Option Investor

Daily Newsletter, Wednesday, 04/05/2000

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The Option Investor Newsletter                Wednesday   4-5-2000
Copyright 2000, All rights reserved.
Redistribution in any form strictly prohibited.

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

Also provided as a service to The Online Investor Advantage
MARKET WRAP  (view in courier font for table alignment)
       4-05-2000           High     Low     Volume Advance Decline
DOW    11033.90 - 130.90 11218.20 11002.60 1,120,836k 1,658  1,305
Nasdaq 4,169.22 +  20.33  4286.88  4009.09 1,878,160k 2,269  1,973
S&P-100  806.29 -   9.33   817.63   801.18    Totals  3,927  4,583
S&P-500 1487.37 -  11.24  1506.55  1478.05            46.1%  53.9%
$RUT     518.04 +  11.92   526.13   494.03
$TRAN   2824.28 +  99.33  2835.95  2720.76
VIX       30.59 +   2.69    65.45    29.11
Put/Call Ratio       .55

NASDAQ +20, What A Rebound!

The markets were poised for a bounce, right?  Well, they gave 
it a shot despite a gap down opening that saw the Nasdaq give 
up another +100 points.  That was short-lived though and buyers 
quickly emerged, pushing the Nasdaq to an intraday high of 
4286 before the slow retracement began around 3pm EST.  It 
bled off most of the gains before jumping back to positive 
territory in the final few minutes.  But it was nothing to 
write home about, that is for sure.  But many traders were 
relieved to see at least a calming to the volatility that 
rocked Wall Street yesterday.  The intraday swing for the 
Nasdaq was ONLY 277 points.  A week ago we would have considered 
that violent.  So chalk up a minimal gain for the Nasdaq, but 
don't rest too easy because the legs behind this rally were 
noticeably shaky.  

The DJIA and S&P 500 were no help either as both markets 
decided to give up more ground.  Don't look now, but the DJIA 
closed back below 11,100 and was seriously making a case for 
below 11,000 close.  When the dust cleared, the DJIA posted a 
close of 11033.92, down 130.92.  The S&P finished down 6.93 
to 1487.80 and below the key 1500 level.  That level acted as 
resistance all day too.  Volume was steady on the DJIA with 
over 1.1 billion, while the Nasdaq turned in 1.9 billion.  
The technical picture doesn't look great for either market.  
You can see on the DJIA chart the big drop and subsequent 
recovery, but is this another rollover we are seeing?  The 
only hope is that the Industrials have been stuck in this 
congestion around 11,000 for so long that it may continue to 
hold on.  The Nasdaq chart is longer-term to show that today 
may be the top of the range in this recent trend.  You have 
to wonder with the kind of damage that was done on Tuesday if 
this market can really come back right away.  



Today's selloff came in the face of some key figures trying 
to calm the markets to some degree.  Abby Joseph Cohen, chief 
investment strategist at Goldman Sachs and the one who many 
peg as the catalyst for the recent decline, came out more up 
beat today at a conference at the White House.  She said that 
she is still optimistic for stock prices this year. "For the 
past decade, we have been enthusiastic about the outlook for 
U.S. stock prices in the United States, and we remain so." 
were her exact words.  Alan Greenspan also spoke today in 
Washington and also had a similar calming tone to his speak.  
Although he did little to tip his hand to the future direction 
of interest rates.  He gave credit to the "extraordinary surge 
in technological innovation" for America's current record-
breaking economy.   

Strength could be found in certain sectors with Airlines, 
Biotechs, Semiconductors and Utilities moving higher.  On the 
downside were Oil, Drugs, Retail and Telecom.  There were a 
lot of stocks posting big intraday gains too before selling off 
near the close.  AFFX was +28 before closing +22, VIGN was 
+31 before ending +15, INKT was +16 before closing up +2 and 
VRSN was up +20 before ending up only +10.  That sums up the 
Nasdaq action pretty well.  Stocks tried to rebound, but were 
met with heavy selling in the final hour.  

