Option Investor
Newsletter

Daily Newsletter, Tuesday, 03/21/2000

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The Option Investor Newsletter         Tuesday  3-21-2000
Copyright 2000, All rights reserved. 
Redistribution in any form strictly prohibited.

Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
       3-21-2000           High     Low     Volume Advance Decline
DOW    10907.30 + 227.10 10907.30 10603.60 1,058,476k 1,791  1,154
Nasdaq 4,711.68 + 101.68  4630.23  4467.53 1,725,082k 1,760  2,508
S&P-100  791.14 -   1.44   794.17   780.07    Totals  3,551  3,662
S&P-500 1465.46 -   7.84  1472.13  1446.06            49.2%  50.8%
$RUT     540.55 -   8.65   549.20   530.87
$TRAN   2641.70 +  42.11  2650.00  2584.93
VIX       24.73 +   0.56    26.00    23.85
Put/Call Ratio       .43
*************************************************************

Barrons burgers anyone? 

Are we having fun yet? You all know the story by now. The bull
rally from last Thursday was turned into barbecue by the now
infamous "Burning Cash" article in Barrons over the weekend,
After applying flawed logic to old data Barrons had concluded
that 211 Internet startup companies would run out of cash 
sometime this year and leave stockholders holding the bag.
The promising beginning to a Nasdaq rally that started on 
Thursday afternoon was squashed on Monday morning as traders
ran for the exits. After many companies, including many brokers,
came out an strongly disagreed with the article and the logic, 
bargain hunters slowly started to ease back into the Nasdaq today.

With the Dow not bothering to even slow after last week's huge
bounce investors in the old economy issues are having a picnic.
Up +1120 points from last Wednesday's low there is rampant
euphoria that the correction is finally over. Even the Fed
raising rates by +.25% today had no impact and only a minimal
blip in prices. The rate hike was widely expected and the 
rate hike language was the same as February. Analysts had
expected a more bearish statement and the "same inflation risks 
as seen in February" statement was thought to be tame. After
a momentary pause the markets put on their party hats and
broke out the champagne. 


 


  


The NASDAQ dropped -143 at the open and stopped just above 4450 
support and again crawled back from the brink of disaster. Turning 
in an impressive range from -143 to +101, which qualified as the
third widest range ever, the NASDAQ looked much stronger at the
close. The big cap favorites appeared to shake off the profit 
taking and some added impressive gains. YHOO +20, CSCO +7, CMGI 
+10, EBAY +18, CHKP +25, JNPR +24, AMCC +20, EMLX +19, BRCM +15. 
Did you ever notice there is never a +1, +2 day? These stocks are 
almost always moving in double digits and appear to go from 
oversold to overbought on a daily basis. With the DOW very
extended from the recent rally it is possible we could see some
money moving back into tech stocks soon.

Market bull Abby Joseph Cohen was forced to raise her "year end"
estimates for the S&P to 1575. Since that is only 81 points from
where we closed today this is a double edged sword. While the 
bullish sentiment is welcomed the implications are immense. Since
we could hit that number next week this means she either expects
the market to go into a coma and flat line for the next nine months
or she really expects another correction and she is trying to warn
us without actually saying the words. The S&P closed at a new record
today of 1493. 

Earnings warning season is in full bloom but not like you would
expect. GE pre-warned today that they would beat estimates and
the stock soared over +$9. GE contributed almost +25% of the DOW's
+227 gain, or +60 points. 

In the "should have warned" column falls MU. Announcing results
after the bell Micron fell way short of the $.74 estimate with
only a +$.58 actual. The conference call was even worse. They
cited a drop in chip sales of -20% and a drop in Q2 PC sales of
-17%. Margins were down to 37% from 51%. The bad news for us was
the claim of falling PC sales and drop in chip prices. The news
will not be taken well by the rest of the chip/PC sector. Micron
is down -$12 in after hours trading.

Warner Lambert is going to need a prescription in the morning.
After the close today they announced they were pulling their
Diabetes drug Rezulin from the market at the request of the
FDA after the drug had been linked to liver failure. WLA had
been counting on big revenues from this product and the 
morning sickness on Wednesday is likely to be severe.

Now that the Fed meeting is out of the way the economic calendar
is rather slim. The focus should turn to earnings only three
weeks away. The Fed did moderate fears of a bigger than +.25%
rate hike in the future since this was the meeting most feared.
The farther we get into the Fed rate hike cycle the less we
have to fear about larger than normal increases. Alan Greenspan
uses the example of the economy being a huge tanker and the rate
increase a minute change in the rudder. Even a small change in
the rudder will eventually change the course of the ship but the
length and weight makes the change almost invisible for sometime.
Each rate increase takes 6-9 months to be seen in the economy 
and the increase today was the fifth one in the current string
which began last June. Analysts now expect at least two more
rate increases in May and June. The May Fed Fund futures are
indicating a 100% chance of another +.25% rate hike in May.
Bond yields are now 5.96% and moved in agreement with today's
expected rate increase. This is the first time in six months 
that the yield has been under 6%. The bond yields have not been 
below the fed funds rate since the Russian debt problem in 1998.

The NASDAQ struggled back to end with a nice gain but still
less than Monday's third largest point drop ever. I will not
look this gift horse in the mouth but with the DOW so extended
as to be in imminent danger of profit taking the NASDAQ may 
have a tough time making back to back big gains. This tag team
has the divergent market dance down to a science recently and
a positive NASDAQ could mean a negative DOW. Nothing goes up
or down in a straight line and the DOW has been vertical for 
five days. I am positive on the NASDAQ on Wednesday as long
as the Micron earnings does not trip up the PC sector. Possibly
this will be seen as a company specific shortfall and the 
rest of the group will continue on. Still I am not holding my
breath. Protect your positions and wait until after amateur
hour before opening any new ones.

Trade smart and sell too soon.

Jim Brown
Editor

Disclosure notice: 

Current long positions include; 

YHOO, MSTR 



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

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free. The cost of the two day seminar is about what you would
lose in only one trade. Invest it, don't lose it.

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For complete details http://www.OptionInvestor.com/seminar/

There is a 100% money back guarantee and you can take a friend
for free. What else could you ask for?



**********
STOCK NEWS
**********

The Perils of Momentum Investing
By  S.P. Brown

Yesterday, it was MicroStrategy's (MSTR) turn to be taken to 
the woodshed, today, it was Protein Design Labs' (PDLI) turn.

PDL, which develops human antibodies to prevent and treat 
certain diseases, fell 47 percent to $72 a share in early 
morning trading before recovering to $96 a share to close the 
day off 29 percent.  

Today's sell-off was disastrous enough for PDL's shareholders. 
Unfortunately, it was preceded by a $45 a share dip on Monday.  
Over the past two day's, PDL shareholders have seen the value 
of their holdings cut in half.  

To get an idea of just how fast and furious the sell-off has 
been.  At its all time high of $338 a share set only two short 
weeks ago, PDL had a $6.3 billion market cap.  Today, that 
market cap has shrunk to $1.8 billion.  

The impetus for PDL's merciless pummeling came yesterday when  
the company announced that the European Patent Office had 
revoked its European humanization patents related to antibodies 
for fighting autoimmune and inflammatory diseases. 

Following the decision, PDL announced it would appeal the 
European Patent Office decision.  However, the appeals process 
could take several years to resolve.

There was one positive note that came out of Europe, though, 
the Patent Office did uphold PDL's claims to protect its kidney 
rejection drug Zenapax, which is licensed to Hoffman-La Roche. 

In hindsight, PDL investors should have been wondering long 
before this week if all was kosher with the company.  In 
February, PDL halted the pricing of its planned $100 million 
private debt offering to give it more time to complete quality-
control testing of a new lot of an antibody required to 
continue one of its clinical trials. 

What's more, the company doesn't exactly resemble a typical 
momentum play.  PDL isn't some new fast-growing IPO issue.  
The company has been around for over a decade, and it hasn't 
exactly been a fast-mover.  Over the past five years, revenues 
have been growing at a 15 percent annual rate - respectable, 
but not outstanding.  During that time, the company posted an 
annual loss for each of those years. 

For the most recent fiscal year ended December 31, revenues 
totaled $35.8 million, compared with $30.8 million during 1998. 
PDL's net loss for the year was $10.3 million ($0.55 per basic 
and diluted share), compared with a net loss of $9.5 million 
($0.51 per basic and diluted share) during 1998.

But as we are all well-aware, last month the biotechs were 
white-hot.  The AMEX Biotechnology Index (BTK) was up 64 
percent in February, lead in no small part by PDL, which was 
up a stunning 233 percent.  

There is little doubt many investors were acting first and 
asking questions second, lest they miss out on the next big 
momentum push.  

But that's not to say momentum investing can't work, if applied 
with a little forethought and sagacity.  With the massive 52-
week run-up in the Nasdaq Composite Index (COMPX), and many of 
the technology indices, momentum investing has indeed proven to 
be a wealth-enhancing strategy.  

However, like PDL and MicroStrategy have both demonstrated, 
momentum investing in only one security can prove to be a 
poverty-enhancing strategy.  


