Prime Stock Advisory Letter for December 30th, 1998

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Today's Comments:  The overall market moderately higher yesterday.  There was strength in the healthcare, consumer, cyclical, transportation, telecommunications, retail, financial,  and commodity based indices.  There was what appeared to be profit taking in the biotech,  high tech,  and brokerage indices.  The overall market is in a broad based up trend.  The Dow Jones Industrial Average 'INDU' is now within 50 points of its all time closing high.  While the overall market has had a nice advance recently the Dow Jones Industrial Average  will need to confirm a break to new highs for this market rally to continue.  In order to confirm this I feel the Dow Jones Industrial Average will need to surpass its previous closing high of 9,374.27 and to be on the safe side it should close above 9,410.57  If the Dow Jones Industrial Average turns and moves lower before doing reaching these levels then the overall market could also follow it lower.  It is also important to remember that anything that is sold after January 1st does not need to have taxes paid on the profits until April 15th, 2000  With this in mind I would not be surprised to see a round of selling in early January to realize profits and delay the payment of taxes.  I am expecting to see a normal day of trading volume today and a light day as many people leave early for the New Year holiday.  The Bottom Line:  The overall market should move higher.  

Company:  SunTrust Banks, Inc.     Symbol: 'STI'    Closing Price: $79.00/share.
YH: $87.75     YL: $119.94    EPS: $3.46     P/E: 22.8      Forecasted EPS: $3.94
Dividend: $1.00      Yield: N/A      Ex Dividend: 11/27/98
Price Targets: $87.44  & $119.94        Downside Stop:  $77.375
Options Recommendation: January 75 Calls,  Symbol 'STIAO' @ $5.00/contract.

Company Description: This company is a major bank holding company located in the south eastern portion of the United States.

Recent News:  12/29  STI-Reiterate Strong Buy on Eve of Crestar Closing
12/15  Wheat First starts SunTrust Banks at an "Outperform"

Our Analysis: SunTrust Banks is a component of the S&P Banking Index 'BIX',  and the Philadelphia Banking Index 'BKX'.  I have rated both of these indices as moving higher from their current levels.  The shares of 'STI' closed above a key upside resistance level yesterday.  They should continue to move higher and test $87.44/share,  the point from which they gapped lower in mid July of this year.  If  they close above that level then they will have completed a cup pattern with a measured move to $119.94/share.  Yesterday Robinson Humphrey reiterated a "Strong Buy" rating on the shares of 'STI'

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