to "maintain".
The good news came from being added to Salomon Smith Barney's
list of "10+ Exceptional Names".  Though LU's stock closed
lower, it did reach another all time high today when it hit
the $73.13 mark.  Earnings are in two weeks and we expect to
see an earnings rally.

SONE $48.00 +.25 (+.81) SONE finished positive today, though
not by much.  The stock has gained less than a dollar so far
this week, but is still trading well above its 50-dma and should
start to see an earnings run soon.  With Yahoo! announcing such
strong earnings, the sector should benefit.  There is a little
support at $47, but wait for verification of a bounce off
this level before buying the dip.  For those that didn't know,
SONE is also one of 11 stocks in TheStreet.com E-Finance Index
and options started trading on this index on July 7th.  

DRIV $35.00 +1.75 (+1.44) DRIV had a nice gain today and closed
just off of the intraday high.  The company added Day-Timer
Digital to its online retail channel yesterday.  This partner-
ship will help add another strong product to DRIV's already 
large database of digital products.  MACD is positive and moving
up and we feel as the companies earnings date draws closer, the
stock will continue to benefit.  Earnings are scheduled for
July 21st. 

IBM $134.00 +1.19 (+1.75)  Another new high today! IBM hit 
$135.50 as the boxmakers and hardware companies enjoyed gains 
today after analysts made positive comments on the group. Fred 
Cohen, at Daiwa Securities, said that in this Internet oriented 
world, it is the infrastructure companies that will really 
benefit. He expects upside order surprises from IBM. Steve 
McClellan, of Merrill Lynch, said that the computer services 
industry will grow at a double digit rate for years. Now at 
$250 billion per year, it is expected to reach $318 billion in 
2002. In a continuing effort to shift its focus to this more 
profitable area of its business, IBM has announced that Toshiba 
will buy out IBM's stake in Dominion Semiconductor. IBM continues 
to team up with companies interested in making use of IBM's 
growing presence and expertise in the e-commerce world. Two 
noteworthy mentions are a deal with Maars Software, Ltd., of 
India, and an agreement with French retailer Galleries Lafayette 
worth 1.1 billion Euros over 15 years. Also, IBM already has 
customers lined up for its "Pizzazz" server, which it will roll 
out  in the fall.

NOK $94.13 -2.31 (-.43)  Nokia gained $1.19 on Wednesday, but 
lost $2.31 today after rival Ericsson continued its slide 
following the unexpected resignation of its chief executive 
on Wednesday. This may be good news for option investors, who 
now have another chance to buy NOK options. The stock is down 
in a sympathy move rather than a fundamental one. Watch for 
the stock to start back up again before buying. Meanwhile, 
NOK continues to push its WAP standard and to announce new 
contracts daily. Yesterday, a 100,000 block trade, suggested 
institutional buying. Earnings for NOK will be announced July 
22nd, before the open.

BBY $77.50 -1.50 (+4.50)  This has to be some kind of record. 
BBY has now set a new all time high for 7 days in a row. Where 
is the profit taking? After the huge long run it has enjoyed, 
it only gave up $1.50 on the day, its first negative close in 
7 days. It did lose $3.00 after hitting that new high, and 
closed near its low of the day--maybe it is in for a little 
more profit taking. If you are looking for an entry, watch it 
tomorrow. News today that the founder and chief executive has 
filed to sell 456,000 shares may have given investors pause. 
However, to put the sale in perspective, the shares he is 
selling were acquired through stock options, and only represent 
a small fraction of his 37 million shares. Although we don't 
have June sales numbers for Best Buy, Circuit City released 
same store sales that increased 8% last month. BBY is better 
managed, and should show strong June sales as well. 

VISX $93.00 +5.00 (+7.87)  VISX hit another new high today of 
$93.25 and closed right near that high. Yesterday the stock 
dipped $2.16 midday, but came right back to close up $.06. 
This stock is really giving us a good earnings run. VISX has 
been moving steadily higher, making our volatility warnings 
look unwarranted. Don't let it fool you. Although VISX looks 
very strong and it may continue up until it releases earnings, 
it has been known to move in big swings at times in the past. 
Also, some stocks are seeing profit taking a little ahead of 
earnings. Use stops as earnings approach, just in case. Earnings 
will be released Wednesday, July 14th after the close. VISX's 
700% rise in earnings over the last 8 months had Motley Fool 
eyeing the stock. In an Internet article out tonight, the Fool 
says that laser vision correction procedures are expected to 
grow from 200,000 in 1997 to 1.2 million next year, and 
competition notwithstanding, VISX, the dominant leader in the 
field, will benefit from that increase in procedures.

BRCM $138.81 +2.94 (+1.78)  After huge new high of $148.50 that 
BRCM set on Tuesday, we warned you that more correction was 
possible. It did pull back further on Wednesday, and dropped 
a bit at the open today before climbing to close just about 
where it closed on Tuesday. (Tuesday's close, however was $10 
lower than the high it set the same day.) The last time we 
covered BRCM in OI, it had just bought Epigram, a company that 
delivers high speed technology for networking PCs over 
home telephone lines. As Epigram's technology gets closer 
becoming the standard for the industry, BRCM stands to benefit 
big time, analysts were quoted as saying in an CNET article 
today. Semiconductor companies are expected to report strong 
earnings for the second quarter, and BRCM is in an especially 
hot niche within the chip sector. It is expected to reported 
$.16 on July 21st (a date still not verified by the company), 
but BRCM has handily beat analysts' estimates in past quarters.

PFE $37.19 -.56 (-1.44)  Pfizer, along with a few of the other 
drug stocks, has seen a decline in price this week. Analysts 
keep mentioning the recovery that has started in the 
pharmaceuticals, and PFE is a name that is recommended 
repeatedly. However, it is stuck in a range since it hit a 
split-adjusted near term high of $39.25 on Monday. (The 52 
week high is 50.) There was no news to account for the slight 
decline. Another call to PFE resulted in a somewhat clarified 
earnings date. PFE said that although it never announces an 
exact date, it expects to release earnings the at the end of 
the week of July 12th or the beginning of the next week. That 
means about one to one and a half weeks from now. There is 
still time for an earnings run.

