Prime Stock Advisory Letter for November 10th, 1998

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Position Statement: In our Prime Recommendation Letter we attempt to identify the recommendation with the highest probability of moving higher.  We recommend that stop orders be placed at the time of purchase,  and once the position has moved profitable we recommend a stop be placed a minimum of 3/8th above the purchase price and moved higher as the position moves higher.

Today's Comments:  The overall market moved moderately lower yesterday.  There was weakness in the healthcare, consumer, cyclical, transportation, financial, and commodity based indices.  There appeared to be minor profit taking in the retail, and telecommunications indices.  There was strength in the biotech, and the high tech indices,  in particular the strongest stocks where the Internet issues.  These stocks benefited from an announcement by Broadcom 'BRCM' about the development of a chip that will allow the Internet pages and television to be combined on the same screen and by several positive Internet commerce announcements.  There are concerns that the Fed will not lower interest rates at its next meeting.  This is weighing on the market.  I received a "SELL SIGNAL" on the Philadelphia Airline Index 'PLN',  the S&P Transportation Index 'TRX',  and the Amex Natural Gas Index 'XNG'.  Evan with these down grades of these sector indices the trend of the overall market remain higher.  The overall market is in an over bought condition but that does not indicate that the market will move lower any time soon. The Bottom Line:  The market should move higher.
 
 

Company:  Dell Computer Corp.     Symbol: 'DELL'       Closing Price: $69.00/share.
YH: $69.25       YL: $17.50    EPS: $0.83     P/E: 83.1     Forecasted EPS: $1.43
Dividend: N/A     Yield:  N/A     Ex Dividend: N/A
Price Target:  $87.69      Downside Stop:  $65.875
Options Recommendation: November 65 Calls,  Symbol 'DLQKM' @ $6.125/contract.

Company Description: This company is the leading direct retailer of personal computers and servers.

Recent News:  11/9  Dell to provide customers preinstalled Oracle products
11/09  Online shoppers expected to triple this holiday season
11/05  Dell cuts prices on corporate notebooks and desktops.

Our Analysis: The shares of 'DELL' set a new closing high yesterday.  In the process they completed a cup pattern with a measured move to $87.69/share.  The shares of 'DELL' benefited from the move higher in the Internet shares due mainly to the expectations that sales of items over the Internet are expected to more than triple this holiday season.
 

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