**************
Market Posture
**************

As of Market Close - Tuesday, March 21, 2000 

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

DOW Industrials   10,850  11,250  10,907    Neutral   3.16
SPX S&P 500        1,410   1,475   1,494    BULLISH   3.21  **
OEX S&P 100          780     800     807    BULLISH   3.21  **
RUT Russell 2000     510     530     553    BULLISH   2.24
NDX NASD 100       4,000   4,150   4,449    BULLISH   2.24
MSH High Tech        975   1,000   1,113    BULLISH   2.24

XCI Hardware       1,480   1,510   1,684    BULLISH   2.24
CWX Software       1,430   1,670   1,525    Neutral   3.21  **
SOX Semiconductor  1,130   1,360   1,194    Neutral   3.21  **
NWX Networking     1,000   1,040   1,128    BULLISH   2.24
INX Internet         770     800     862    BULLISH   3.09

BIX Banking          520     600     558    Neutral   3.16
XBD Brokerage        450     480     521    BULLISH   2.31
IUX Insurance        500     560     537    Neutral   3.16

RLX Retail           900   1,000     936    Neutral   3.16
DRG Drug             340     380     353    Neutral   3.16
HCX Healthcare       700     750     709    Neutral   3.16
XAL Airline          110     140     138    Neutral   3.10
OIX Oil & Gas        265     300     282    Neutral   3.16

Posture Alert    
Positive remarks from General Electric about their current quarter 
helped spark a rally today, as investors shrugged off the expected 
interest rate hike and bought everything across the board. Leading 
sectors included Internet (+5.67%), Banking (+4.69%), the NDX 
(+4.42%), Airlines (+3.61%), and Insurance (+3.53%). With this 
most recent action, we have upped the S&P 500 and S&P 100 to 
Bullish from Neutral. However, on the downside, we have lowered 
Software and Semiconductors to Neutral from Bullish.



****************
Market Sentiment 
****************

Tuesday, March 21, 2000

They Bring Good Things to Light!

General Electric helped lead the Dow to a strong close today, as 
the blue-chip bellwether stated that they will "modestly exceed" 
analyst expectations. This nice surprise helped spark the broad 
market as well as GE's stock price by almost ten points. With 
corporate earnings just around the corner, it was refreshing to 
get some confirmation from a bellwether like GE, that their 
quarter was on track. However, we are still in the middle of 
pre-release season, so caution should be had.

A prime example of a high expectation stock, which also was a big 
momentum play, was MicroStrategy (MSTR). This high-flyer came to 
light several weeks ago, as Forbes made some negative remarks in 
their monthly publication regarding MSTR and their revenue 
recognition. Obviously, no one paid any attention nor did anybody 
do any due diligence regarding this issue, as the stock tanked 
yesterday and is now down $250 points in a matter of weeks! Now we 
have never traded this issue (even though we wish we shorted it!), 
however, when we saw the stock drop $140.00 dollars in one day, we 
were intrigued to see the Pinnacle Index and what the speculators 
felt regarding this issue. Our immediate feelings were confirmed, 
as the out-of-the-money call options outnumbered the OTM puts by a 
13-to-1 margin. This was incredibly optimistic, and the Pinnacle 
Index was off the charts, suggesting a potential sell-off.
Unfortunately, we never looked at this issue until it became the 
triple-digit loser of the day. However, as traders, you can start 
reviewing the stocks/options in your account now, and gather the 
important information for the upcoming earnings run. Check out the 
earnings expectations and dates, and then take a look and see what 
the sentiment seems to be indicating. If it looks anything like 
MicroStrategy, then you may want to run for the hills, or play the 
other way. And for those of you who enjoy other people's misery, the 
CEO of MSTR, has lost $10 BILLION on paper over the last couple of 
weeks. And how is your week? 


Finally, the Pinnacle Index for the OEX is currently indicating an 
overbought market, which overhead increasing with every point. 
Based on the current figures, we would not be surprised to see 
profit taking in the near term.  


 


BULLISH Signs: 

Corporate Earnings:
Major corporate earnings continue to come out strong and ahead of 
analyst expectations. General Electric is the latest bellwether to 
give positive comments regarding earnings.

Cash Flow:
The cash that has been sitting on the sidelines has been put to 
use as of late, as record volumes for the major indexes have been 
shattered. With the NASDAQ surpassing volume of 2 billion shares 
again, this money is obviously flowing into technology.

Short Interest:
Short interest continues to climb as quickly as the market. The 
short interest on the NASDAQ increased another +8.51%, for a 5th 
consecutive record.

Interest Rates (6.148):
The current yield is now safely off of 52-week highs and is 
temporarily out of the danger zone.


Mixed Signs: None

BEARISH Signs:

Pre-Release Season: 
With April just around the corner, we have the beginning of 
pre-release season. Over the next several weeks, companies will 
let Wall Street know that their profit/sales goals are not being 
met, and their stocks will get brutally punished. The first major 
corporation to do just this is Proctor & Gamble, with it's 27 
point decline, followed by MicroStrategy and it's 140-point 
decline!


Volatility Index (23.34):
The VIX continues to prove that the low 30's are an excellent 
buying opportunity, and the low 20's continue to be a great selling 
opportunity. At current levels, the VIX is within one good day of 
being in overbought territory.


Energy Prices:
With the rapid rise in crude oil, everything from manufacturing to 
transportation will be affected by higher costs. These higher costs 
will be felt 1-2 quarters out, and could put pressure on profit 
margins. 

Investor Expectations:
More and more investors are now expecting high double-digit growth 
if not triple-digit expansion in their portfolios. This extreme 
positive sentiment could help fuel a future selloff in technology 
shares.


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 
Benchmark                        (3/17)      (3/21)

Overhead Resistance (830-860)    21.25       25.67
Overhead Resistance (800-825)     6.36        8.34

OEX Close                       786.74      806.87

Underlying Support  (770-795)     0.88        0.92
Underlying Support  (740-765)     1.31        1.33

What the Pinnacle Index is telling us:
Based on the current sentiment, overhead is heavy and building. 
This may indicate that the OEX will stall at current levels and 
pull back.


Put/Call Ratio                  Friday     Tues 
Strike/Contracts                (3/17)    (3/21)

CBOE Total P/C Ratio             .41       .43
CBOE Equity P/C Ratio            .35       .36
OEX P/C Ratio                   1.11      1.56


Peak Open Interest (OEX)
                     Friday           Tues  
Strike/Contracts     (3/17)           (3/21)

Puts               720 / 7,621     720 / 9,271
Calls              750 / 3,890     880 / 4,217
Put/Call Ratio         1.98           2.20


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 16, 1999       Top                 18.13 
August  5, 1999     Bottom              32.12 
October 15, 1999    Bottom              32.06
January 28, 2000    Bottom              29.09

March 21, 2000                          23.34



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

Daily Results

Index     Last     Mon    Tue    Week
Dow    10907.34   85.01 227.10  312.11
Nasdaq  4711.68 -188.13 101.68  -86.45
$OEX     806.87   -1.44  21.57   20.13
$SPX    1493.87   -7.84  37.24   29.40
$RUT     552.79  -25.57   3.59  -21.98
$TRAN   2667.81  -24.24  68.22   43.98
$VIX      23.34    0.50  -0.83   -0.33

Calls               Mon    Tue    Week

YHOO     191.75    0.91  19.72   20.63  Everybody yell "Yahoo!"
NOK      211.00    2.13   9.50   11.63  Wow! Nice recovery!
INTC     138.44    5.13   3.44    8.57  Set on uncharted territory
CSCO     140.84   -0.88   6.72    5.84  Dropped, exit due to split
EXDS     155.25   -8.75  12.75    4.00  Could retest old highs
XRX       28.19    0.19   3.75    3.94  New, things are lookin' up
IBM      113.50    2.75   0.75    3.50  New, Ol' Beam on a run
HWP      141.88    5.19  -2.13    3.07  Support @ $140
AOL       67.50    2.13   0.50    2.63  5% gain in 2 days-not bad!
DELL      58.00    1.25   0.31    1.56  May challenge $60 soon
BMCS      54.56   -3.56   3.06   -0.50  Resistance @ $55, then $56
SCH       54.44   -1.25   0.44   -0.81  New, Chuck is breaking out
NITE      49.00   -3.25   0.50   -2.75  In the center of a channel
IDPH     115.59  -12.44   9.09   -3.35  Biotech regaining ground
SEG       65.19   -2.75  -0.81   -3.56  Moves with VRTS
RATL      83.00   -1.63  -3.88   -5.51  Pullback: chance to enter
BGEN      78.13   -5.63  -1.13   -6.76  Support held up well
BWEB      40.75   -5.75  -2.75   -8.50  Dropped, time to move on
CHKP     223.50  -37.19  25.19  -12.00  Volatility anyone???
TIBX     106.00    0.97 -14.59  -13.62  Dropped, early earnings!?!
MRVC     118.13  -18.50   3.75  -14.75  Look for quick plays here
SCMR     127.25  -13.50  -3.75  -17.25  Pure momentum play
VERT     197.00  -37.63  14.00  -23.63  Splits 2:1 on 03/31...run!!!
VIGN     197.94  -36.31  -2.00  -38.31  Dropped, Okay, that's it!

Puts

ISLD      70.25  -12.56   0.19  -12.37  Just like a perfect put
TERN     176.97  -16.25   4.66  -11.59  Dropped, too much momentum
RHAT      57.19   -3.63  -2.06   -5.69  New, end for Linux mania?
CKFR      66.00   -5.44   1.25   -4.19  So far so good
EK        57.75    0.31   0.00    0.31  Waiting for pre-announce?



**************
TRADERS CORNER
**************

There is no Traders Corner article tonight.