HWP $105.81 +6.50 (+4.06)  Today Richard Chu, analyst at SG 
Cowen, reiterated his "strong buy" rating on HWP and 
upgraded the target price to $125.  He cited expectations 
of double-digit revenue growth for the company after 
several quarters of reporting zero growth.  His comments on 
the stock also aided the hardware sector in general.  The 
excitement pumped up HWP and amid the enthusiasm it set a 
new 52-week high when it peaked at $106.38 during intraday 
trading.  Volume was exceptional at 5.63 mln. shares 
exchanging hands.  This split candidate is expected to 
announce earnings August 16th.  HWP's last split was a 2:1 
in July of 1996 when it was around $80-85.  The stock is 
well above that level now and has enough shares authorized. 
In the news, HWP will continue its business relationship 
with Yokogawa even though their joint Japan venture will 
end.  Yokogawa is selling its 25% stake and HP Japan will 
become the sole subsidiary of HWP.  Hewlett-Packard 
supplied the computers and Yokogawa supplied the power 
units for the printers.  

INTC $65.75 +1.38 (+2.25)  Intel held its own in the mixed 
market yesterday and kept a fractional gain.  Again on 
average volume today, this leader of the semi-conductors 
forged ahead to tack on more points.  INTC faces overhead 
resistance at its 52-week high of $71.87.  This earnings 
play will end soon.  They are to report next Tuesday on 
July 13th.  Remember we never recommend holding over an 
earnings' announcement.  Please consider having any open 
positions closed prior to that time.  Its too risky even if 
the prognosis is for a positive report.   Yesterday, Intel 
announced a definitive agreement to acquire Softcom 
Microsystems, a privately held company, in an all cash 
transaction.  No further details were available.  Softcom 
develops and markets semi-conductor products used to 
transfer voice and data across the Internet and within 
traditional networks.

CTXS $60.75 +1.13 (+0.87)  At its recent new highs, CTXS 
suffered mild profit-taking yesterday and lost $1.31 at the 
close.   The good news is that it occurred only on about 
50% of its normal trading volume.   Considering the stock 
has made about 10% in gains since last week its quite 
natural for a stock to consolidate at some point.  Today 
the volume wasn't any better, yet CTXS recouped for a 
positive finish.  It may be wise to wait for a bounce on 
stronger volume before beginning a new position.   Earnings 
are expected July 20th.  

VRIO $72.00 +2.94 (+5.19) It appeared support was forming 
around $67-69 since last week, but all bets are off now.  
VRIO spiked up the last two days advancing $6.25!  The 
stock is heading for its overhead resistance at $78.  As 
has been the case during this stock's run-up the past 
couple weeks, the volume has been low to average.   Yet 
buyers are interested.  Investors seem to be responding to 
the software alliances Verio made with MSFT and AOL in 
June.  Plus, on June 23rd, Verio surpassed the 250,000 Web-
site milestone - just another notch in their belt as they 
prescribe themselves as the leader in this hot Web-hosting 
business.   Earnings are weeks away on August 20th.  

NXTL $49.63 +0.25 (+0.44)  NXTL has been relatively flat 
all week and volume has tapered off too.  It's formed a 
comfortable support level at $48-$50.   The stock hasn't 
been able to break its latest resistance at $50.75, the 52-
week high set a week ago last Wednesday.   You should wait 
for upward confirmation on strong volume before starting a 
new position on this momentum play.  Nextel and Sprint Corp 
(PCS) are getting unwanted publicity.  They are two of the  
wireless companies that begin charging airtime the moment a 
caller presses the send key whether or not the call 
actually makes a connection.   It's perfectly legal, but 
consumer advocates are up in arms.

MMCN $48.19 +.31 (-1.31)  The profit taking began late
Tuesday kicked in the last two days.  MMCN dropped $3.56
in the last two sessions.  Hitting a low of $45.38 early
in today's trading, MMCM started to regroup an shake off 
the drop.  What is encouraging is how MMCN recovered late 
the day.  After bouncing off support in the $45.00 area
it and trading in the range near $47.00 for most of the 
day, MMCN jumped over $1.00 in the last hour of the session.
As we mention Tuesday, MMCN was due for a pullback, and this
may have been it, especially considering the late day 
advance.  Volume today was over 671K, which is a little 
stronger than normal, and the earnings run may now resume,
as the are due to be released on July 15th.  We still suggest
keeping you stops tight.

MOT $97.94 +3.19 (-.37) MOT also got the pullback we 
mentioned in Tuesdays update.  Wednesday MOT fell $3.38
to $93.56 and recovered to close at $94.75 at days end.
Today was a whole different story.  Motorola came out of
the gate strong, with a steady advance through out the
day hitting $98.38 at its high, erasing all of Wednesdays
loss.  Volume today was better at 3.1 mln. shares.  Earnings 
come out on July 13th, we've had a pullback, and it would 
appear that the earnings run is back on track.  As always, 
assess your own risk profile, and keep you stops where you are 
comfortable.

NT $89.00 -$2.50 (-1.56) NT jumped up early Wednesday morning
making a new 52 week high at $93.50.  At that time the profit
began.  NT continued its fall today making a low of 
$88.75 and closing down $2.50 for the day.  The 10dma should 
provide support for Nortel.  What is a bit concerning is 
today's volume.  Today's fall was done on over 3.9 mln. shares.
Another upgrade from a hold to a buy from Warburg Dillon
Read Inc., and the announcement Nortell is launching a new 
Internet Services strategy may help to bolster NT.  Earnings
come out July 27th, but we would suggest you keep your stops
tight on this one.

SLR $71.25 +2.75 (+4.12) SLR broke through the $67.25 mark 
we told you about last week and it just kept going.  It seems to
have regained its momentum making a new 52 week high today at
$71.38.  Volume on today's move came on just under the norm with
slightly over 1.0 mln shares exchanging hands. The support 
level at $68.00 has held, and there is no new news to report at
this time.  Technically MACD is strong and the latest move has 
been solid as well.  We would suggest that you keep moving 
your stops up and let the market do the rest.

