Prime Stock Advisory Letter for November 4th, 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 finished yesterday essentially unchanged.  The main reason for this is the uncertainty over the results of the elections in this country.  I am not quite sure what expectations the "Market" had built in concerning the election.  My best estimate is that the consensus was for slight Republican gains to maintain the status quo.  As I right this newsletter it appears that the results for the Republicans will be slightly disappointing.  To be totally honest I am unsure as to how the "Market" will react to the election results.  My thoughts are that it will probably not make any dramatic moves just yet.  But then again I could be wrong.   A trend remains in place until it is broken,  and the current trend of the market is higher.  The Bottom Line:  The overall market should move higher.

The morning futures are 11 point highers.  It appears to me that the "Market" was looking for the status quo to be maintained and result in a lack of change in the political climate.  Look for a sharply higher open to the market.

Company:  Total Renal Care Holdings  .      Symbol: 'TRL'       Closing Price: $26.625/share.
YH: $36.125    YL: $18.875     EPS: $0.08      P/E: 332.8         Forecasted EPS: $1.75
Dividend: N/A       Yield:  N/A      Ex Dividend: N/A
Price Target:  $28.125 & then $29.625                      Downside Stop:  $24.625
Options Recommendation: November 22 1/2 Calls,  Symbol 'TRLKX' @ $4.375/contract.

Company Description: This company provides medical services to patients suffering from kidney difficulties.

Recent News:  11/03  Total Renal Care 3rd qtr net income $0.35 vs $0.18/share.
10/26  Total Renal Care,  California firm sign long term pact.
10/06  Wheat First starts Total Renal Care at "BUY" rating.

Our Analysis: The shares of 'TRL' gapped higher on the open of trading yesterday.  They finished the day with heavier than normal trading volume.  In the process they closed above a key upside resistance level.  The shares should continue to move higher and test $28.125/share,  an upside resistance point established in mid September of this year.  If the shares can close above that level then they should continue to move higher and test $29.625/share,  the point from which they gapped lower in early August of this year.  Yesterday the company announced its 3rd qtr. earnings.  The company earned $0.35/share vs. $0.18/share in the 3rd qtr a year ago.  The company stated it was positioned for extraordinary growth in 1999.
 

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