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:
*****

TIBX $106.00 -14.59 (-32.19) Wait a minute.  Wasn't TIBX supposed 
to report earnings this Thursday after the bell?  The answer was 
yes, but they changed their mind and blindsided investors with an 
early release last night.  While they reported a fiscal Q1 net of 
$0.01 per share, two cents better than the First Call mean, vs. 
year-ago loss of $0.04, they refused the conference call last 
night and scheduled it for Thursday after the close as originally 
planned.  TIBX was punished today anyway in a typical post 
earnings selloff...another unfortunate example of why we never 
recommend holding over earnings.  Early releases are rarities, 
but they happen (see GE today).  Note this posted to the company 
Web site: "TIBCO Software Inc. is currently in the process of 
completing a secondary offering.  Therefore, we are accelerating 
the release of our quarterly results to provide this information 
in advance of the offering, which is scheduled to price after the 
close of market on Tuesday, Mar 21st.  TIBCO Software will be 
reporting its first quarter fiscal year results on Monday, March 
20, 2000 after market close."  Thanks for the warning.  Though 
there is still a possibility of a stock split announcement during 
the conference call tomorrow with a shareholder meeting on April 
12th (which includes an agenda item to increase the authorized 
shares from 300 mln to 1.2 bln), we're dropping TIBX tonight on 
principle. 

VIGN $197.94 -2.00 (-38.31) All right, that's it for VIGN.
Every time it looks like it has found support, something else
scares investors, and support gets violated.  The latest scare
appears to be the violent abuse visited on MSTR yesterday, which
caused negative sentiment to spread throughout the Internets.
VIGN responded by plunging through support at $230 and then $200.
Although VIGN looks like it may have found support today near
$190, there doesn't appear to be much conviction to push it
higher.  If VIGN can put its house in order and start moving
higher, we may consider adding it back to the play list for a 
run into its split on April 14th.

BWEB $40.75 -2.75 (-8.50) Just like we said this weekend, BWEB
would probably take its cue from the Nasdaq this week.  And take
its cue, it did.  BWEB made a futile attempt to move higher at 
the open on Monday which lasted about 15 minutes.  BWEB followed
the Nasdaq lower to hit $43.25.  To add insult to injury BWEB was
the brunt of more selling again today as the software company 
fell to near $38 before buyers stepped in.  Surprisingly the 
volume was light on Monday but picked up today to 875k.  Again 
no news on the company, just scared traders wanting to either 
take profits or unload their stock.  Unfortunately with no 
brakes the trip back down was fast as well.  Although some are 
calling the current levels a good buying opportunity for BWEB, 
we will look elsewhere for now. 

CSCO $140.85 +6.72 (+5.85) Today our patience was rewarded with 
a $6.72 gain.  CSCO finally another made a run on strong volume 
giving us opportunity to catch some profits.  Dire as it may be, 
tomorrow is officially the last day to trade this split play.  
Therefore we're giving fair warning tonight to exit the play.  
CSCO goes ex-div on Thursday and it'd be wise to have all 
positions closed.  Otherwise you're vulnerable to potential 
post-split depression and this is not worth the risk.  


PUTS:
*****

TERN $176.98 +4.67 (-11.58) TERN followed the rest of the tech
sector down on Monday, culminating with a gap down by 9 points
on Tuesday.  The stock bottomed early Tuesday morning at $150.
After floating for much of the afternoon, TERN turned it on in
the last hour of trading to close the opening gap.  The stock
had too much momentum going into the close to hold any put
positions.  We will continue to monitor this story as it 
plays out, but don't want to stand in the way of what could 
be a strong relief rally.



********************
PLAY UPDATES - CALLS
********************

VERT $197.00 +14.00 (-23.63) VERT was whacked yesterday in the 
MSTR malaise.  After a brief continuation this morning, VERT 
bounced north from its low of $168.88 in a spectacular recovery 
on strong volume.  Looking to the moving averages for support?  
Forgeddahboudit.  Instead look to recent historical support 
in mid-February at $196.  At $197, we cleared the hurdle.  
Technically, there is along tail on the candlestick formation 
today, conveying that investors were not content to let VERT 
languish in the $169 area, and bullishly bid it back up to 
current levels before the close.  Volume confirms that.  Why 
might that be?  VERT splits 2:1 on March 31st after the close, 
and we expect the price to move up into that date.  

NOK $211.00 +9.00 (+11.13) Wow!  Nice Recovery!  Technically, NOK 
now trades back over its 5, 10, 30, and 50-dma.  Support looks 
good at $200 and $205.  The next level of resistance is at $215, 
then $220.  We think it can surpass these levels in the next two 
weeks as it nears its 4:1 stock split.  While there is no firm 
date, here is the sequence: March 22nd (tomorrow) there is 
shareholder meeting to authorize new shares in order for the 
split to take effect.  We think that will handily pass.  At the 
same time, management should also announce the actual split date, 
which we currently estimate to be the first or second week in 
April.  We will let you know in Thursday's write-up.  Want to 
know of the future of the business holds?  Today, NOK and MOT 
announced in a BusinessWire article that they would team to begin 
the standardization process for 1XTREME technology, which will 
offer operators a cost-effective migration path to provide 
integrated voice and data speeds up to 5.2 Mbps on a single 1.25 
MHz code division multiple access (CDMA) carrier.  (Qualcomm gets 
paid again!) The 1XTREME proposal enables real time voice, data 
and multimedia services on existing cdma2000 networks allowing 
end users to browse the Internet from a personal computer or 
access email while "on the go".  The Nokia and Motorola 1XTREME 
proposal consolidates the companies' individual efforts, 
including Motorola's 1X Plus, presented at a telecommunications 
industry trade show in New Orleans on Feb 29th

NITE $49.00 +0.50 (-2.75) No news articles that would move the 
price this week.  However, in yesterday's downdraft, NITE found 
support at $47, then again today at $46 before recovering to its 
current level.  Within the parameters of an ascending channel 
between $42 and $54, NITE currently sits on the centerline and 
looks poised to continue its gain to the $54-$55 level.  Today's 
test of $46 and subsequent recovery on the candlestick chart 
(long tail) speaks a bullish statement for tomorrow.  It's all 
the more impressive because the recovery allowed NITE to close 
back over its 5-dma of $48.80 and 10-dma of $48.40.  An earnings 
run may be a bit premature since the anticipated, but unconfirmed 
date is slated for Apr 19th.  In the meantime, you may want to 
consider trading the predicable channel and prepare to exit with 
trailing stop losses.  Otherwise, wait for the breakout with 
volume over $55.  In the news, while it is not a big deal in the 
grand scheme of things, some founding insiders have registered to 
sell 500 K shares - a drop in the bucket compared to the 111 mln 
shares outstanding.

SEG $65.19 -0.81 (-3.56) Even the old tech names weren't immune
to Monday's debacle.  After a sharp decline early Tuesday, SEG
found support at $61.  The stock formed a nice double-bottom
at that level and regained momentum to close right at the 
5-dma.  Any dip below the 5-dma will provide a good entry point.
Use a stop at the $61 - $62 range to protect any positions 
should SEG breakdown.  Earnings are still a few weeks away, we 
look for SEG to pick up momentum as we approach their Apr 13th 
earnings date.  Much of the downdraft on Monday can be pegged 
to the big dip in Veritas, of which SEG owns a ton.  VRTS was 
on the road to recovery today though and will help to propel 
SEG if it continues.

EXDS $155.25 +12.75 (+4.00) The built-up demand we mentioned in 
Sunday's write-up came to light Tuesday as shares of EXDS closed 
sharply higher on healthy volume.  Over the last two days, EXDS 
charted an inverse head-and-shoulders, with a bottom at $135 and
shoulders at $140.  After hitting the second shoulder at $140,
EXDS didn't look back.  The stock benefited from positive 
comments by Robertson Stephens analyst Rick Juarez.  "We believe
Exodus is in an ideal position to dominate the market for 
integrated access, hosting, and applications services," said 
Juarez.  He also set a new 12 month price target of $245 on a 
pre-split basis.  Previous resistance at $150 now provides support 
for EXDS.  Confirm direction before entering any new positions. 
Major resistance now sits at $165, after that point, EXDS could 
retest old highs at $175.

MRVC $118.13 +3.75 (-14.75) Wow, what a roller coaster ride MRVC
took in the last two days.  The infamous Barron's article took 
MRVC down with the rest of the tech on Monday.  The stock gapped
down over 3 points Tuesday, to fall all the way to $99.  Traders
decided that was far enough as MRVC quickly regained ground 
and finished the last hour of trading with an 8 point burst.  
Resistance is just above at $120 with support now established
at $115.  The wide swings are providing plenty of entry points,
with that volatility comes a lot of risk.  Look for quick plays 
to minimize risk.  Once momentum regains, the stock can really
take off.  Look for a breakout above $120 and upward momentum
before entering new plays.

HWP $141.88 -2.13 (+3.88) After moving higher last week on ideas
of the company being undervalued, HWP is just treading water
this week.  Moving up to challenge resistance at $146-147 by
mid-day on Monday, the computer maker just couldn't hold its
gains and came back today to test support at $140.  Volume,
holding right near the ADV, is making it hard to divine the
future.  Although it was encouraging today to see support hold,
the strength in the broader markets should have had a stronger
effect.  HWP has had a slew of positive press releases this
week, many of which refer to its network products and alliances.
While this normally will boost a company's share price, HWP is
just holding its own.  In the good news column, yesterday HWP
and Xerox announced that they have settled all their outstanding
patent infringement lawsuits, opting to spend the time and money
serving their customers and competing in the marketplace, rather
than in the courts.  Sitting right on top of its 10-dma
($141.50), HWP needs to prove itself by moving higher from here.
If buyers step up, look to enter new positions on a bounce from
the $140 support level.  A more conservative approach would be
to wait for shares to trade through the $147 level on increasing
volume.  Now that the FED has gotten the rate hike out of the
way, investors should begin focusing on the strength of the
company.  Remember that above $140, HWP becomes a split
candidate.  That would be a nice bonus to our play, if the 
stock can get moving again.