JDSU $170.88 +2.25 (+3.00) JDSU has had an erratic few days.
Profit taking started on Tuesday and continued into early 
today, dropping to $167.75 on Wednesday.  JDSU was fairly
flat for most of the day, until it was announced that they
would have a 2:1 effective July 23rd.  Trading was halted and
when it resumed, JDSU jumped almost $7.00 then fell back to
$170.88 to close up $2.25 for the day.  Now can we expect an
earnings run?  Probably so, but keep your stops tight to 
protect your current profits.  We would also suggest that
you check with your broker and make sure you have the correct
option symbols since the merger of Uniphase and JDS Fitel
was completed earlier this week.

SNE $113.56 +2.25 (+.81) Profit taking began Tuesday and 
continued into Wednesday. $110.00 seemed to provide support
for Sony. This morning started out strong, consolidated and got 
stronger at the close, making a new 52 week high at $113.69, 
closing almost at its high of the day.  Again what impressive 
here is that volume today was 344K, compared to an average of 
196K.  The Japanese electronic stocks have been strong lately, 
and appear to be just getting warmed up for further moves upward.
No new news, just a nice move up on good volume.  Adjust your
stops accordingly.

COF $56.00 -1.44 (-.69) We like the movement we saw in COF
in the week. It seems to have run into some resistance at
the $57.75 area and has fallen back the last two sessions.
Friday could be crucial for COF as we would like to see the 
earnings run resume.  Earnings are due out July 16th, and
we still have time for this play to develop, but we would
need to have $54 - $55 to hold as support.  Volume was 
a little stronger than average today at 992K compared to 
the average of 766K as well.  Keep your stops in place,
just in case the market doesn't cooperate with what we want.

TOM 76.63 -1.31 (+.25) TOM SPLITS MONDAY.  TOM started the
week out strong.  It has fallen back to support at $76.00
and just stayed there.  Again the retail industry is
strong right now, the sales are up and the earnings have 
been good.  As we stated earlier this is strictly as split
play, so what ever TOM does on Friday we are either going
take our profits or lick our wounds and move on.  Of course
they don't split until after the close on Monday, so you
could hold on if you want to.  We are planning on dropping
TOM over the weekend.  There is no news to pass along at 
this time, so let the market dictate your next move.

TXN $147.50 +2.13 (+5.81) TXN will report earnings on July 20 
(company confirmed) and is also a split candidate.  Their last 
split (2:1) was in November 1997 at about $100.  They do not 
currently have enough shares to make it happen and have yet to 
issue a proxy statement to shareholders for approval.  Just when 
we thought TXN might be flattening out, they deliver another new 
high.  The dips we keep waiting for haven't materialized, as TXN 
advanced both days since our last update.  TXN successfully 
pierced resistance of $145 on its way to new intra-day and 
closing highs of 147.69 and $147.50 (new resistance), 
respectively.  The close near its high is a good sign.  It 
probably helped that Morgan Stanley Dean Witter increased its 
price target to $175, citing their belief that a 20% premium to 
the S&P fairly values the company.  Lots of profit for the taking 
and tomorrow is Friday, so keep your stops set.  Target shoot on 
weakness and enjoy the ride.

MSFT $92.56 +0.25 (+0.56) Though we expected MSFT to take a day 
or 2 off in the wake of 6 straight daily gains, we're pleased 
with its ability to hold $92.  Even so, we're now checking our 
watch to see when MSFT will start its earnings run.  There are 
only 7 trading days left (July 19) to get the lead out.  If the 
market cooperates, we should continue up to between 95-100 by 
earnings, as indicated by the huge OI at these strikes.  In the 
news, MSFT will supply Bank of America, American Express, 
Citigroup and Schwab with content from MSN.  There's really 
nothing to get in the way of another $3-$8 increase tomorrow and 
next week, but keep your stops set in case of bad news.  Also 
watch out for eroding time value on July strikes.  As always, 
confirm market direction before starting a new play.

QCOM $142.25 +2.81 (-2.00) Yes, dreams can come true, as long as 
you analyze the market correctly.  Last night we noted in the 
Market Wrap that QCOM was buyable on yesterday's dip.  We cited 
CNBC early morning comments (missed by most other news services) 
that QCOM had gained 600 K new customers in Korea during the 
month of May and they are expected to announce a major equipment 
sale to Sprint in the next 2 weeks.  Not only that, but Lehman 
Bros. was "pounding the table" on QCOM while they raised earnings 
estimates by another $0.02.  Today's $2.81 gain is nice to see, 
but QCOM investors may have hit the mother lode in after hours 
trading, as QCOM traded up $9 at $151.  The news release states 
that QCOM will be replacing TransAmerica on the S&P 500.  As one 
exuberant message poster wrote, "!#$% &*#@, I AM ROLLING IN 
MONEY!!!!!!!!".  Earnings are July 20, 1999 at approx. 1:30 p.m. 
(company confirmed).  Remember too that since they announced 
their last split at $157, we may get another 2:1 split 
announcement at that time, though shareholders will need to vote 
on the issue (anyone object?).  We can pretty much confirm the 
direction of this stock tomorrow.  Just don't buy with a market 
order at the open and wait for any mid-day weakness.  Try not
to chase the stock price.

EFII $54.38 +0.00 (-1.69) Yesterday's selling on increased volume 
didn't look so great.  After reaching as high as $60 on Tuesday, 
and failing to hold its high today (see the chart), EFII could be 
headed south.  If there is a positive spin, it's that EFII showed 
only average volume today and was in need of a breather anyway 
after setting new highs.  EFII has earnings scheduled July 14 at 
1:10 p.m., Pacific (company confirmed)  Though we may see more 
gains on the way to earnings, exercise caution and don't get 
lulled into a false sense of security.  As we noted in prior 
write-ups, insiders have sold sizable positions in May and June.  
You certainly do not want to be a holder over earnings, 
especially with that knowledge.  Keep stops set to protect 
profits and start a new play only after you confirm market 
direction.

CSCO $66.44 +0.19 (-0.63) While CSCO seems to have been taking a 
breather for the last three days following 13 days of strong up-
trend, the technical chart is still well in the positive.  
Sellers, as hard as they try, have been met with willing buyers 
every time they step up pressure.  As we've said, individual 
investors can't possibly provide that kind of support and that 
mutual funds are putting $$$ to work in CSCO.  Continued strong 
volume supports that supposition.  NASDAQ has been working hard 
to build its record gains and may be subject to a day or 2 of 
selling pressure.  CSCO may yet succumb if its volume falls off.  
If you are going to buy the dip, just make sure you see the 
bounce off support of $65.50 (or anything less if you are more 
comfortable with a higher risk entry).  Earnings are scheduled 
for August 10 (company confirmed).  As always, confirm direction 
before starting a new play.

