Prime Stock Advisory Letter for December 15th, 1998

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Today's Comments:   The overall market moved sharply lower yesterday in a broad based sell off that affected almost every sector index that I track.  In fact the only indices to move higher where the chemicals and forest & papers products indices.  From a technical perspective the major market indices are clearly in downward trends as are most of the individual sector indices I track.  From a fundamental standpoint the market is at a very high historic valuation,  and with declining corporate earnings the market should move lower towards a more realistic valuation level.  The impeachment proceedings in the House of Representatives is generating uncertainty towards our political system.  This is putting negative pressure on the market.  A very notable item about yesterday's trading was that for the first time in a while the high tech issues sold off.  This is worth mentioning because until now the high tech issues had been the strongest portion of the market.  The Bottom Line:  The market should move lower.

Company:   Advanced Micro Devices        Symbol: 'AMD'    Closing Price: $28.56/share.
YH: $32.75    YL: $12.75       EPS: ($.097)     P/E: N/A     Forecasted EPS: $0.99
Dividend: N/A      Yield:  N/A        Ex Dividend: N/A
Price Targets:  $25.625 & then $23.46        Upside Stop:  $30.375
Options Recommendation: December 30 Puts,  Symbol 'AMDXF' @ $2.00/contract.

Company Description: This company is a major producer of computer chips.

Recent News:  12/10  Tech stocks down as the market lookspast Christmas towards earnings.

Our Analysis: 'AMD' is a component of the Philadelphia Semiconductor Index 'SOX',  the CBOE Technology Index 'TXX',  and the Amex Computer Technology Index 'XCI'.  I have rated all three of these indices as moving lower from their current levels.  The shares of 'AMD' gapped lower on the open of trading yesterday.  They finished the day by closing below a key support level.  The shares should continue to move lower and test $25.625/share,  the point from which they gapped higher in late November of this year.  If they close below that level then they should continue to move lower and test $23.46/share,  the point from which they gapped higher in early November of this year.

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