AOL $67.63 +0.75 (+3.25) A 5.0% gain in two days, not a bad 
start to one of our newest plays.  Although most of the business
was done on Monday, AOL did manage to pick up another +0.75 
today.  While we are certainly pleased with such a nice start 
to our play, AOL did seem to be slowing down a bit heading into
the close.  This is not to be construed as a negative, but if we
do get a bit of a pullback it may offer those who couldn't make
their mind a better entry point.  AOL is well above several of
its moving averages, with the exception of the 100-dma which 
now sits at $68.99.  AOL may regroup a bit before moving through
that level with conviction.  On Monday AOL and PurchasePro.com
announced a 3-year e-commerce deal for businesses.  The two will
create a B2B market place that will let businesses buy and sell
their products, as well as negotiate price.  Today AOL formed
support at $66, with the next level seen at $64.  If you are
still considering a play a bounce off either level would provide
a good entry point.  A move through $69 accompanied by strong
volume could signal AOL is off to the races.

CHKP $223.50 +25.19 (-12.00) Volatility anyone?  Down $37.19
one day, up $25.19 the next.  CHKP is certainly not for the faint
of heart.  On Monday several leading ISP's joined CHKP to improve
and strengthen their defenses against cyber attacks.  Many ISP's
are beginning to find Internet security is not an option, its a
necessity, which continues to make CHKP and others a hot item
in the tech sector.  The decline on Monday, appeared to be a
sympathy move with the Nasdaq, rather than any problems as the
news was certainly positive.  While a few weeks ago CHKP and 
others seemed to be able to continue to climb the ladder higher,
regardless of the strength or weakness in the broader market, 
things may have changed.  Once the Nasdaq hit correction mode,
sentiment has changed somewhat, and investors are a little more
picky as to what they buy into.  CHKP bounced one more time off
a low at $198 and closed higher on solid volume of 2.3 million
shares.  What's ahead?  The next levels of resistance show up 
at $234 and $248, with support at $210 and $205, although as 
we said it appears for now CHKP's immediate future may be tied 
more to the sentiment in the Nasdaq.

BGEN $78.13 -1.13 (-6.75) Were those orders and fills we saw
being passed around the trading floor or notes saying "Punish
the Biotech's"?  Our potential beauty got a bit of a black eye 
after being roughed up the past two sessions.  On the bright 
side the lower end of the support area did hold up fairly well, 
although BGEN did see a good bit of selling the first two days 
of the week.  Over 14.2 million shares have changed hands and 
lets hope those that bought today are willing to hang with BGEN 
longer than those that recently bought shares of the stock.  We 
use the word hope as BGEN did close just below its 200-dma at 
$78.76.  Actually BGEN may be providing those with patience a 
great buying opportunity at these levels.  Intraday charts show 
the $76 area having provided good support.  As we've said in 
past updates, the institutions and funds have been buying BGEN 
on the recent retracement and it is highly unlikely there
opinion has changed in the past two days.  The Biotech sector
was down over 10% early in the day, but buyers did step in
bringing BGEN and others back late in the session.     


***********************************************
PLAY UPDATES - CALLS - CONTINUED IN SECTION TWO
***********************************************


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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
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The Option Investor Newsletter         Tuesday    3-21-2000
Copyright 2000, All rights reserved. 
Redistribution in any form strictly prohibited.


********************************
PLAY UPDATES - CALLS - CONTINUED
********************************

RATL $83.00 -3.88 (-5.50) The headlines today read "Rational 
India Unit's Sales To Double".  Sometimes no matter how good
the news, you just can't fight the sentiment in the markets.
Actually the pullback in RATL is giving us the chance to buy
calls at a better price than last week, and frankly we view
that as a plus.  With RATL bouncing of the $80 area twice 
today we believe RATL may be preparing to get back on track.
The volume the past two days has been higher than average,
and at this point it really appears as though the traders that
had stepped last week and bought shares of RATL, may have got 
nervous with the Nasdaq heading back into correction mode
early today.  RATL did hit $77.75, but quickly bounced back over
the $80 mark even with the Nasdaq trying to figure out which
direction it wanted to go.  RATL now has intraday resistance
at $86 and support at $80.  Although target shooting at current
levels would be acceptable, conservative traders may prefer
to see $86 penetrated with solid volume prior to placing an
order.

INTC $138.44 +3.44 (+8.56) Intel went for new all-time highs
yesterday with great vigor.  It opened just where it had closed 
on Friday and the bidders stepped in, trying to get their hands 
on this hot stock.  Other than the fact that things are looking
very good for INTC this quarter, the advance can also be 
attributed to yesterday's debut of two new Pentium III processors, 
an 850mHz and an 866mHz chip.  These chips, although not as fast 
as their 1gHz chip, are designed to enhance the delivery of audio, 
video, animation, and 3D graphics over the Internet.  They will
be available in Dell computers within the next two weeks.  Today
was another positive one for INTC.  Analysts continue to upwardly
revise their estimates, or should in say under-estimates, for 
the company and INTC seems to be on the right track.  Good news 
and great technicals means a fun ride into uncharted territories 
for INTC.

BMCS $54.56 +3.06 (-0.50) Yesterday's mild downdraft provided 
attractive entry points as BMCS found support at $50.88 and 
resistance at $55.94.  It is the $56 level that BMCS has not 
seen since the first trading week of 2000.  Today was a better 
day though.  BMCS opened at the low of the day, $51.38, and 
never looked back.  It closed just off the high of the day which 
was $55, proving to be a short term resistance.  In after hours 
trading, BMCS actually did trade at $55, on volume of 66,500.  
It is still in an uptrend and breaking through $55 is key.  
When it does, this may be a conservative entry point.  Use 
discretion suited to your own risk levels when entering on the 
intraday dips.  Watch for market direction tomorrow and let's 
see if BMCS can break through.  

SCMR $127.50 -3.75 (-17.25) The anticipation of today's Fed 
meeting and most likely profit dragged SCMR down to firmer 
support levels at $125 and $130.  At this point, wait for the 
upward momentum to resurface.  Only the very aggressive will 
use this bottom support for entry points.  On the bright side, 
volume remains robust at nearly twice the ADV.  Remember this 
is a pure momentum play driven by the company's expansion 
efforts and recent analyst backing.  A positive sentiment is 
also a pertinent factor in how SCMR moves, so pay attention to 
the market.

YHOO $191.75 +19.72 (+20.63) Everybody yell "Yahoo!"  and jingle 
the gilded coins!  What a solid run up this afternoon.  And 
guess why?  The Fed meeting is done and over, thank goodness!  
Perhaps the Nasdaq will shake off any remaining jitters and 
surge again.  That'd certainly help YHOO continue to climb 
higher ahead of its earnings.  The report is slated for release 
on April 4th, after the bell.  For those following this play, 
you're going to hear this a few more times - make sure your 
positions are closed prior to the announcement to avoid the 
historical sell-off.  If all goes well, it appears near-term 
support should establish itself around $184.  The next field of 
resistance will be at the $200 mark.  Recall from the initial 
write-up that this level is important.  From a technical 
standpoint YHOO is a split-candidate above $200 and this event 
in itself could generate some of it's own momentum.  There was 
a small news item on Monday indicating Yahoo! was seeking to 
increase the number of outstanding shares to 5 bln, however 
there wasn't any specifics available.  Maybe we could have our 
cake and eat it too.  In other news that positively effected 
the share price, Yahoo! announced it'd be jumping on the B2B 
bandwagon.  They also inked a deal with Palm to bundle its 
services on the hand-held computers.

IDPH $115.59 +9.09 (-3.34) This Biotech is clearly trying to 
regain its lofty position atop the pristine pedestal of not long 
ago.  However, the sharp sell-off this week was rather unnerving 
as it sunk to $89.56 before making a swift ascent back to the 5-
dma ($113.89) this afternoon.  The stock's direct and positive 
response to the Nasdaq's reversal gives us confidence IDPH will 
move forward in the near-term.  For better confirmation, look 
for strong volume to back upward bounces off the current level.  
In the industry, rival Techniclone (TCLN) fell on the 
announcement that changes in its testing schedule would delay 
its non-Hodgkin's lymphoma injectable treatment by six to eight 
months.  This is good news for Idec who plans to file for 
approval of its Zevalin in the 4th quarter.

DELL $58.00 +0.31 (+1.56) Dell's upward trend is intact and 
encouraging.  The strong momentum continues to drive the share 
price into new territory.  For instance Dell set another new 52-
week record high ($59.06) on Monday while many others in the 
hardware sector suffered the wrath of a Barron's article and 
general market jitters.  Encouragement too came from Salomon 
Smith Barney with a Buy reiteration on Monday.  Analyst Richard 
Gardner stated that " based on trends so far, we believe that 
Dell will exceed our EPS estimate and the consensus by $0.01-
$0.02 this quarter".  He also upped the price target to $71 from 
$55.  Near-term support is now higher at $57 and dips to the 5-
dma ($56.18) offer solid entry points into this momentum play.  
Dell was also after-hours, trading up to $59 tonight.  Look 
for a strong opening and possible challenge of $60.