MSPG $53.31 +8.06 (+4.50) Rumors, rumors, rumors.  MSPG has been 
a buyout candidate since we stared coverage this week.  Yesterday 
looked pretty weak as excess volume flooded MSPG to a $2.94 loss.  
Today, word hit the Street that MSPG cancelled an analyst 
meeting, citing continuing merger discussions.  Companies do this 
only when the talks are getting serious.  That's all it took for 
investors to launch MSPG for a gain of over $8 today.  Volume was 
5 times normal - over 10 mln. shares.  As we've said before, dips 
are buyable until any announcement is made.  Earnings are 
scheduled July 28.  The downside is that no merger/acquisition 
announcement takes place and the price, thus the option premium, 
evaporates.  Confirm market direction and keep your stops in 
place to protect your profits.

ICIX $30.00 -0.25 (-1.63) Though technical indicators are still 
strong, we cautioned Tuesday that without volume, "expect further 
decline".  ICIX is sitting right at $30 support and could be 
ready to take off again, but it needs volume.  The price will 
likely fall without it.  Focus your attention there.  If it 
breaks south of $30, the next stop is $27.  There is no news; 
thus ICIX should be treated with caution.  The buy signal will be 
when ICIX convincingly moves back above $31.75.  Use stops to get 
out if the trade moves against you.  Otherwise confirm market 
direction before starting a new play.  Earnings are tentatively 
scheduled on July 28.  

SUNW $71.75 +1.88 (+1.69) Sun Micro climbed higher on Thursday 
and is now in striking distance to an all-time high, which is 
less than a point away.  The NASDAQ continues to be the driver 
in this bullish market and SUNW is reaping the benefits.  The 
news on SUNW is still made up of smaller articles that don't 
carry a lot of trading weight.  But that is fine though as our 
play revolves around the up coming earnings.  The earnings 
date is Thursday, July 22nd.  We still expect the 52-week high 
to fall in the short-term if the NASDAQ sustains its current 
momentum.  So trail your stops to lock in recent gains and 
look for volume on both the stock and options to start picking 
up now that we are inside of two weeks before the earnings 
date.   

SGP $51.75 -0.50 (-2.75) Schering suffered the pullback we 
all knew it would on Wednesday.  Ever since they announced 
that earnings would grow around 20% in 1999 the stock had 
been on a tear.  The stock jumped more than 20% in three 
weeks.  So it's understandable to have a day or two of profit 
taking.  But SGP was able to curb the slide today and begin 
consolidating at the 200-dma.  This could be indicative of 
a new rally ahead.  But we do need to make sure it holds 
support around $51.50 before opening new plays.  If it does 
decide to bounce and trend higher, we could be looking at 
two week rally ahead of earnings on July 21.

CAH $68.63 -0.81 (-1.06) Cardinal continued its sideways 
trading this week.  It traded lower most of the day on 
Thursday but did rally near the close to end at the day high.  
This is to be expected as the drug and healthcare sector 
have been consolidating also.  We are continuing to see 
signs of buyers like this afternoon when the market was 
dropping, CAH was rebounding.  Also, like most of the 
drug stocks, CAH is finding support at $68 from its 200-dma.  
We expect Cardinal to move with the group so keep your eye 
on other major players as well.  Any move above $70 would 
be considered a bullish signal.






******************************
SEE DISCLAIMER IN SECTION ONE
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The Option Investor Newsletter         Thursday  7-8-99
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

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

MCK $32.56 +.06 (+.31) MCK has gained a fraction this week, but
still sits under resistance at $33.50.  The stock lost ground
yesterday and traded in a range from $32 to $32.75 today.  No
sign yet that the stock will be able to gather any momentum
to break out of this slump.  With the consolidation recently,
the stock is in a position to move and we think that move will
be down.  We see the stock dropping to at least $30, the spot
of support.  Doesn't seem like much of a drop, but this would
be a drop of about 8 percent from current levels.  If the
stock rises intraday and bounces back down from the $33.25 to
$33.50 level, this would be another put buying opportunity.
MCK had another class action suit brought against it today.  
This one is going after the company financial advisors and
accountants who allegedly pursued the HBOC merger in a 
fraudulent manner.

YHOO $164.44 -2.63 (-13.69)  YHOO did get the Internets off 
to a roaring start when it came in at .11 versus the 
official estimate of .08, but it was no blowout.  The 
rumors were higher than that; but all in all, YHOO still 
beat the estimates.  Plus, the conference call was very 
positive, daily page views rose by 32%, registered users 
increased 38% to 65 mln. and revenues exceeded the 
consensus at $115 mln. versus $105 mln., motivated by 
strong advertising income.  Nonetheless, there was no split 
announcement and if history does repeat itself, then YHOO 
should continue to fall in the coming days.  Of course 
you're all waiting for the "but wait there's a catch".  In 
typical analyst exuberance, many came out with reiterations 
of previous ratings.  Thomas Weisel Partners, Banc of 
America Securities, Hambrecht & Quist, and CSFB all 
restated their "buy" rating on YHOO.  CSFB took it a step 
farther and raised its 1999 p/s estimates to .41 from .38 
and its 2000 p/s estimates to .67 from .58 in the same 
breath.  Needham & Co also put in their two-cents and 
reiterated their "hold" rating (oh boy!). With all this 
positive press, you should wait to confirm direction even 
in light of the recent losses YHOO has undergone in the 
past 3 days. This HIGH RISK PLAY is NOT for everyone!

