Prime Stock Advisory Letter for January 11th, 1999

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Today's Comments:  The overall market moved sharply higher on Friday.   It was a broad based rally that affected most of the sector indices I track.  There was strength in the Consumer,  High Tech, Cyclical, Gaming, Transportation,  Telecom, Financial,  and commodity based indices.  There was weakness in the Healthcare related, and Retail Indices.  From a technical perspective the market looks very strong.  I have published my new upside targets for the major market indices.  I am expecting the S&P 100 'OEX' to move higher to 691.46,  the S&P 500 'SPX' to move towards 1,416.22  the NASDAQ Composite 'COMPQ' to move to 2,609.38  and the Dow Jones Industrial Average 'INDU' to move to 10,052.94 and then 11,136.87  These are all closing target levels on these indices.  From a fundamental standpoint the valuation on the S&P 500 'SPX' remains at a lofty 33.48 times earnings. But then again it's all fundamentals.com that matter,  not Graham & Dodd.  The Internet continues to be the Hot sector of the market.  It is very important to realize that there is a tremendous amount of risk with these issues.  Broadcast.com 'BCST' was up approx. $97/share on Friday, when NASDAQ halted trading in the company's shares requesting comments on the strong run up in their price.  The price of the shares was approximately $227/share when the trading was halted.  When the shares reopened for trading the price had dropped to $185/share.  It eventually rallied back higher.  But this does demonstrate the risk associated with the Internet issues.  The Bottom Line:  The market should move higher.

Company:  Renal Care Group, Inc.     Symbol: 'RCGI'         Closing Price: $30.625/share.
YH: $30.875      YL: $118.00     EPS: $0.74     P/E: 41.2     Forecasted EPS: $1.43
Dividend: N/A       Yield:  N/A            Ex Dividend: N/A
Price Targets: $33.61 & $40.67        Downside Stop:  $29.125
Options Recommendation: January 25 Calls,  Symbol 'NUQAE' @ $5.75/contract.

Company Description: This company treats patients with Kidney disease.

Recent News:  1/07  Pacific Growth Equities initiates coverage with a Buy Rating.
12/10  Piper Jaffray initiates coverage of 'RCGI' with a Buy Rating.

Our Analysis: The shares of 'RCGI' gapped higher on the open of trading on Friday.  In the process they closed above a key support level on heavier than normal trading volume.  In the process they completed a series of "Cup Patterns" with measured moves to our stated price targets.  Last week Pacific Growth Equities initiated research coverage of 'RCGI' with a "Strong Buy" rating.