By the looks of things today, enthusiasm for YHOO's earnings 
seemed non-existent.  The typical pre-earnings run-up in YHOO 
didn't happen as YHOO had trouble holding $165.  After the close, 
YHOO reported 1st quarter earnings of $0.10 per diluted share, 
beating the Street consensus of $0.09 and meeting the whisper 
number.  At first, YHOO shot up to $171 in after-hours trading, 
only to sell-off in typical fashion.  It traded as low as $158.
Independent of the stock move, YHOO's numbers looked good.  Their 
revenues were up 13% from last quarter.  Evidence of their global
expansion is that 14% of revenues were international.  Also, page
views per day reached 625 mln in March versus only 465 mln in 

The Biotechs finally got some relief today after having a rocky 
ride throughout March.  They have been on an accelerated slide
ever since President Clinton and Prime Minister Tony Blair 
declared that advances in human genome research should be made
publicly available.  Today, at a White House press conference on
the New Economy, President Clinton joked that he did not mean 
to move the markets in mid-March with his comments pointed at
gene research.  He said researchers who discover commercial 
applications for genetic information should have the right to
patent their discoveries.  However, Clinton added that genetic
information that is discovered as part of the Human Genome 
Project should be made public.  The Biotech Index($BTK) rose 
26.50 points to 500, a 5.6% advance.  Leading the sector was 
INCY, up 18%, HGSI and CYTO surged 19%, and BGEN edged up 10%.

In a victory for the "old economy" stocks, Sears Roebuck(S)
preannounced today that it expects first quarter earnings to 
come in between $0.62 and $0.67 per share.  Quite an impressive 
gain compared with last year's first quarter earnings of only 
$0.38 per share.  These current figures will be record earnings 
for the "old economy" behemoth.  Both their domestic store 
sales and revenues surged in the first three months of 2000.  
Contributing to the bottomline for Sears was strong retail 
demand, continuing strength in its credit service business, 
and their stock buy back program resulting in fewer outstanding 
shares.  This positive news should carry on throughout the year 
as Sears expects a full-year earnings per share growth rate 
between 13% and 17%, higher than previous estimates of 11%.  
Sears rose sharply on the news, closing up $7 at $37.50.
The bottom line?  They sold an extra washer and few more 
shirts than expected.  

The trick here is to try and figure how traders will react to 
the employment report due out Friday morning.  Does anyone 
care what the numbers are as long as they aren't really out of 
line?  It seems to me that traders are busy trying to determine 
market sentiment and how quickly institutions will return to 
the previously coveted tech stocks.  A relief rally for the 
Nasdaq is in order, but I am afraid we may have seen it today.  
YHOO posting an average earnings number after the close didn't 
help any.  If the selling in the Internets that we typically 
see post-Yahoo earnings begins tomorrow, it could quickly get 
out of hand again.  It is hard to make the case that valuations 
are now in line and don't deserve another sell-off when you 
still have high relative prices vs. even a year ago.  So the 
employment report could be on the back burner tomorrow.  

With that said, the volatility did decrease today and volume 
wasn't beserk with individuals selling.  If the market can 
stabilize and investors slowly get the nerve to begin placing 
some more bids, we may have seen the worst.  A little more 
consolidation may be just what the doctor ordered before 
seeing the Nasdaq return to higher levels.  Remember, the 
Nasdaq was at 4600 just last Thursday.  Although a sustained 
rally may be too much to ask for.  A continuation of the 
recovery to the 4450 level is what some traders are looking 
for.  That was the level that provided good support in March 
and will now turn into resistance.   

Due to the recent volatility, I have been keeping my trades to 
the intraday kind, not feeling brave enough to hold overnight.  
The wild swings have actually made for some good trading 
conditions too, when my broker can get a fast execution, that 
is.  I look to do more of the same; quick, fast trades headed 
where ever the trend is going that hour.  Look for more of 
the same and...when in doubt, get out.  Save yourself from the 
headache of trying to implement a disaster recovery strategy 
on something you should have bailed out of sooner.  