GBLX $40.03 -1.21 (+0.03)  On Tuesday, GBLX added on a 
little over $2 likely due to positive news events unrelated 
to the Qwest battle over Frontier and US West.  In the two 
days that followed, GBLX gave up those gains on low to 
average trading volume.  It's back where it started sitting 
between its 50 dma of $50 and its 200 dma of $32.   A 
bearish indication would be for GBLX to break through this 
apparent bottom resistance of $40 and continue its descent.  
A conservative player will wait for further evidence of 
downward movement before opening a new play.  For the new 
readers, this put play is based on the competition between 
Global Crossing and its rival, Qwest, to acquire Frontier 
and US West.  Please view the detailed write-up of the 
events surrounding this contention in Sunday's newsletter.  
Since Tuesday, US West has signed no confidentiality pact 
with Qwest and emphatically stated it wants a merger of 
"equals" not a takeover bid.  The talks are continuing.
Some analysts are predicting it may be a draw with Qwest 
ending up with US West and Global Crossing acquiring 
Frontier.   Time will tell as the battle unfolds and news 
leaks to the press.   Consider using stops - news events 
can turn a play in an instant.   

FON $51.00 +0.88 (+0.88) Sprint had a lot in the way of news 
the past few days.  On Wednesday, Goldman started coverage 
of FON with a market-outperform but that was lower than both 
AT&T and MCI Worldcom which made the recommended list.  Also 
on Wednesday, People's Choice T.V. shareholders approved the 
pending merger with Sprint.  But this wasn't a major deal as 
PCTV's shareholders will receive only $10 a share.  Then 
today was an article about sketchy billing practices among 
wireless carriers.  Sprint PCS was cited as one example of 
rounding up minutes when billing customers and other such 
practices.  This helped bring FON down from the highs for 
the day.  So we had a lot to digest recently.  The stock has 
moved higher though and we are watching closely to see if 
a new trend is emerging.  For now we still think there is 
more downside left but keep your stops tight just in case.
 
AT $70.00 +0.56 (+0.69) Alltel climbed slightly on Wednesday 
and Thursday before being pushed back by resistance.  The 
stock jumped a dollar in early trading on Thursday.  This was 
sparked by an article about some lesser known survey of top 
500 businesses for value added resellers.  Alltel ranked 28 
in the survey but that only sounds impressive because that 
is where it ranked last year.  This pushed the stock up to 
resistance at the 50-dma and then promptly came back down.  
This is the kind of pattern we like to see on the put plays.  
When positive news fails to spark a sustainable rally.  So 
we now expect AT to challenge the short-term lows around 
$67.50.  Market willing, that mark will soon be replaced by 
another short-term low.  One final note, on Wednesday Goldman 
started all telecom stocks with ratings.  AT received the 
middle of the three possible ratings which is market-
outperform. 



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

AOL - America Online $127.69 +2.69 (+12.44 this wk)

America Online is the world's leading provider of Internet 
and online services.  It currently has over 17 million 
subscribers between its two divisions, America Online and 
CompuServe.  AOL Interactive Services product group operates 
the company's America Online service & manages the AOL Instant 
Messenger service, the AOL.COM Web site, and AOL NetFind.  
In 1999 it purchased Netscape Communications which brought 
the popular Navigator Web browser and the Netcenter Internet 
portal to AOL.  That's not the only purchase this year 
either.  In May they bought MovieFone Incorporated to add 
to an already commanding list of services.

We are adding AOL to the call list as the stock is off and 
running ahead of earnings.  They are scheduled to report 
their results on July 22 with expectations of 0.11 cents a 
share.  You can see by the chart that interest in the stock 
has come alive this week.  Volume is coming in well above 
what is average, pushing the stock up over 10% on the week.  
Yahoo kicked off the earnings season for Internet stocks this 
week and proved that profits are increasing as are ad revenue 
and page viewing growth.  This will help fuel other stocks, 
like AOL, as they head into their respective earning dates.  
And now that Yahoo's numbers are past you almost get the sense 
that the money pulling out of Yahoo is shifting to the other 
major Internet blue-chip, AOL, for their earnings run.  Plus 
we are still seeing strength in the NASDAQ and Internet 
issues in general.  From a technical standpoint, AOL moved 
above the 50-dma on Tuesday at $120.  This will be support 
if we get a pullback but don't expect too much.  AOL is 
looking very strong so you may want to consider finding an 
entry point in one of the intraday dips.  [editor's note:
believe it or not, AOL qualifies as a split candidate 
again over $120.  However, they only have 1.8 bln shares
authorized and already have over 1 bln outstanding.  At 
the moment there are no share holder meetings scheduled
until October.  So the best we can hope for is a 3:2 unless
they call for a special vote.  Best chance of an announcement
is at earnings. -Kimo]

News this week has been mostly general and sector related 
but on Tuesday they did announce a deal with the recent IPO 
Dr.Koop.com.  They signed a four year contract in which Koop 
agrees to pay AOL $89 million dollars.  The deal will link 
Dr.Koop to the millions of AOL users to potentially build 
their advertising and electronic sales. 

***there are no July options listed because there is 
only 1 week left before expiration.  However if you can
handle the risk, they are much cheaper but you will have
to be out of them before AOL completes its earnings run.

BUY CALL AUG-120*AOO-HD OI=4981 at $16.13 SL=12.50 higher delta
BUY CALL AUG-125 AOO-HE OI=4443 at $13.50 SL=11.00
BUY CALL AUG-130 AOO-HF OI=4611 at $11.00 SL= 8.75
BUY CALL AUG-135*AOO-HG OI=2952 at $ 8.88 SL= 6.75 more brave
BUY CALL OCT-135 AOO-JG OI=5427 at $15.25 SL=11.75
   
Picked on July 08th at  $127.69    P/E = 155
Change since picked       +0.00    52-week high=$175.50
Analysts Ratings    24-12-1-0-0    52-week low =$ 17.25
Last earnings 04/99 est=    .09    actual= .11
Next earnings 07/22 est=    .11    versus= .06
Average Daily Volume = 12.75 mln
Chart = http://quote.yahoo.com/q?s=AOL&d=3m
   
****

INKT - Inktomi Corp $139.88 +4.38 (+3.50 for the week)

Inktomi develops and markets scalable software applications 
to intensify and strengthen larger networks.  Their 
Internet search engine, which provides a fast and 
customizable Web search, is used by Yahoo!  Other products 
include a large-scale network caching application for ISPs 
(like AOL) and corporations that need help addressing 
capacity constraints in high-traffic network routes and 
also an Internet shopping engine for price comparison. 
Inktomi has operations in the US and UK.