*******************
PLAY UPDATES - PUTS
*******************

EK $57.75 +0.00 (+0.31) It might take an explosion to move EK.  
For the last couple of days they have just been bouncing in 
the $57-58 area, today making no move whatsoever.  We had
mentioned before that we were getting sick of all the bouncing 
around but now its almost boring.  We have also said that this
is a play that requires the player to have patience.  So we 
watch and wait.  Today's unchanged position is a good sign for 
our play when the markets did so well.  Conditions are the same, 
support is $55.88 and anything above $60 will cause us to drop 
this play.  If you looked at the headlines for EK you might 
have thought that ever anticipated earnings warning came, but 
the announcement was actually for Eastman Chemical which is a 
spin off of EK.  So not what we were looking for.  However, EK 
still has time to make a pre-announcement which would be a big 
enough explosion to really get EK moving.

ISLD $70.25 (+0.19)(-12.38) Continuing its slide into negative
territory, ISLD is performing like a perfect put play.  On
Monday, an ideal entry made its appearance as ISLD rolled over
at $80 and was pushed lower all day on increasing selling volume.
Making it tough on the company yesterday, Barron's included it
in its article talking about the high rate at which certain
Internet companies are burning through their available cash.
Closing just a fraction above the low of the day on volume almost
double the ADV, it is having a hard time keeping its head above
water.  Today the issue managed to find support near $70, but
given the gains in the broad market, it doesn't look good for
ISLD investors.  Part of the support found today is likely due
to the company correcting the financial details listed in the
Barron's article.  The 5-dma, still clear up at $81.50, has
provided good resistance during this decline, and today, buyers
could only push prices as high as $73.75.  Look to enter new
positions as ISLD moves up to challenge today's highs and rolls
over.  Continuing weakness could drive shares lower from here
though.  If support at $70 can't hold, go ahead and jump on
board as the slide continues.

CKFR $66.00 +1.25 (-4.19) So far so good.  The negative trend 
continues for CKFR.  Yesterday, CKFR opened just above its close
on St. Patty's Day and that was as high as it would be.  It 
quickly fell out of bed with a hangover and traded as low as
$59.31, on volume of 2.1 mln shares, almost twice the ADV.  This
morning, CKFR got a bounce at $59 and regained some ground with
the market's post-interest rate hike rally.  Tomorrow will be a 
telling session to see if we get follow through on these triple
digit index gains.  These levels for CKFR may represent good 
entry points, as we will be looking for a retest of the $59 
level.  Target shoot for entries based on personal risk levels 
and watch to see if CKFR follows the broader market trend.



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

SCH - Charles Schwab Corp. $54.44 +0.44 (-1.44 this week)

For 25 years, Schwab has worked to demystify investing and
empower individual investors.  Schwab's goal is to provide
the most useful and ethical financial services in the world.
Schwab defined the discount brokerage and created the Mutual
Fund Marketplace.  The company is moving into the full service
market by providing objective help and advice for a nominal
fee.  Schwab serves 6.6 million accounts with over $725 bln
in assets.

Brokers love volatility.  These 2 bln share days on the NASDAQ
spell profits for brokers, especially online brokers.  Nearly
half of Schwab's 6.6 mln customers are online traders.  The
recent volatility and massive trading volumes should bode well
for SCH's Q1 profits.  The stock has benefited from continual
upgrades and a resurgence in the financial sector.  Another 
variable that has been boosting shares of SCH has been recent
talk of consolidation in the financial services sector.  Set a
light last week with rumors circulating that Chase (CMB) would
buy Goldman Sachs (GS).  The chart on SCH is looking great.  
The stock continues to bounce off the 10-dma, making higher-
highs and higher-lows.  Volume has been light on any down days 
as the stock pulls back to the 10-day finding strong support.  
Look for an entry at the 10-day, between the $50-$51 range.  
Look for increasing volume and directional confirmation as SCH 
continues to make new highs.

Last week SCH said customer daily average trades were 355.9
thousand in February 2000, up 78% from a year ago.  Net new
assets brought to SCH by new and current customers in Feb 
totaled $13.9 billion, up 13% from Jan 2000.

BUY CALL APR-50*SCH-DJ OI=4904 at $6.88 SL=4.75
BUY CALL APR-55 SCH-DK OI=2356 at $4.13 SL=2.50
BUY CALL APR-60 SCH-DL OI=2115 at $2.19 SL=0.75
BUY CALL MAY-55 SCH-EK OI=  49 at $5.75 SL=3.75
BUY CALL MAY-60 SCH-EL OI= 354 at $3.88 SL=2.25

Picked on Mar 21st at    $54.44     P/E = 77
Change since picked       +0.00     52-week high=$77.50
Analysts Ratings      6-5-2-0-0     52-week low =$26.94
Last earnings 10/99    est=0.18     actual=0.20
Next earnings 04-17    est=0.24     versus=0.17
Average Daily Volume = 4.41 mln
/charts/charts.asp?symbol=SCH


XRX- Xerox Corp. $28.19 +3.19 (+2.38 this week)

Anybody not know what Xerox does?  Just in case you've arrived 
from Planet Claire, Planet X, or just Mars, they are the largest 
manufacturer and marketer of copying and printing equipment in 
the world, almost as well known by their tag line "The Document 
Company" introduced in 1994.  Since 1980, Xerox and Fuji Xerox 
have won 25 national quality awards in 20 countries, including 
one of the world's prestigious on two occasions: the Malcolm 
Baldrige National Quality Award -- for Xerox Business Services 
in 1997 and for Xerox Business Products and Systems in 1989.

Since March 9th, XRX has been clawing its way out of the basement 
at $21 on what we hope will be a stairway to heaven.  That's 
roughly when XRX announced they would offer low-end inkjet 
printers to compete with HP.  Investors responded nicely given 
that XRX had been looking for a way since October to entice 
investors back into the issue with a good revenue story.  Recall 
that in October, XRX warned it would miss its numbers for that 
quarter.  With a settlement at hand yesterday over its six patent 
disputes with Hewlett Packard, XRX made its biggest 1-day gain 
in at least six months.  Volume today was huge at almost 10 mln 
shares traded - 54% greater than the ADV.  Support now is at the 
5-dma of $26.54.  Intraday, it can be found at $26.50 and $27.50.  
Target shoot at those levels expecting some backing and filling 
from today's move.  Earnings are confirmed for April 25th.

Xerox's success against HP rests on the recent announcement of 
a Xerox, Sharp, and Fuji Xerox link up that has the total 
investment by the consortium exceeding $2 bln to develop, 
manufacture and market those low cost printers.  XRX told 
analysts it hopes to have 10% of the market within four years 
from the 1% share it has now.

BUY CALL APR-25 XRX-DE OI=19375 at $3.88 SL=2.25
BUY CALL APR-30*XRX-DF OI=18823 at $1.25 SL=0.00 High Risk!
BUY CALL MAY-25 XRX-EE OI=   72 at $4.75 SL=2.50
BUY CALL MAY-30 XRX-EF OI=  222 at $2.13 SL=1.00

Picked on Mar 21st at    $28.19     P/E = 13
Change since picked       +0.00     52-week high=$63.94
Analysts Ratings      3-4-9-0-0     52-week low =$19.75
Last earnings 01/00   est=  N/A     actual= 0.41
Next earnings 04-25   est= 0.26     versus= 0.84
Average Daily Volume = 5.94 mln
/charts/charts.asp?symbol=XRX


IBM - Int'l Business Machines $113.50 +0.75 (+3.50 this week)

IBM is the world's leading provider of computer hardware with 
products ranging from PCs and notebooks to mainframes and 
network servers.  "Big Blue" also makes computer software and 
stands only behind the giant, Microsoft (MSFT) in ranking. 
Currently IBM is expanding its technology focus to include 
the vast opportunities of Internet business.

Big Blue is a steadfast leader in the computer industry and 
now is focusing on ways to get a piece of the Internet pie too.  
Recently IBM announced a technology partnership with a multitude 
of other big players including Cisco, Intel, Motorola, and 
Nokia.  The big picture is for the team to design and develop 
product & services to link wireless phones and computers to 
the Internet.  Now zoom in a little closer and it's IBM who is 
strategically placing itself as the "glue" holding the whole 
"shebang" together.  IBM is still forging ahead in the hardware 
arena as well.  Today it announced a new memory-chip that can 
send twice as much data to a microprocessor than currently 
exists.  Of course IBM's servers will be the first to use the 
new chips!  These types of advancements certainly prove IBM is 
an innovative leader, but importantly for the moment at hand, 
the news has positively effected the stock's share price.  All 
month IBM has been steadily building up a pattern of higher-
lows.  However it wasn't until just a few days ago that it broke 
through the stubborn resistance at $110 and demonstrated it 
could hold the higher level.  And today's gain put another chip 
in its corner.  It marked the first time IBM has seen light 
above the 50-dma indicator (now at $112.71) since the first half 
of February.  The next technical break through is for IBM to 
move above $115 and through the 200-dma.  Short-term support is 
at $112, but firmer at old resistance of $110.  Dips to these 
levels offer entry points into this momentum/technical play.  
Overhead opposition is at today's intraday high of $114.69.  

If the light keeps shining on this stock, it's also possible we 
could run right into an earnings play too!  IBM is expected to 
report in a little more than three weeks around April 17th.  

