Prime Stock Advisory Letter for November 16th, 1998

For those of you who would like to contact me during the day I am also available on line through the AOL Instant Messenger service (It is available through AOL and as a Netscape Plug-In.).  My screen name is "ESN Fin".  I welcome and encourage you to use this method of communication.  I look forward to your use of the AOL Instant Messenger Service.  This is a FREE SERVICE.  You do not need to be an AOL Subscriber to use this service.  A free download of this service is available at www.newaol.com/aim
 

Today's Comments:  The overall market moved moderately higher on Friday.  The market has approached an overbought condition based upon our technical indicators.  The recent strong upward trendlines of the major market indices has been broken by the sideways movement over the last week.  My concerns are that as the market has reached a very high valuation and the incentives for it to move significantly higher are greatly reduced.  As the market moves away from an over sold condition our technical indicators can generate a "Sell Signal".  This is normally a very reliable indicator,  but it does occasionally give a false signal.  This occurs when the market retraces slightly and then resumes its move higher.  I have received several "Sell Signals" recently and my concern is that we may be receiving a false signal,  or the market may head lower.  The problem is that the direction of the market is not clear at this point in time.  My reason for bringing this up isn't to say that I do not know where the market is going but to explain why I have concern over the ability of the market to continue to move higher.     We received a "SELL SIGNAL" on the Amex Biotech Index 'BTK',  the Amex Pharm. Index 'DRG',  the Morgan Stanley High Tech Index 'MSH',  and the CBOE Technology Index 'TXX'.

Several times last week I recommended the shares of Greg Manning Auctions 'GMAI'.  I am raising my price targets on the shares of 'GMAI' to $30/share,  and if they close above that level then then they should move to $50.00/share.  Greg Manning will be interviewed Monday morning on CNBC's  Squawk Box.  The interview is scheduled between 8:00-10:00 am.  I do not know the exact time,  but it can be checked at www.cnbc.com/guests
 

Company:  Motorola, Inc.        Symbol: 'MOT'       Closing Price: $55.00/share.
YH: $67.69      YL: $38.375     EPS: ($1.46)      P/E: N/A      Forecasted EPS: $1.92
Dividend: $0.48   Yield:  0.08%     Ex Dividend: 12/11/1998
Price Target:  $59.375 & then $60.75     Downside Stop:  $53.125
Options Recommendation: November 55 Calls,  Symbol 'MOTKK' @ $1.125/contract.

Company Description: This company is a leading producer of semiconductors and communications products.

Recent News:  11/12  Lehman starts Motorola as an Outperform
11/10  Motorola,  AMP to market connectors for the automotive market.

Our Analysis: Motorola is a component of the Philadelphia Semiconductor Index 'SOX',  the Morgan Stanley Cyclical Index 'CYC',  the Morgan Stanley High Tech Index 'MSH',  the CBOE Technology Index 'TXX',  and the Amex Computer Tech. Index 'XCI'.  The shares of 'MOT' closed above a key upside resistance level on heavier than normal trading volume.  The shares should continue to move higher and test $59.375/share, an upside resistance point established in mid May of this year.  If the shares close above that level then they should continue to move higher and test $60.75/share an upside resistance point established in late March of this year.  Lehman Bros. recently upped its rating on 'MOT' to an "OUTPERFORM".
 

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