Prime Stock Advisory Letter for November 30th, 1998

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:  In a shortened trading session on Friday,  the overall stock market moved slightly higher.  There was across the board strength in the healthcare,  high tech, transportation, retail, commodity based, and brokerage indices.  There was weakness in the financial indices,  and the telecommunications indices were mixed.  All that pales with the recent moves upwards in the shares of anything related to the Internet.  Currently speculators/traders/investors are throwing money at anything that is involved in the Internet in hopes of finding the next Yahoo,  which they hope will be the next Microsoft.  There are several problems with this:  First,  most of the people trading these stocks do not understand the businesses of the companies whose shares they are trading;  and second,  many of these companies are approaching market capitalization's that many times in excess of what their business operations could hope to grow into to justify their current valuations.  This makes for some exciting and dangerous trading.  Fortunes can be made and lost very quickly.  If you are going to trade these issues I advise that you set stop levels to cut your losses and if possible hedge your positions with put options.  And most importantly do not become emotionally attached to them, for when the ride in them is over it is going to be a very quick stop but who really knows when that will happen.  Trades these stocks for what they are,  opportunities and be willing to move from one to another.  Do not marry them or you greatly increase your risk of getting burned.  From a fundamental perspective the overall market continues to be over valued.  From a technical perspective the market continues to look very positive.  The Bottom Line:  The market should move higher.

Company:   Computer Associates Int'l, Inc.      Symbol: 'CA'      Closing Price: $45.94/share.
YH: $61.94    YL: $26.00   EPS: $0.96     P/E: 47.8    Forecasted EPS: N/A
Dividend: $0.08    Yield:  0.01%     Ex Dividend: 6/17/98
Price Target:  $50.94 & then $57.00      Downside Stop:  $44.125
Options Recommendation: December 45 Calls,  Symbol 'CALI' @ $2.375/contract.

Company Description: This company is a major software company.

Recent News:  11/30  Legend Group in software JV with 'CA'
11/24  CS First Boston initiates coverage of 'CA' with a Buy Rating

Our Analysis:   Computer Associates 'CA' is a component of the CBOE Computer Software Index 'CWX',  the CBOE Technology Index 'TXX',  and the Amex Computer Technology Index 'XCI'.  I have rated all three of these indices as moving higher from their current levels.  The shares of 'CA' recently closed above a key upside resistance level.  The shares should continue to move higher and test $50.94/share,  a former point of downside support established in late May of this year.  If the shares close above that level then they should continue to move higher and test $57.00/share,  the point from which they gapped lower in late July of this year.  CS First Boston recently initiated research coverage on 'CA' with a "BUY" rating.

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