BUY CALL APR-110*IBM-DB OI=13128 at $8.50 SL=6.00
BUY CALL APR-115 IBM-DC OI= 9610 at $6.13 SL=4.00
BUY CALL APR-120 IBM-DD OI=22377 at $3.88 SL=2.50
BUY CALL MAY-115 IBM-EC OI=   99 at $8.50 SL=6.00
BUY CALL MAY-120 IBM-ED OI= 3188 at $6.38 SL=4.25

Picked on March 21st at $113.50    P/E = 28
Change since picked       +0.00    52-week high=$139.19
Analysts Ratings    12-10-4-0-0    52-week low =$ 81.50
Last earnings 12/99   est= 1.06    actual= 1.12
Next earnings 04-21   est= 0.78    versus= 0.78
Average Daily Volume = 7.12 mln
/charts/charts.asp?symbol=IBM



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

RHAT - Red Hat $57.19 -2.06 (-5.69 this week)

A leading developer and provider of open source software
products and services, RHAT has built a comprehensive web site
dedicated to the open source software community.  The company
provides one of the most popular variants of the Linux-based
operating system, Red Hat Linux as well as providing extensive
content for the open source community.  RHAT currently has
strategic alliances with many of the leading computer companies,
among them Compaq, Dell, IBM, Intel, Oracle, and Hewlett-Packard.

Is this the beginning of the end for the Linux mania?  Caldera
Systems, a developer of services and software for the Linux
operating system jumped 110% in its first day of trading
yesterday.  Although nothing to sneeze at, Caldera's debut was
nothing like the fervor which has surrounded other Linux-related
IPOs.  As the playing field becomes more crowded, companies like
RHAT are beginning to feel the pinch of competition.  Completing
a double-top near $150 right after the first of the year, RHAT
has been declining ever since.  Although managing to arrest the
decline in early March and moving up to almost $80, the past 6
days have been ugly.  In that time, RHAT has dropped below $60
and looks like it wants to challenge the lows from earlier in
the month.  In this latest decline, the 5-dma ($62) has provided
resistance, but that isn't the real story.  RHAT has been unable
to close above its 30-dma (currently $70) since January 14th,
further reinforcing the strength of the downtrend.  Volume will
be the key to a continuation of the decline - if it can continue
to bounce around the ADV, feel free to jump on board as RHAT
rolls over near resistance at $60 or the 5-dma at $62.  Support
will likely show up as RHAT challenges lows (near $54) from
earlier this month.  More conservative investors may want to
wait for a convincing break through this level before opening
new positions.

BUY PUT APR-60*RCV-PL OI=742 at $9.38 SL=6.50
BUY PUT APR-55 RCV-PK OI=615 at $6.63 SL=4.50
BUY PUT APR-50 RCV-PJ OI=671 at $4.25 SL=2.50

Average Daily Volume = 1.96 mln
/charts/charts.asp?symbol=RHAT



**********************
PLAY OF THE DAY - CALL
**********************

NOK - Nokia Corporation $211.00 +9.00 (+11.13)

Finnish Phone Firm, Nokia is the world's number one maker of 
wireless cellular phones, ahead of Motorola, Ericsson and 
Kyocera.  In addition they make wireless networking equipment, 
PC monitors and workstations, digital satellite and cable 
network systems, and set-top boxes.  However mobile phones make 
up 80% of their $19.8 bln in annual sales. 
  
Most Recent Write-Up

Wow!  Nice Recovery!  Technically, NOK now trades back over its
5, 10, 30, and 50-dma.  Support looks good at $200 and $205.  The
next level of resistance is at $215, then $220.  We think it can 
surpass these levels in the next two weeks as it nears its 4:1 
stock split.  While there is no firm date, here is the sequence:
March 22nd (tomorrow) there is a shareholder meeting to authorize
new shares in order for the split to take effect.  We think that
will pass handedly.  At the same time, management should also
announce the actual split date, which we currently estimate to be
the first or second week in April.  We will let you know in
Thursday's write-up.  Want to know what the future holds for NOK
business?  Today, NOK and MOT announced in a BusinessWire article
that they would team up to begin the standardization process for
1XTREME technology.  This will offer operators a cost-effective
migration path to provide integrated voice and data speeds up to
5.2Mbps on a single 1.25MHz code division multiple access (CDMA)
carrier. (Qualcomm gets paid again!)  The 1XTREME proposal 
enables real time voice, data and multimedia services on existing
CDMA 2000 networks allowing end users to browse the Internet from
a personal computer or access email while "on the go".  The Nokia
and Motorola 1XTREME proposal consolidates the companies'
individual efforts, including Motorola's 1X Plus, presented at a
telecommunications industry trade show in New Orleans on Feb 29th.

Comments

Today, NOK was relentless.  Even before the post-interest hike 
rally, NOK was on a tear from the get-go.  It made continual 
advances on decent volume.  This is a very good sign which may
be partly due to the fact that traders are anticipating the 
shareholder vote to authorize additional shares tomorrow.  The 
key level tomorrow is resistance at $215.  A move through there
would confirm NOK's strength and would be a conservative entry 
point.   

BUY CALL APR-200 NZY-DT OI=5165 at $22.00 SL=17.00
BUY CALL APR-210*NZY-DB OI=3799 at $17.38 SL=13.50
BUY CALL APR-220 NZY-DD OI=5950 at $12.00 SL= 9.50
BUY CALL MAY-220 NZY-ED OI=  20 at $18.88 SL=14.75 Low OI

SELL PUT APR-190 NZY-PR OI=1663 at $ 5.25 SL= 6.75
(See risks of selling puts in play legend)

Picked on Mar 09 at     $214.63     P/E = 96
Change since picked       -3.63     52-week high=$227.06
Analysts Ratings     16-9-1-0-0     52-week low =$ 67.69
Last earnings 02/00   est= 0.67     actual= 0.72
Next earnings 05-02   est= 0.61     versus= 0.48
Average Daily Volume = 3.41 mln
/charts/charts.asp?symbol=NOK



************************
COMBOS/SPREADS/STRADDLES
************************

Technology Stocks Join The Party..

Monday, March 20

Blue-chip stocks rallied while technology issues plummeted a day
ahead of the Federal Reserve policy meeting.  The Dow industrials
added 85 points to 10,680.  The Nasdaq composite index fell 188
points to 4,610, its third largest point-loss ever. The S&P 500
index fell 7 points to 1,456.  Declining issues led advances 8-7
on active volume of 917 million shares on the NYSE.  In the bond
market, the 30-year U.S. Treasury rose 8/32 with the yield ending
at 5.99%.


Sunday's new plays (positions/opening prices/strategy):

Telxon      TLXN   JUN12C/APR20C   $6.25   debit   diagonal
E*Trade     EGRP   APR15C/APR25C   $8.75   debit   bull-call
Xerox       XRX    APR20C/APR22C   $2.00   debit   bull-call
Am.Online   AOL    JAN40C/APR65C   $25.00  debit   LEAPS/CC's

Telxon traded in a large range during the session but we did not
observe the target debit.  E*trade was slightly more generous and
the pullback came as expected with a number of opportunities near
our suggested target.  Unfortunately, the issue closed down on
weak buying and may consolidate further.  The XRX spread should
have provided a better-than-expected entry but we did not see the
spread prices for the first part of the session.  Our recorded
debit is a conservative estimate.  AOL was the most difficult
position to gauge with the large bid/ask spread on the LEAPS
position.  The posted debit was within $0.12 of the best spread
price, observed at various times during the day.


Portfolio plays:

New weakness in the technology sector plagued the market Monday
after a negative article in Barron's pressured Internet stocks.
A study conducted by the Internet stock evaluation firm Pegasus
Research indicated that at least 51 Internet firms will run out
of working cash within the next 12 months.  That's almost one
quarter of the companies included in the study and the report
quickly took a toll on the high-flying group.  Now investors are
attempting to balance their portfolios with a favorable sampling
of both classic issues and new economy technology stocks ahead of
Tuesday's meeting of the Federal Open Market Committee.  The FOMC
is expected to push interest rates up 25 basis points to a target
rate of 6%.  While the market has already discounted the current
bid to keep the economy from overheating, it remains significant
as it is the Fed's fifth rate boost in nine months.

The Spreads/Combos portfolio suffered a number of losses in the
technology group but the majority of plays remain favorable ahead
of the Fed's interest rate decision.  There were few bright spots
in today's session and the outcome of many of our spreads will be
determined by the depth of the current correction in the Nasdaq.
Hopefully the conservative outlook many of the positions are based
on will pull them through.  Any of the technology issues that fail
to recover from the recent consolidation should be evaluated for
early exits to protect gains and limit losses.  Obviously there
are a number of other sectors that now offer favorable issues and
our goal is to position available investing capital where it can
best be used.  In the past week, blue-chip issues have been the
market leaders and we may return that group for future plays.


Tuesday, March 21

Equity markets soared today after the Federal Reserve delivered
a highly anticipated interest-rate increase.  The Dow Industrials
rose 227 points to 10,907 and the Nasdaq composite index jumped
101 points to 4,711.  The broader S&P 500 Index gained 37 points
to 1,493.  Advances led declines 3-2 on active volume of 1.06
billion shares on the NYSE.  The 30-year U.S. Treasury bond was
up 13/32, pushing the yield to 5.98%.


Portfolio plays:

Our portfolio recovered with the technology group today after the
Fed announced the expected interest rate increase of one-quarter
point.  The move eased investor's concerns that economic growth
would be squelched by the FOMC's recent bid to keep inflation in
check.  Blue-chip issues soared and the Nasdaq recovered much of
the previous day's losses in a volatile and wide-ranging session.
Most investors had expected a quarter point increase though some
were worried that the target for overnight lending between banks
might be boosted by as much as a half point.  Unfortunately, the
central bank's statement that it sees inflation as a risk to the
economy is seen as a precursor to future rate increase.  Now the
difficulty will be in finding the next "hot" sector and deciding
where to invest for the next big rally; the recovering classics
or downtrodden technology stocks.