Ryan Nelson
Asst. Editor

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A Little Stability for a Volatile Market
By  S.P. Brown

After two days of margin calls and massive losses, many 
investors have had their ardor for risk cool faster than Rick 
Rockwell and Darva Conger's romance.  It's understandable.  
After two years of soaring equity prices, it's easy to be duped 
into believing that stocks prices only go one way, and that's 

However, over the past two weeks, the reality that risk is 
indeed a double-edged sword has been driven home with all the 
subtlety of a punch to the nose.  The fact is, a $100 stock can 
just as easily go to $50 as it can go to $150, and when that 
stock does go to $50, the pain is often more excruciating than 
many investors imagine.

So, for those folks who have been burned badly over the last 
few weeks, or who just want to let the Nasdaq Composite Index 
(COMPX) test 3,600 a few times before you getting back in the 
game, here's a nice little stock to consider tying you over in 
the meantime.  Be forewarned, though, this stock is boring, 
it's not tech and it's trading at it's 52-week low.  It's Ennis 
Business Forms (EBF).

Yes, Ennis' business is as pedestrian as its name sounds 
(there's no covert B2B e-commerce strategy lurking in the 
background).  The company is a leading producer of business 
forms.  Approximately 95 percent of Ennis' products are custom 
and semi-custom constructed in a wide variety of sizes, colors, 
number of parts and quantities on an individual job basis 
depending upon the customer specifications. 

Some of the company's traditional offerings include stock and 
custom business forms and blank checks, as well as non-
traditional offerings such as commercial printing, promotional 
products, awards and ribbons, office supplies, tags, labels and 
presentation products (try to keep those eyelids open).

Ennis operates 16 manufacturing locations in 11 states, which 
provides its 46,000 dealers a national network for meeting 
customer demands.  The company's major customers include 
advertising specialty dealers, printing brokers, direct 
manufacturers, wholesale/catalogers, commercial printers and 
franchise organizations.  

Though not a fast grower, sales have crawled along at a 2 
percent annual rate over the past four years, there is still a 
lot to like about Ennis.  For one, it's got a balance sheet to 
die for.  The company has no long-term debt (remember those 
nasty interest rate increases?) and a current ratio of 4.15.  
Additionally, it sports a price-to-sales (P/S) ratio of 0.73, a 
price-to-earnings (P/E) ratio of 9.74 and a price-to-book (P/B) 
ratio of 1.32.  

On top of a clean balance and Ben Graham-like valuation ratios, 
Ennis consistency provides high returns on equity (over the 
past five years, it's averaged a ROE of 21 percent) and strong 
cash flows with little risk.  

For the nine months ended November 1999, which was the end of 
the last reporting period, sales at Ennis rose 6 percent to 
$119 million, while net income advanced 13 percent to $11.1 
million.  The higher than average growth reflects an increase 
in the business forms segment and lower raw materials costs and 
efficiency improvements. 

Obviously, Ennis is no Cisco Systems (CSCO).  However, there is 
a good probability that Ennis' snail-like revenue growth will 
pick up some steam over the next 12 to 18 months, for the 
company has gone on a minor acquisition binge over the past few 
months.  In November 1999, Ennis acquired Adams McClure Inc., a 
point of purchase display enterprise located in Denver for 
$16.7 million.  Adams had $30 million in revenue for 1999.   

Following that little coupe, Ennis purchased American Forms 
Inc., a San Antonio-based manufacturer of business forms for 
$2.1 million.  American should add at least $4.5 million to the 
top line.   

But that's not the end of the story.  In January 2000, Ennis 
signed a letter of intent to form a strategic alliance with 
Safeguard Business Systems.  The agreement will allow the 
company to promote its traditional forms products to 
Safeguard's large national distributor network.  

Admittedly, despite these acquisitions, Ennis is probably going 
nowhere fast.  The company has no major institutional followers 
(you'll be lucky if you get ten messages on its Yahoo message 
board a month).  What's more, it's 52-week price range is only 
$6.81 to $9.75 (it currently trades at $7.38).   

