Prime Stock Advisory Letter for December 2nd, 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:  The overall market staged a late day rally to finish in positive territory,  just barely.  The surprising rally in the high tech issues is worth some note.  How ever experience has taught me that the move lower earlier in the day is more significant than the late day rally.  This should still hold true for all non high tech issues.  The recent infatuation with high tech and Internet issues in particular has made them slightly more difficult to predict.  Due to the recent volatility in these issues several brokerage firms have raised the margin requirements on these issues.  If other brokerage firms follow their lead this could cause a substantial pullback in these issues.  Right now the market appears to be over extended and need of correction.  The Bottom Line:  The market should move lower.

Company:   Honeywell, Inc.       Symbol: 'HON'       Closing Price: $78.56/share.
YH: $96.375      YL: $58.625       EPS: $4.25      P/E: 18.4     Forecasted EPS: N/A
Dividend: $1.16     Yield:  0.14%     Ex Dividend: 11/24/98
Price Targets:  $69.125 & then $62.875       Upside Stop:  $82.625
Options Recommendation: December 80 Puts,  Symbol 'BAXP'

Company Description: This company is a major automated control systems.

Recent News:  11/09  Honeywell cuts cost due to more difficult economic environment.

Our Analysis: The shares of Honeywell closed below a key support level yesterday.  They should continue to move lower and test 69.125/share,  the point from which they gapped higher in mid October of this year.  If they close below that level then they should continue to move lower and test $62.875/share,  a point of support established in late August of this year.

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