Today's list of winners included a number of leading issues and
the rally produced favorable moves in many of sectors.  Our top
positions were in the technology group but blue-chip stocks also
found their way into the headlines.  One of the recent performers
has been Xerox and this week Xerox and Hewlett-Packard (HWP), the
world's largest copier and printer makers, said they settled all
past patent infringement lawsuits between them to avoid legal
costs.  The companies said they reached satisfactory terms and
plan to focus on competing with each other in the marketplace
rather than in the courts.  The news was great for our new debit
spread and the position is already approaching maximum profit.
Another blue-chip issue has been on the move recently and today's
move kept the trend intact.  Navistar (NAV) closed $1.38 higher
at $39.31 and the next test will be the recent resistance level
near $40.  Both new spreads on the issue are profitable in just
the first two weeks.

The majority of portfolio positions participated in the rally
and the leading technology stocks were Advanced Micro Devices
(AMD), up $3 to $54.62; BMC Software (BMCS), up $3 to $54.50 and
Helix (HELX), with a $3 rally to finish at $74.50.  American
Online (AOL) continued its bullish trend ending at a recent high
near $68 and Network Associates (NETA) also closed near session
highs at $34.68.  Metromedia Fibre Network (MFNX) enjoyed a nice
recovery, moving up $5.50 to finish near $89.  Our new diagonal
position profits above $77.00.  Electro Scientific (ESIO) was the
worst of the best, up $1.75 at $60.12.  Of course there were also
some bearish issues and the most obvious losers were again in the
small-cap drug and biotechnology group.  Our current positions in
Epitope (EPTO), Organogenesis (ORG) and Theragenics (TGX) are in
danger of technical failure and they will be closed at the first
sign of a significant change in character.
  

Summary Of Monthly Positions:

******************************************************************
			 - CREDIT SPREAD SUMMARY -
******************************************************************
Stock   Pick     Last     Position    Credit  Cost   G/L    Status

ARBA  $229.00  $266.19  MAR160P/170P  $1.12  $0.25  $0.88   Closed
BEAS  $146.00  $106.06  MAR90P/105P   $2.75  $0.75  $2.00   Closed
CMGI  $140.00  $120.38  MAR115P/120P  $0.75  $0.75  $0.00   Closed
CTXS  $100.06  $98.38   MAR85P/87P    $0.38  $0.00  $0.38   Closed
EXDS  $136.31  $151.25  MAR105P/110P  $0.68  $0.00  $0.68   Closed
ESIO  $64.00   $58.72   APR45P/50P    $1.25   New    Play    Open
FBR   $15.00   $14.88   MAR7P/10P     $0.62  $0.00  $0.62   Closed
IONA  $67.00   $80.38   MAR45P/50P    $0.62  $0.00  $0.62   Closed
ISSX  $97.38   $108.44  MAR70P/75P    $0.75  $0.00  $0.75   Closed
ITVU  $139.00  $127.63  MAR90P/100P   $1.12  $0.25  $0.88   Closed
KLAC  $84.00   $80.00   MAR70P/75P    $0.88  $0.38  $0.50   Closed
LVLT  $124.93  $110.75  MAR110P/115P  $0.88  $1.00 ($0.12)  Closed
MACR  $84.00   $88.97   MAR65P/70P    $0.68  $0.00  $0.68   Closed
MNMD  $91.00   $103.75  MAR70P/75P    $0.50  $0.00  $0.50   Closed
NSOL  $151.43  $221.31  MAR105P/110P  $1.00  $0.18  $0.81   Closed
PEP   $32.75   $33.00   MAR37C/35C    $0.38  $0.00  $0.38   Closed
PLCM  $89.25   $106.75  MAR70P/75P    $0.50  $0.00  $0.50   Closed
VIGN  $228.75  $236.25  M185P/190P    $0.75  $0.12  $0.62   Closed

Note:  A number of these positions were closed early to protect
gains and limit potential losses.  The LVLT play was closed in two
separate trades with a "break-even" target exit.  The Pepsico (PEP)
credit spread was originally listed as a February position.  The
correct expiration month was March and had it been held to the end
of the period, it would have finished profitably.


******************************************************************
			 - CALENDAR SPREAD SUMMARY -
******************************************************************
Stock  Pick    Last     Position     Debit   Value    G/L   Status

EPIC  $9.56   $8.75   JUL12C/APR12C  $0.93   $0.75  ($0.18)  Open
KR    $15.56  $16.68  JUL17C/APR17C  $0.93    New     Play   Open
MUEI  $10.50  $17.75  APR12C/FEB12C ($2.38)  $0.38   $2.75  Closed
NAV   $36.25  $39.38  JUL45C/APR45C  $2.00   $2.38   $0.38   Open
STRX  $8.43   $6.75    MAY7C/APR7C  ($0.50)  $0.18   $0.68   Open

The calendar (or time spread) is profitable if the value of the
position exceeds the initial debit (or cost-basis) at the end of
the expiration period for the long position.  However, because we
track the plays based on the current closing cost/value, the gains
for time spreads will rarely be reflected until the play closes.
Each month, as we sell a new option against the long position, the
net cost should decline or the position value should increase.


******************************************************************
                    - COVERED-CALLS WITH LEAPS -
******************************************************************
Stock  Pick    Last      Position    Debit    Value   G/L  Status

CA    $53.56  $65.56  LJAN60/APR65C ($2.38)  $11.25  $8.88  Open
CS    $16.80  $46.00  LJAN15/APR40C  $17.75  $23.50  $5.50  Open
MDT   $39.38  $52.69  LJAN37/APR45C  $4.75   $9.12   $4.38  Open
NETA  $32.31  $34.81  LJAN15/APR30C  $14.38    New    Play  Open
NETA  $25.12  $34.81  LJAN15/APR25C  $6.88   $10.50  $7.25  Open
PTEK  $8.94   $8.13   LJAN5C/APR10C  $3.25   $3.50   $0.25  Open
VOD   $49.25  $58.81  LJAN45/APR55C  $7.50   $16.00  $8.50  Open
******************************************************************
			  - DIAGONAL SPREAD SUMMARY -
******************************************************************
Stock  Pick    Last     Position     Debit   Value    G/L   Status

ANDW  $27.38  $26.62  JUL15C/APR25C  $8.50    New     Play   Open
BCGI  $5.12   $8.50    JUN5C/APR7C   $0.31   $1.31   $1.00   Open
CDN   $22.81  $23.00  MAY15C/APR20C  $1.68   $4.12   $2.43   Open
CRUS  $14.06  $19.88  JUN10C/MAR17C  $4.75   $6.25   $1.50   Open
DRMD  $10.12  $8.94   JUN5C/APR10C   $3.25   $3.38   $0.12   Open
EPTO  $16.94  $14.06  JUL7C/APR15C   $6.50   $5.00  ($1.50)  Open
ESPI  $10.88  $12.44  JUN5C/APR10C   $3.88   $4.25   $0.38   Open
ISSI  $18.00  $26.63  APR7C/MAR15C   $7.00   $7.50   $0.50  Closed
KEG   $6.81   $11.19  JUL7C/APR10C   $0.93   $2.25   $1.31   Open
MFNX  $89.93  $89.88  MAY60C/APR80C  $17.00   New    Play    Open
MIR   $15.00  $18.25  MAY12C/MAR15C  $2.12   $2.50   $0.38  Closed
MSGI  $20.43  $18.94  MAY12C/APR20C  $3.75   $4.38   $0.62   Open
NAV   $36.25  $39.38  JUL25C/APR35C  $9.00   $9.12   $0.12   Open
ORG   $14.62  $17.13  JUN10C/APR15C  $3.38   $4.38   $1.00   Open
PCMS  $10.06  $20.59  MAY7C/APR17C   $6.00   $7.75   $1.75   Open
RCOT  $7.50   $11.25  MAY5C/APR10C   $3.43   $4.25   $0.81   Open
SVGI  $16.38  $26.44  JUN17C/APR25C  $3.88   $6.00   $2.12   Open
TERA  $6.62   $7.13    JUN5C/APR7C   $0.68   $1.68   $1.00   Open
TGX   $14.56  $13.13  JUN10C/APR15C  $3.25   $3.25   $0.00   Open
TTWO  $18.38  $15.00  JUN7C/APR17C   $8.00   $6.50  ($1.50)  Open
TTWO  $18.38  $15.00  JUN7C/APR15C   $6.50   $5.62  ($0.88)  Open
UIS   $29.25  $26.50  APR22C/MAR30C  $2.50   $6.00   $3.50  Closed
WAVO  $7.88   $7.06    MAY5C/APR7C   $1.43   $1.38  ($0.06) Closed
ZOLT  $7.68   $9.63   APR7C/MAR10C   $0.06   $2.38   $2.31  Closed

* A number of these positions were closed early to protect profits
  or prevent (limit) potential losses.

The diagonal spread is profitable if the value of the position
exceeds the initial debit (or cost-basis) at the expiration of
the long position.  However, because we track the plays based on
the current closing cost/value, the gains for diagonal spreads
will rarely be reflected until the play closes.  Each month, as
we sell a new option against the long position, the net cost
should decline or the position value should increase.