INKT got serious on June 30th and tacked on a double-digit 
gain of $12.37 for a $131.50 finish.  The new "buy" rating 
that day by Pacific Crest Securities surely had its influence.   
INKT has so far not returned to its old support of about 
$112-116 as it rides upward.  The earnings' report from YHOO 
spread optimism and encouragement throughout the Internet sector 
today.  INKT advanced over $4 on moderate volume.  The stock 
faces near resistance of $145.13 (an intraday high hit on Monday) 
as its earnings' date approaches us next week on July 15th.  
Beyond that point, the 52-week high is at $159.12 - a height 
reached back in April around 1Q earnings.  You may have to look 
intraday for an entry point.  Remember this is an Internet and 
experiences volatility and wide intraday swings.  This play is 
HIGH RISK and requires the utmost attention.  Be careful.

On Tuesday, Henry Blodget of Merrill Lynch resumed coverage 
of INKT as an "accumulate" and also reiterated his "long-
term buy" rating.   His 12-month target price is set at 
$160.  He cited their "most important product, network 
caching software, is expected to grow from 1.6 bln. in 2000 
to more than 4 bln. in 2003" as his primary factor. 

***there are no July options listed because there is 
only 1 week left before expiration (which means more RISK).  
However if you can handle the risk, they are much cheaper.  
NOTE: you should be out on or before the 15th of July anyway.

BUY CALL AUG-135*KYQ-HG OI= 237 at $20.38 SL=15.50 ITM 4.88
BUY CALL AUG-140 KYQ-HH	OI= 556 at $18.00 SL=14.00
BUY CALL AUG-150*KYQ-HJ OI= 160 at $13.88 SL=11.25 Aggressive

Picked on July 8th at $139.88    PE = N/A
Change since picked     +0.00    52 week high=$159.12
Analysts Ratings    5-5-3-0-0    52 week low =$ 19.50
Last earnings 03/99 est= -.10    actual= -.09    surprise=10%
Next earnings 07-15 est= -.11    versus= -.13
Average daily volume = 2.24 mln.
Chart = http://quote.yahoo.com/q?s=INKT&=3m



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



NONE



******************
COMBINATION PLAYS   
******************
Dow Falls As Investors Move Back Into Technology Issues

U.S. stocks ended mixed on Thursday with blue chips falling as
investors moved funds into technology stocks, pushing the Nasdaq
further into record territory.


Wednesday, July 7

U.S. markets set new records again on Wednesday with key indices
climbing to new highs. Despite the records, NYSE declining issues
outpaced gainers leading analysts to speculate that the overall
market is showing signs of fatigue. The Dow closed at 11,187, up
52 points while the Nasdaq composite rose 6 points and broader
issues in the S&P 500 moved that index up 7 points to 1,395. The
long Treasury bond fell 5/32, pushing the yield higher to 6.05%.

Tuesday's new plays (positions/prices):

AOL  AUG105C/A110C $3.38  debit (probably as low as $3.25)
INTC OCT65C/JUL65C $4.00  debit (easy entry at target price)
GM  *JAN75C/JUL75C $11.12 debit (fell almost $1 at the open)
GM  *JAN75C/JUL70C $10.00 debit (new play on Tuesday prices)

*January 2001 LEAP

American Online (AOL) made a nice dip on Tuesday morning, filling
the target order at $3.38. It appeared that some positions could
have traded as low as $3.25. Intel Corp., (INTC) was up and down
during the first few hours of trading allowing an easy entry at
the suggested net debit. The General Motors (GM) play opened much
lower than expected. The stock price fell in the first few minutes
of trading and never really recovered. The target was adjusted
down to $11.12 but it actually traded lower than that during the
afternoon and the short position dissolved to almost nothing. In
light of the short-term weakness, we also opened a position at the
$70 strike (the highest time value premium). Both plays are very
long-term and we expect them to be profitable regardless of the
poor starting position.

Portfolio plays:

The Dow's move into record territory got a boost from General
Electric (GE), which rose $4 on anticipation of favorable second
quarter earnings. The move brought our bullish diagonal spread
to the upper edge of the profit envelope and without closing the
short term position early, we are at the mercy of the underlying
stock, hoping for a small consolidation after the report. Silicon
Graphics (SGI) finally gave back some recent gains, falling to
$16 near midday, allowing us to exit the short position at $1.75
debit (in favor of the new bullish trend). The play was already
profitable as a spread but we think there is new upside potential
to this issue and the risk is very small compared to the upside
profit potential. Compaq Computers (CPQ) also made a big recovery
today, moving closer to the sold position, a favorable change as
we approach the monthly roll-out to August positions.

Thursday, July 8

U.S. stocks ended mixed on Thursday with blue chips falling as
investors moved funds into technology stocks, pushing the Nasdaq
further into record territory. The Dow closed down 60 points at
11,126 while the Nasdaq Composite rose 28 points to another high
at 2,771. Losing issues outpaced advances 1,657 to 1,299 on the
New York Stock Exchange on volume of 820,023,100 shares. The 30
year U.S. Treasury bond jumped 23/32 lowering the yield to 5.99%.

Portfolio Plays:

Apria Healthcare (AHG) made a big move today, climbing to a high
of $20 and bringing new hope that our long-term diagonal spread
may yet recover to profitability. Hopefully, it can remain near
the current price until next week when we sell August positions.
Long term plays on oil stocks including Halliburton (HAL), Ensco
(ESV) and Global Marine (GLM) continue to perform well and even
Sepracor (SEPR) is showing signs of life as it tries to rebound
from a recent slump.

Our bullish debit spreads led the combos portfolio as Micron (MU)
gapped up $4, Earthlink (ELNK) moved up $5, Sequent (SQNT) came
back to the $16 range and even American Online (AOL) continued to
climb, gaining $2.56 to $127. Other long-term issues that also
performed well today include Worldcom (WCOM), up almost $5 and
Motorola (MOT), up $3.18.

Our new (2001) LEAP/Covered Call play on Tuesday received some
favorable interest, so today we are going to offer a few more of
these (very) long-term positions. These are all issues that are
commonly listed in the main section of the OIN and they have
excellent institutional coverage. The fundamental outlook for
each of these companies is positive and the long-term technical
histories are favorable. Please review the current news on each
play individually and make your own decision about the future
direction of the stock price.