Nevertheless, for investors ready for a breather, Ennis 
provides an annual dividend of $0.62 per share that's easily 
covered by its $1.19 in annual cash flow (that's a 8.40 percent 

But here's the most intriguing feature of Ennis that many 
investors overlook when constructing a diversified portfolio, 
it's not positively correlated with the stock market.  

Ennis is one of those rare companies that sports a negative 
beta, which is -.15.  This means that historically Ennis has, 
on average, moved down $0.15 for every point the market has 
moved up.  However, on the flip side, Ennis has moved up $0.15 
for every point the market has moved down.

This is a nifty little characteristic to have for investors 
interested in reducing the volatility in their portfolios, and 
it's one many investors neglect.  Therefore, Ennis can be more 
than just a temporary store of cash, it can make an excellent 
addition to a well-diversified portfolio. 

Admittedly, Ennis isn't going to shake-up the world.  In fact, 
the business forms industry is probably as mature as a thriving  
industry can be.  However, Ennis has prospered by catering to 
smaller customers more likely to do business the old fashioned 
way - on paper (and there are a lot of those businesses out 
there), which proves it's still possible to make money by just 
doing the simple things well.


IIJI - $64.38 +8.88 (-5.38)

IIJI offers a range of Internet access and Internet-related 
services primarily to large corporations and other ISPs in 
Japan.  The company has one of the largest Internet backbone 
networks (A-Bone) which connect eight Asia/Pacific countries 
and also leases networks that connect Japan and the US. 
Most Recent Write-Up

Yes indeed!  Things got even uglier for IIJI the past two days.  
IIJI ran through the first line of defense at $67.13 (Friday's 
daily low) and then tackled support at $65 with ease by 
mid-afternoon in Monday's session.  The momentum kept on rolling 
and IIJI dived to $50.  This big upset in the share price was 
much quicker than anticipated, but certainly welcome!  The upward 
bounce off this bottom support level is not too unusual, 
especially when you consider investors haven't seen the stock dip 
to these levels for many moons.  So while the downward trend is 
intact and the momentum quite forceful, be alert for further signs 
of a rebound.  Some investors may see the 32.3%, or $26.50 drop of 
late just too good of a deal to pass up!  Although from a 
technical perspective the MACD, Momentum, and Stochastic 
indicators are still pointing south suggesting further declines.  


Although IIJI had a relatively strong day from the NASDAQ relief
rally, it couldn't break through its 10-dma at $72.  IIJI grew 
weak at the end of the day, giving up almost $8 in the final hour
of trading.  We feel that this weakness may continue tomorrow and
that any retest of the NASDAQ's recent lows certainly will weigh
heavily on IIJI.  Use caution when entering this put play and 
watch for NASDAQ movement and direction as a cue.  

BUY PUT APR-75 IUJ-PO OI=44 at $12.75 SL=10.25
BUY PUT APR-70 IUJ-PN OI= 0 at $ 9.00 SL= 6.75 Wait for OI!
BUY PUT APR-65*IUJ-PM OI=13 at $ 6.00 SL= 4.25
Average Daily Volume = 387 K


Looking For the Bottom...

Unfortunately, we have no evidence the recent technology sell-off
has come to an end.

This week's activity appears to be the final stages of a complete
restructuring of the technology market.  An unprecedented change
of attitude regarding earnings is occurring and only the leading
companies will survive.  With that outlook in mind, we are going
to list a small group of issues that can be considered investment
quality portfolio holdings; companies that offer excellent future
potential regardless of the short-term market condition.