******************************************************************
			      - DEBIT SPREADS -
******************************************************************
Stock  Pick    Last     Position    Debit   Value    G/L   Status

AMD   $58.12  $50.00   APR37C/50C  $8.62   $7.25   ($1.38)  Open
BEAS  $84.94  $106.06  MAR50C/65C  $12.38  $14.75   $2.38  Closed
BILL  $8.31   $7.38    APR7CC/NP   $6.62    New     Play    Open
BMCS  $51.43  $55.06   APR35C/45C  $8.50   $8.75    $0.25   Open
BVF   $56.93  $50.63   APR42/90C   $5.00   $5.00    $0.00  Closed
CPWR  $23.56  $24.63   MAR20C/22C  $1.88     No     Play   Closed
DISH  $100.00 $121.06  MAR80C/90C  $9.00   $10.00   $1.00  Closed
ESCM  $11.31  $14.38   APR7C/10C   $1.38   $1.62    $0.25   Open
HELX  $51.00  $68.34   APR25C/45C  $15.75  $18.62   $2.88   Open
ICGX  $30.94  $35.06   MAR20C/25C  $4.38   $5.00    $0.62  Closed
IDTC  $33.94  $32.81   MAR22C/30C  $5.38   $7.50    $2.12  Closed
MRVC  $90.50  $132.88  MAR60C/70C  $9.00   $10.00   $1.00  Closed
MYPT  $66.12  $54.75   APR50C/55C  $3.75   $2.50   ($1.25) Closed
NTPA  $77.50  $80.88   MAR50C/65C  $13.25  $15.00   $1.75  Closed
RMII  $11.00  $10.13   MAY5C/10C   $3.62   $2.75   ($0.88)  Open
SPLN  $57.25  $44.25   APR40C/50C  $7.00   $6.00   ($1.00) Closed
TUP   $16.81  $17.06   APR15C/17C  $1.25   $1.00   ($0.25) Closed
UFS   $15.50  $25.25   MAR12CC/NP  $12.00  $12.50   $0.50  Closed
VLNC  $35.88  $33.84   MAR20C/25C  $4.25   $5.00    $0.75  Closed
VSTR  $155.31 $124.31  MA110/130C  $17.00  $14.00  ($3.00) Closed

* A number of these positions were closed early to protect profits
  or prevent (limit) potential losses.  Tupperware (TUP) actually
  finished at maximum profit.

A debit-spread is profitable if the value of the position exceeds
the initial cost of the spread when the play is closed.  However,
because we track plays based on the current cost/value, potential
gains may not be reflected until both positions are closed.


******************************************************************
			      - DEBIT STRADDLES -
******************************************************************
Stock  Pick     Last    Position    Debit    M/V     C/V    Status

APLX  $14.62   $16.38   JUL15C/15P  $6.50   $8.25   $6.50    Open
CBR   $27.19   $21.25   MAY25C/30P  $10.25  $12.50  $10.00   Open
LHSG  $25.50   $48.75   APR25C/25P  $6.75   $27.00  $21.25  Closed
NLCS  $49.56   $47.94   JUL50C/50P  $9.62   $10.75  $10.50   Open

          M/V = Maximum Value  C/V = Current Value

A debit-straddle is profitable when the value of the position
exceeds the initial cost.

****

Note: We trade the Spreads portfolio just as we would trade our
personal account and the ongoing narrative is a service we provide
to help novice traders understand how various positions might be
opened and closed.  It is not intended to substitute for your own
trading techniques nor does it replace your duty to manage the
positions in your portfolio.  We post a list of the current plays
after each expiration period and the summary is a reasonable
representation of the positions offered during the month.

Questions & comments on spreads/combos to Click here to email Ray Cummins


******************************************************************
                       - Speculation Plays -

Today's positions are based on recent increased activity in the
stock and underlying options.  All of these plays offer favorable
risk/reward potential but they should be evaluated for portfolio 
suitability and reviewed with regard to your strategic approach
and trading style.

****

MO - Philip Morris  $20.44  *** A Big Day! ***

Philip Morris Companies is the largest consumer packaged goods
company in the world.  Its subsidiaries are engaged in the
manufacture and sale of various consumer products.  Philip Morris
Capital Corporation, also a wholly owned subsidiary, engages in
various financing and investment activities.  Philip Morris and
its subsidiaries are also the largest cigarette manufacturers
and suppliers in the United States.  They distribute these
products internationally.  Kraft Foods is the largest processor
and marketer of retail packaged foods in the United States and
its international subsidiaries supply the same products for the
international market.  Miller Brewing is the second largest
brewing company in the United States.

Cigarette makers rejoiced today after a Supreme Court ruling that
said the Food and Drug Administration lacks authority to regulate
tobacco products.  Philip Morris officials opposed the FDA rule
because it apparently regulated cigarettes as medical devices and
the 5-4 decision ruling was a major victory for the industry as
it has been hit with a number of civil lawsuits in past months.
The Supreme Court ruled that the government agency overstepped its
authority in 1996 when it issued sweeping regulations involving
cigarettes and smokeless tobacco.  After the announcement, tobacco
companies suggested they could comply with actions to reduce youth
smoking as long as an adult's right to smoke was not abused.  The
news brought a flood of traders to the options pits and Implied

Volatility and Volume in call options rose to historically high
levels.  The busiest options were the April 20 and 22.5 calls on
the American Stock Exchange and call activity was also heavy on
the CBOE and the Pacifex.  We noticed two positions that benefit
from the volatility in front-month options and either spread is
viable, depending on your technical outlook for the issue.


PLAY (aggressive - bullish/calendar spread):

BUY  CALL  JUN-22.50  MO-FX  OI=9844   A=$1.50
SELL CALL  APR-22.50  MO-DX  OI=11551  B=$0.56
INITIAL NET DEBIT TARGET=$0.88 TARGET ROI=40%

- or -
 
PLAY (conservative - bullish/calendar spread):

BUY  CALL  JUN-25  MO-FE  OI=22881  A=$0.88
SELL CALL  APR-25  MO-DE  OI=17483  B=$0.25
INITIAL NET DEBIT TARGET=$0.56 TARGET ROI=25%

Chart =
/charts/charts.asp?symbol=MO

****

APCC - American Power Conversion  $41.06  ** Break-Out! ***

American Power Conversion designs, manufactures and markets power
protection and management solutions for computer and electronic
applications.  Their unique solutions include uninterruptable
power supply products (UPS), electrical surge protection devices,
power conditioning products and associated software, services and
accessories.  The company's line of UPS products ranges from 200
volt-amps (suitable for a PC) to 480 kVA (suitable for mainframe 
computers or facilities).  The company also offers SurgeArrest,
PowerManager and ProtectNet to protect against power spikes and
surges.  A family of software products under the PowerChute Plus
name provides its users with unattended shutdown capabilities, UPS
power management, and diagnostic features.

American Power Conversion is on the move and today's news that
they were chosen by PC and computing products maker Acer to be the
exclusive power protection vendor for Acer's "shopacer.com online"
outlet boosted the issue $5.  The announcement follows news that
Hewlett-Packard recently recommended American Power Conversion as
its uninterruptible power supply vendor of choice for HP NetServer
systems.  Hewlett-Packard and APCC also announced a global resale
agreement.  The strategic alliance enables HP to exclusively offer
APC's Smart-UPS series of rack-mount UPSs to customers worldwide.
APCC is already the leading UPS manufacturer in many countries and
in early March, a revenue-based report stated they have obtained
the lead share position in China for uninterruptible power supply
sales.

With the recent rise, speculation is rampant.  Option buyers have
moved further into this issue on the break-out and although APCC
enjoyed a big rally today, there may be another chance for a
conservative position.  With any luck, a small pullback will occur,
allowing us to enter this spread at a favorable price.


PLAY (conservative - bullish/credit spread):

BUY  PUT  APR-30  PWQ-PF  OI=100  A=$0.31
SELL PUT  APR-35  PWQ-PG  OI=188  B=$0.88
NET CREDIT TARGET=$0.75 ROI(max)=17%
 
Chart =
/charts/charts.asp?symbol=APCC

****

HLT - Hilton Hotels  $8.38  *** What's Up? ***

Hilton Hotels is the world's leading lodging company.  Hilton
develops, owns, manages, and franchises hotels, resorts and
vacation ownership resorts.  All of Hilton's properties in the
United States, with the exception of those operated by Conrad
International Hotels Corporation, a subsidiary of the Company,
three franchise hotels operated in Canada and three franchise
hotels operated in Mexico.  Hilton owns an interest in and
operates 38 hotels and manages 24 hotels owned by others.  In
addition, 185 hotels are franchise operated under the Hilton,
Hilton Garden Inn and Hilton Suites names.  Flagship properties
include the Waldorf Astoria, the Hilton Hawaiian Village, and
the Chicago Hilton and Towers.  Their other activities include
the subsidiary, Hilton Grand Vacations Company, which develops
markets and operates vacation ownership resorts in Florida and
Nevada.

This stock has everybody wondering "What's Up?" as the technical
character of the issue has reversed completely in the last few
weeks.  New option interest is growing and the speculation lacks
direction.  Some suggest the bullish trend is related to the
recent buyout of Mirage Resorts and others refer to the article
in Barrons that said hotel industry leaders may create Internet
sites that benefit from online travel reservations.  Regardless
of the reason, the evidence is clear in the chart and this play
offers one of the easiest ways to participate (with options) in
a future upward movement.


PLAY (conservative - bullish/diagonal spread):

BUY  CALL  MAY-7.50   HLT-EU  OI=70    A=$1.38
SELL CALL  APR-10.00  HLT-DB  OI=7610  B=$0.31
NET DEBIT TARGET=$1.00 INITIAL ROI TARGET=25%

Chart =
/charts/charts.asp?symbol=HLT


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