Questions & comments on spreads/combos to ray@OptionInvestor.com


**********
NEW PLAYS
**********
SUNW - Sun Microsystems  $71.75     LEAPS/Covered-Calls

Sun Microsystems is a leading supplier of enterprise network
computing products including workstations, servers, software,
microprocessors, and a full range of services and support. The
company's products command a significant share of a rapidly
growing segment of the computer industry: networked computing
environments. Their products are also used for many demanding
commercial and technical applications in various industries.

Server manufacturers and other specialists in back-room hardware
are likely to beat earnings expectations for the second quarter
based on strong Internet infrastructure sales. SUNW is just one
of the companies likely to exceed consensus estimates because
hardware companies are currently benefiting from investments in
Internet infrastructure by companies that are putting more
operations online. Concerns over the Y2K technology glitch have
also helped and even as that starts to wind down, new E-commerce
revenues will offset the potential fourth-quarter downside. The
profitable trend for SUNW should continue well into the next
decade as their leading edge technology fuels profits in other
segments of the growing enterprise network industry.

PLAY (conservative/long-term):

BUY  CALL JAN-2001-75 ZSU-AO OI=444  A=$20.50
SELL CALL JUL-1999-75 SUQ-GO OI=5042 B=$0.62
INITIAL NET DEBIT TARGET=$19.50 TARGET ROI=120% (18 months)

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

*****

SLR - Solectron Corp.  $71.25     LEAPS/Covered-Calls

Solectron is an independent provider of customized manufacturing
services to electronics original equipment manufacturers (OEMs).
The company provides a wide variety of manufacturing services to
the industry. The company provides integrated solutions that span
the entire product life cycle; from pre-production planning and
design, to manufacturing, distribution and end-of-life product
service and support, for the world's leading electronics OEMs.
Solectron offers its customers competitive outsourcing advantages
such as access to advanced manufacturing technologies, shortened
product time-to-market, reduced cost of production and effective
asset utilization. The company has received hundreds of quality
and service awards from its customers in addition to the Malcolm
Baldrige National Quality Award. Solectron is the first company
to win the Baldrige Award for Manufacturing twice in the 11-year
history of the national program.

In mid-June, Solectron announced record sales for the 3rd quarter
of fiscal 1999. Revenues increased 68% from the third quarter of
fiscal 1998 to $2.2 billion for fiscal 1999. Net income for the
quarter was up 53% from the third quarter of fiscal 1998 to $75.7
million for fiscal 1999. Earnings per share were also higher for
this quarter; $0.29 compared to $0.20 for the third quarter of
last year.

This record-breaking quarter is based in part on the new shift
toward outsourcing by customers requiring fully-integrated and
optimized supply-chain solutions and the company is continuing to
invest in initiatives intended to globally integrate their design,
product development, manufacturing, distribution and support
services offerings. 

Deutsche Banc Alex Brown agrees with the positive outlook and
recently it initiated coverage of Solectron with a Buy rating.

PLAY (conservative/long-term):

BUY  CALL JAN-2001-70 ZSR-AN OI=0  A=$19.37
SELL CALL JUL-1999-75 SLR-GO OI=40 B=$0.56
INITIAL NET DEBIT TARGET=$18.50 TARGET ROI=120% (18 months)

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

*****

MDT - Medtronic Inc.  $78.81     LEAPS/Covered-Calls

Medtronic is the world's leading medical technology company
specializing in implantable and interventional therapies. Their
primary products include implantable pacemaker systems used for
the treatment of bradycardia, implantable tachyarrhythmia
management devices, ablation systems, mechanical and tissue
heart valves, balloon and guiding catheters used in angioplasty,
coronary and peripheral stents and stented grafts, neurosurgical
devices, and urological and digestive diagnostic systems.

Medtronic has been on a roll lately with  new product launches
and five acquisitions completed in fiscal 1999. They are ahead
of schedule in integrating all five companies and the next
decade in the best strategic position in their 50-year history.
Growing product lines are building new momentum on expanded and
strengthened sales and technical support organizations serving
all the world's major medical markets.

The key to success for companies like MDT is new developments in
the field of medical technology. MDT continues to be a leader in
this filed and recently the Food and Drug Administration backed
two of their newest devices, a prosthetic heart valve and a
defibrillator for certain heart patients.

The panel endorsed the Jewel AF defibrillator system for treating
patients with ventricular and atrial arrhythmias, two types of
irregular heartbeats. Medtronic calls the device the most advanced
implantable medical device in the world because it is designed to
treat heartbeat disturbances in both the lower and upper chambers.

The panel also backed Medtronic's Hancock 2 heart valve, the next
generation of its original Hancock valve, declaring it safe and 
effective for replacing diseased natural valves or other prosthetic
valves that had deteriorated. The company, which has fortified its
heart and artery business through recent mergers, makes two other
heart valves besides the Hancock series.

PLAY (conservative/long-term):

BUY  CALL JAN-2001-75 ZKD-AO OI=704  A=$18.50
SELL CALL JUL-1999-80 MDT-GP OI=1575 B=$0.68
INITIAL NET DEBIT TARGET=$17.50 TARGET ROI=120% (18 months)

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

*****

JNJ - Johnson & Johnson  $95.68     LEAPS/Covered-Calls

Johnson & Johnson is engaged in the manufacture and sale of a
broad range of products in the health care field. J&J's business
is divided into three segments: Consumer, Pharmaceutical and
Professional. The Consumer segment's principal products are
personal care and hygienic products while the Pharmaceutical
segment's are in the allergy, antibacterial, antifungal,
contraceptive, dermatology, gastrointestinal, and pain management
fields. The Professional segment's products are used by doctors,
nurses, therapists, hospitals, diagnostic laboratories & clinics.

Lots of news and product developments for J&J but we like this
play strictly as a market hedge in the area of conglomerates and
safety stocks. The long-term technical outlook is very favorable
and the option prices are fair with excellent (monthly) open
interest. This issue provides an excellent low risk candidate for
even the most conservative investor.

PLAY (conservative/long-term):

BUY  CALL JAN-2001-100 ZJN-AT OI=685 A=$14.12
SELL CALL AUG-1999-100 JNJ-HT OI=267 B=$1.75
INITIAL NET DEBIT TARGET=$12.00 TARGET ROI=120% (18 months)

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



*******************
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*******************
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would welcome you as a permanent subscriber.