Summary of Previous Picks:

Covered Calls: (Margin would double the listed Monthly Return)

Stock  Strike Strike Cost   Current Profit  Monthly
Symbol Month  Price  Basis  Price   (Loss)  Return

AFCI    APR    55    49.75   58.00   $5.25   7.3%
PCLE    APR    25    23.47   29.69   $1.54   6.7% Split 2 -1
ASYT    APR    40    37.18   53.25   $2.82   6.2% 
SPYG    APR    55    52.37   54.50   $2.13   5.4% Near 150dma
NXTV    APR   125   117.71  128.13   $7.29   5.1% Wow!?!
CY      APR    45    42.93   46.06   $2.07   4.9% Still Above 50dma
YHOO    APR   175   165.07  169.88   $4.82   3.0% Earnings Ouch?
DITC    APR    90    83.38   86.50   $3.13   2.6% Key Moment
ZIXI    APR    65    62.50   62.00  -$0.50   0.0% Watch Closely
ISSX    APR   105    96.19   95.00  -$1.18   0.0% Hopeful
MANU    APR    45    42.50   40.38  -$2.12   0.0% Watch Closely
PHCM    APR   120   114.51  112.19  -$2.31   0.0% No Lower
PHTN    APR    70    66.50   56.75  -$9.75   0.0% No Lower
PUMA    APR    67    62.88   43.75  -$19.12  0.0% No Lower
TGNT    APR    80    75.25   54.63  -$20.62  0.0% Closing 


New Era Of Networks (NEON) - Closed well below 150 dma

Naked Puts:

Stock  Strike Strike Cost   Current Profit  Monthly
Symbol Month  Price  Basis  Price   (Loss)  Return

ASYT    APR    35    33.38   53.25   $1.63  11.5%
AFCI    APR    45    42.63   58.00   $2.38  10.1%
NXTV    APR   115   110.63  128.13   $4.38   9.9%
YHOO    APR   155   150.75  169.88   $4.25   9.9%
ISSX    APR    90    86.38   95.00   $3.63   9.0%
MU      APR    85    82.25  131.00   $2.75   8.9%
CY      APR    40    39.00   46.06   $1.00   8.7%
INKT    APR   140   136.00  160.38   $4.00   7.6%
PCLE    APR    22    22.03   29.69   $0.47   7.6% Split 2 -1
PHCM    APR   105   102.56  112.19   $2.44   7.6% Watch Closely
SPYG    APR    45    44.12   54.50   $0.88   7.5% Near 150dma
IMNX    APR    51    49.83   62.56   $1.83   7.4% Split 3 - 1
KSU     APR    75    73.87   78.00   $1.13   7.0% Bouncing!
NT      APR   115   112.62  117.13   $2.38   6.5% Next support - 105
SFE     APR    60    58.00   60.50   $1.42   6.3% Split 3 - 1
MANU    APR    35    34.44   40.38   $0.56   6.0% Watch Closely
AFCI    APR    45    43.81   58.00   $1.19   5.9% Bouncing!
QCOM    APR   130   128.37  141.25   $1.63   5.8% Still Lateral
ZIXI    APR    55    54.19   62.00   $0.81   5.7% Watch Closely
PHTN    APR    65    63.94   56.75  -$7.19   0.0% No Lower
MFNX    APR    75    73.56   66.25  -$7.31   0.0% Watch Closely
IBIS    APR    85    83.25   70.00  -$13.25  0.0% No Lower
TGNT    APR    70    67.94   54.63  -$13.31  0.0% Closing
PUMA    APR    60    57.82   43.75  -$14.06  0.0% No Lower


New Era Of Networks (NEON) - Closed well below 150 dma


We list favorable "in-the-money" covered write and "out-of-the-
money" naked put candidates that offer conservative entry points 
into technically bullish charts, with reasonable monthly returns. 

The positions that we find favorable (and will track every week) 
will be marked by asterisks. Do not enter these trades unless you
fully understand the strategy and various methods of manipulating
the position should the stock price drop, or rise, and in the 
event you decide you want to keep the issue.


AMAT - Applied Materials  $104.19  *** On The Move Again! ***

Applied Materials is the world's largest semiconductor equipment
company.  AMAT develops, manufactures, markets and services
semiconductor wafer fabrication equipment and related spare parts
for the worldwide semiconductor industry.  Customers for these
products include semiconductor wafer manufacturers and
semiconductor integrated circuit (IC or chip) manufacturers that
either use the ICs they manufacture in their own products or sell
them to other companies.  These ICs are the key components in most
advanced electronic products such as computers, telecommunications
devices, automotive engine management systems and electronic games.

