Prime Stock Advisory Letter for December 23rd, 1998

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Today's Comments:  The overall market moved slightly higher yesterday.  There was strength in the healthcare,  retail, and brokerage indices.  There was profit taking in the high tech issues.  Weakness was seen in the transportation, commodity based, and financial indices.  After the close of trading Standard & Poors announced it was adding America Online to the S&P 500 'SPX'.  America Online was up several points in aftermarket trading.  I currently believe an accurate reading on the direction of the market is more difficult than normal.  This is due to several factors including quarterly "Window Dressing",  year end tax selling,  and the fact that this is normally the time in which most market professionals take time off for the holidays.  This creates the potential for very unpredictable movements in the market and the potential for these movements to correct themselves after the start of the new year.  It is not a bad idea to follow the lead of the market professionals and take some time off from trading.  How ever if you want to these are the stocks I am recommending for today.

Company: Walgreen Co.     Symbol: 'WAG'    Closing Price: $59.25/share.
YH: $59.25     YL: $28.00     EPS: $1.07      P/E: 55.3      Forecasted EPS: $1.39
Dividend: $0.26      Yield:  0.43%        Ex Dividend: 11/12/98
Price Targets:  $64.50+        Downside Stop:  $57.375
Options Recommendation: January 55 Calls,  Symbol 'WAGAK' @ $4.75/share.

Company Description: This company is a major drug store chain.

Recent News:  12/11  Drug Stores:  Positive Psychology
12/02  Walgreen reports better than expected same store sales.

Our Analysis: Walgreen  is a component of the S&P Retail Index 'RLX', which I have rated as moving higher from its current levels.  The shares of 'WAG' set a new closing high yesterday.  They are currently in a strong upward trend that should easily carry them another $5+ higher.  The company recently reported better than expected same store sales,  which should help increase its earnings and further attract investors to this stock.

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