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We would like to have you as a subscriber. You may 
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SEE DISCLAIMER IN SECTION ONE
*****************************


The Option Investor Newsletter         Thursday  7-8-99
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

****************
Play of the Day
****************

QCOM - Qualcomm Inc. $142.25 +2.81 (-2.00 this week)

Sunday's Write up

Qualcomm is the inventor of CDMA technology, the new industry 
standard for mobile communications used in cellular phones, 
wireless telephone system equipment, and satellite ground 
stations.  Its OmniTRACS global positioning system is used by 
the trucking industry to monitor traveling truckers.  In a 
joint venture with several companies, including Loral, 
QUALCOMM is developing the Globalstar system of low-orbiting 
satellites, which will offer telecommunications services 
around the world (and should smoke Iridium like a pork chop, 
we might add).  QUALCOMM also publishes the popular Eudora 
e-mail software.

Fortunately, profit taking last week turned out to be pretty 
mild.  The price just keeps marching, with all technical 
indicators in positive territory. QCOM had only 1 down day 
last week (Thursday) and sprang back on Friday to close at 
yet another new high of $144.25.  Near-term support is at 
$141, where it bounced Thursday and again Friday morning.  
If volume can stay up, so can the price.  Resistance is at 
$147, its highest intra- day high. Earnings are tentatively 
scheduled for July 21.  How about the possibility of another 
split then too? Perhaps, but no guarantee. QCOM last announced 
a 2:1 split on April 14, when it traded at $157.  Trading gods 
willing, QCOM could be there again by earnings and announce 
another 2:1 split. There are 300 mln. shares authorized.  
There are 150.646 mln. shares issued - slightly too many to 
pull off a split without a shareholder vote.  No special proxy 
has been issued yet.  We'll keep an eye out.  QCOM may exhibit 
a bit of weakness in conjunction with any market weakness. 
Let this be a buying opportunity, but exercise caution since 
QCOM's volatility makes it a bit riskier play.  Confirm market 
direction before jumping in.

No news since last Thursday.  Just a reminder from the previous 
week, Deutsche Banc Alex Brown analyst Brian Modoff anticipates 
QCOM's CDMA royalties alone will garner about $1.50 a share 
in 1999. That works out to roughly $112.50 per share at a 
multiple of 75 time earnings.  This looks good to analysts.

Tuesday's Write up

Nothing in the news to report today - just good old-fashioned 
profit taking on slightly higher than average volume.  QCOM 
held pretty well at $149 until the last hour and a half of 
trading, then the bottom fell out, causing QCOM to fall $7 to 
$142. Its trading range today was from $141.50 to $150.25.  
A small spurt of buying at the closing bell propped it off 
its low - a bit too late to confirm $141 support.  Tomorrow 
may be a down day on a market wide basis, and QCOM will likely 
follow suit.  If not, consider today's bounce off $141 a 
gift/buying opportunity.  Earnings are July 20, 1999 at approx. 
1:30 p.m. (company confirmed).  Also, since they announced 
their last split at $157, we may get another 2:1 split 
announcement at that time, though shareholders will need to
vote on the issue (anyone object?).  Just a reminder 
VOLATILITY = HIGH RISK! Confirm market direction first.

Thursday's Write up

Yes, dreams can come true, as long as you analyze the market 
correctly.  Last night we noted in the Market Wrap that QCOM 
was buyable on yesterday's dip.  We cited CNBC early morning 
comments (missed by most other news services) that QCOM had 
gained 600 K new customers in Korea during the month of May 
and they are expected to announce a major equipment sale to 
Sprint in the next 2 weeks.  Not only that, but Lehman Bros. 
was "pounding the table" on QCOM while they raised earnings 
estimates by another $0.02.  Today's $2.81 gain is nice to 
see, but QCOM investors may have hit the mother lode in after 
hours trading, as QCOM traded up $9 at $151.  The news release 
states that QCOM will be replacing TransAmerica on the S&P 
500.  As one exuberant message poster wrote, "!#$% &*#@, I 
AM ROLLING IN MONEY!!!!!!!!".  Earnings are July 20, 1999 at 
approx. 1:30 p.m. (company confirmed).  Remember too that 
since they announced their last split at $157, we may get 
another 2:1 split announcement at that time, though shareholders 
will need to vote on the issue (anyone object?).  We can 
pretty much confirm the direction of this stock tomorrow.  
Just don't buy with a market order at the open and wait for 
any mid-day weakness.  Try not to chase the stock price.

Comments

We are making QCOM the play of the day due to the announcement 
of their addition to the S&P 500.  This will make for an
exciting and volatile day tomorrow.  Keep in mind that 
the prices listed below will have changed dramatically 
and there is bound to be many more strikes created as 
it is hitting new highs after-hours. We are looking for
QCOM to climb for the next few days on this news. Remember 
to buy the dips and enjoy the ride!  
 
BUY CALL JUL-140 AAW-GH OI=1684 at $ 7.50 SL= 5.75  
BUY CALL JUL-145 AAW-GI OI=1645 at $ 4.75 SL= 3.00 
BUY CALL JUL-150*AAW-GJ OI=3081 at $ 3.00 SL= 1.50
BUY CALL AUG-145 AAW-HI OI= 702 at $13.75 SL=11.00
BUY CALL AUG-150 AAW-HJ OI=1015 at $12.00 SL= 9.50 

Picked on June 22 at $130.63       PE = 384 
Change since picked   +11.63       52 week low =$ 18.88 
Analysts Ratings   7-7-3-0-0       52 week high=$150.25 
Last earnings 04/99 est 0.49       actual 0.21 surprise = 41.38% 
Next earnings 07-21 est 0.55       versus 0.17 
Average daily volume = 3.58 mln. 
Chart = http://quote.yahoo.com/q?s=QCOM&=3m





*****************************************************
FREE TRIAL READERS
*****************************************************
If you like the results you have been receiving we 
would welcome you as a permanent subscriber.

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price is 99.95 which is $10 off the monthly rate.


We would like to have you as a subscriber. You may 
subscribe at any time but your subscription will not 
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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.



DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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