Applied Materials moved higher today on volume of more than 21
million shares - three times the stock's average daily volume.
Analysts at Adams, Harkness & Hill raised the manufacturer of
computer chip-making equipment to "accumulate" from "market
perform."  Technically this issue has performed very well given
the broader markets' weakness in recent weeks.  Looking forward,
AMAT will likely continue higher as momentum traders move back
into this market favorite.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call APR 95   ANC DS  3949     12.25    91.94     6.3% ***

Sell Put  APR 85   ANC PQ  3396      1.56    83.44    12.3% ***
Sell Put  APR 87.5 ANC PY  1232      1.88    85.62    13.3%
Sell Put  APR 90   ANC PR  4777      2.38    87.62    15.1%
Sell Put  APR 92.5 ANC PZ  2006      3.13    89.37    18.0%
Sell Put  APR 95   ANC PS  2673      3.88    91.12    20.3%

Chart =


AMD - Advanced Micro Devices  $68.38 *** Entry Point! ***

Advanced Micro Devices is a worldwide semiconductor manufacturer.
Their products include a wide variety of industry-standard
integrated circuits used in product applications such as
telecommunications equipment, data and network communications
equipment, consumer electronics, personal computers and
workstations.  AMD also produces flash memory chips, which retain
data stored in them after the power is cut off.  Flash memory is
widely used in hand-held devices such as the Palm Inc. electronic
organizer and mobile phones.  AMD has benefited from increased
demand for flash memory and will continue to be one of the
leaders in this growing industry.

Semiconductor stocks posted significant gains today with Micron
Technology (MU) leading the group higher.  Advanced Micro Devices
also enjoyed a significant rally.  AMD rose almost $7 after the
company said that it expects first quarter sales to surpass $1
billion.  The new all-time high suggests the trend is intact and
should continue.  We simply favor the conservative cost basis for
the bullish issue.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAY 60   AMD EL  1698     13.13    55.25     5.9% ***

Sell Put  APR 50   AMD PJ  2104      0.44    49.56     5.9% ***
Sell Put  APR 55   AMD PK  2584      1.06    53.94    13.4%
Sell Put  APR 60   AMD PL  1057      2.13    57.87    19.2%

Chart =


CSCO - Cisco  $72.13  *** A Core Portfolio Issue! ***

Cisco Systems provides networking for the Internet.  Cisco
creates hardware and software solutions that link computer
networks so as to facilitate easy access to information
regardless of differences in time, place or type of computer
system.  Their product portfolio offers end-to-end networking
products and services.  Their wide range of products enable them
to configure hardware and software features to meet customer
requirements.  They are now also delivering video and voice
capabilities in its products, allowing customers to transition
their data networks to a single multiservice data, voice and
video network.

Cisco is one of the all-time, leading technology companies and
should certainly be a core holding of any long-term portfolio.
Their bullish performance over the past 5 years is incredible
and the company's dominant industry position along with a solid
fundamental outlook suggests the trend will continue.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAY 67.5 CWY EU  1321      9.25    62.88     5.1% ***

Sell Put  APR 60   CWY PL  16684     0.56    59.44     6.2% ***
Sell Put  APR 62.5 CWY PZ  12198     0.81    61.69     7.7%
Sell Put  APR 65   CWY PM  15536     1.50    63.50    12.3%

Chart =


IBM - International Business Machines  $125.00 *** Big Blue! ***

International Business Machines provides customer solutions
through the use of advanced information technology.  Their
major operations are conducted through several operating
segments.  The Personal Systems segment produces general-purpose
computer systems, including some software.  The Server segment
produces multi-purpose computer systems that operate many open
network based applications.  The Global Services segment is a
versatile information technology services provider, supporting
computer hardware and software products.  Other segments cover
operations in financing, software, and enterprise investments

