Prime Stock Advisory Letter for December 29th, 1998

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Today's Comments:  The overall market finished yesterday essentially unchanged with the Dow Jones Industrial Average 'INDU' finishing slightly higher and the S&P 500 'SPX' finished slightly lower.  There was strength in the Biotech,  Healthcare,  High Tech, Telecom,  Brokerage, and Forest & Paper Products Indices.  There was weakness in the Consumer,  Gaming, Transportation,  Retail, and Financial indices.  Trading volume was lighter than normal due to the holidays.  I am expecting trading volume to be lighter than normal for the remainder of the week.  The Internet sector continues to remain the "Hot Spot" of the market with any company that is even suspected of announcing intentions of new Internet activity seeing its shares soar to new heights.  Caution is advised with these issues as there can be huge disparities in valuations.  I am expecting the market to continue to work its way higher during the end of the year.  The Bottom Line:  The overall market should move higher. 

Company:  Hewlett-Packard Co.     Symbol: 'HWP'    Closing Price: $65.875/share.
YH: $82.375       YL: $47.0625 EPS: $2.77       P/E: 24.9       Forecasted EPS: $3.83
Dividend: $0.64        Yield: 0.92%          Ex Dividend: 12/21/98
Price Targets: $81.625  & $114.0625        Downside Stop:  $65.875
Options Recommendation: January 65 Calls,  Symbol 'HWPAN' @ $5.125/contract.

Company Description: This company is a major producer of computers and communications equipment.

Recent News:  12/23  HWP is playing serious catch up in Internet Sales
12/23  Prodigy,  HWP form Internet pact
12/22  3Com,  HWP in network card, modem pact

Our Analysis: The shares of 'HWP' moved higher yesterday.  they have been in an upward trend recently that should allow them to continue to move higher and test $81.625/share,  the point from which they gapped lower in mid May of this year.  If they close above that level then they will have completed a cup pattern with a measured move to $114.0625/share.  A recent Wall Street Journal article discussed Hewlett-Packards plans to aggressively expand its Internet sales.

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