Everybody knows IBM and because of its long-term stability, the
issue has received new investor attention in recent weeks.  The
company has been working diligently to expand its profit base and
today engineering and technology group ABB announced that it has
signed a $250 million global information technology agreement
with IBM to cover its equipment needs.  Swiss-Swedish ABB will
lease about 75,000 desktop computers, 25,000 laptop computers and
9,000 servers from IBM, and will order them directly through a
Web-based procurement system.  That's one giant order and it will
certainly help IBM's future revenues.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Put  APR 110  IBM PB  15035    1.56    108.44     8.1% ***
Sell Put  APR 115  IBM PC  11002    2.50    112.50    11.2%

Chart =


IMNX - Immunex  $62.56  *** Own This One! ***

Immunex is a biopharmaceutical company that discovers, develops,
manufactures and markets innovative therapeutic products for the
treatment of human diseases including cancer, infectious diseases
and immunological disorders.  Their major product lines includes
drugs that are effective in treating arthritis, pain in cancer
patients, and in stimulating infection-fighting white blood
cells.  Immunex is currently developing new products to address
ailments such as inflammatory disease, infection, multiple
sclerosis, asthma and cancer.

Immunex is one of the better-known drug and biotechnology
giants and its long-term performance is almost unchallenged in
the industry.  The classic post split sell-off did not occur
and now the issue appears ready to resume its up-trend.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAY 50   QUV EJ  45       16.00    46.56     5.1% ***

Sell Put  APR 45   IUU PI  442       0.56    44.44     8.2% ***
Sell Put  APR 50   QUV PJ  2861      1.13    48.87    15.7%

Chart =


MNMD - Minimed  $132.50  *** A Favorable Cost Basis! ***

MiniMed designs, develops, manufactures and markets advanced
microinfusion systems for delivery of a variety of drugs
primarily focusing on diabetes management.  They have
historically sold external insulin pumps and related disposables,
which are designed to deliver small quantities of insulin in a
controlled, programmable profile.  The programmable external
insulin pumps are thin and lightweight (about the size of a
pager) and designed to be worn under the patient's clothing in
order not to interfere with normal daily activities.  They also
have developed an implantable pump, which  has  so far been
solely utilized for insulin delivery.  MiniMed plans to diversify
its drug delivery programs, to expand the market for insulin
pumps, and to diversify into disease management and the
distribution of additional diabetes products.  MiniMed is
planning improvements to its current insulin pump related

Minimed is one of several pharmaceutical and biotech stocks that
have performed well amid the technology sell-off.  Stocks in
these industry groups have been hammered in recent weeks and
today's recovery may reflect a rotation back into the sector.
The new all-time high for the issue is one such indication as
leading companies are generally the first to benefit from any
new inflow of capital to a particular industry group.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Put  APR 100  MAQ PT  46       0.75     99.25     5.2% ***
Sell Put  APR 105  MAQ PA  5        1.31    103.69     9.0%

Chart =


SUN - Sun Microsystems  $88.75  *** Entry Point! ***

Sun Microsystems is a worldwide provider of products, services
and support solutions for building and maintaining network
computing environments.  Sun sells scaleable computer systems,
high-speed microprocessors and high performance software for
operating network computing equipment and storage products.  They
also provide support, education and professional services.  The
company's products are used for many demanding commercial and
technical applications in various industries including telecom,
manufacturing, financial services, education, retail, government,
energy and healthcare.

Sun Microsystems is still a market (and OIN) favorite and even
with this week's sell-off, the recent technical consolidation
pattern appears to be intact.  The price history exhibits a
relatively solid base of support near $80 and that will be our
target entry area for the position.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call APR 80   SUX DP  6113     11.75    77.00     7.4% ***

Sell Put  APR 70   SUX PN  3637      1.06    68.94    10.7% ***
Sell Put  APR 72.5 SUX PV  3440      1.44    71.06    13.2%
Sell Put  APR 75   SUX PO  3541      1.81    73.19    14.6%
Sell Put  APR 77.5 SUX PW  1618      2.44    75.06    17.4%
Sell Put  APR 80   SUX PP  5412      3.25    76.75    20.6%

Chart =

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