Sunday - Option Investor Newsletter 3 of 6 (calls)

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/27/99 04:02 PM ---------------------------

Enron Capital & Trade Resources Corp.

From: xtrials@optioninvestor.com (Option Investor Newsletter Trials)
01/24/99 06:19 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com<
cc: (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 3 of 6 (calls)

The Option Investor Newsletter 1-24-98
Sunday Part 3 of 6

Telecom
*******
SNC - Snyder Communications, Inc. $37.75 (+2.44)

Snyder Communications, Inc. designs develops and implements
innovative and value-added outsourced marketing services.
The company's marketing programs are designed to target
high-value customer segments through database management
services, proprietary product sampling, publications,
sponsored information display in prime locations, field sales
representatives, inbound and outbound teleservices and related
services. Snyder also provides proprietary distribution
channels, customer care and retention services. The company
has international operations in the United Kingdom, Ireland
and Hungary.

SNC is right at previous resistance. If it can break through
and hold above $38.00, it could have some room to really go.
SNC doesn't announce earnings until February 10th. In the past,
SNC has announced nice earnings surprises. The last seven
surprises have gone like this: +4%,9%,11%,6%,15%,33%,14%.
Earnings are figured to increase by 65% over the prior year
period.

Snyder Communications, Inc. announced on the 14th of January
that it has extended an earlier contract sales relationship
with Boehringer Ingelheim Pharmaceuticals, Inc. This latest
two year pharmaceutical sales contract builds upon earlier
agreements under which Snyder Healthcare Sales, a division
of Snyder Communications, has provided targeted national sales
support for Boehringer Ingelheim Pharmaceuticals since 1997.

BUY CALL FEB-35 SNC-BG OI= 522 at $4.38 SL=2.50 ITM $2.75
BUY CALL FEB-40 SNC-BH OI= 245 at $2.25 SL=1.13
BUY CALL MAR-35 SNC-CG OI= 286 at $5.50 SL=3.75 ITM $2.75
BUY CALL MAR-40*SNC-CH OI=2379 at $3.00 SL=1.50
BUY CALL MAR-45 SNC-CI OI= 33 at $ .94 SL=0.00

Picked on Jan.23rd at $37.75 PE =151
Change since picked +0.00 52 week low =$26.62
Analysts Ratings 5-0-0-0-0 52 week high=$54.18
Last earnings on 10-98 est=.25 actual=.26
Next earnings on 02-10 est=.28 versus=.17
Chart = http://quote.yahoo.com/q?s=SNC&;d=3m

Software - Sector
*****************
MSFT - Microsoft $156.25 (+6.50)(-0.13)(+11.19)(P6W +25.07)

From their own words, "Microsoft Rules." Although it's
current reign is being rocked with revolution, the Evil M-
pire (as some programmers and anti-Internet Explorer
browser patriots call it), has been fighting the Federal
government on anti-trust grounds for months. The line to
take their turn and bad mouth the bully was long and
distinguished. The fact is, MSFT is good at what they do.
They are the world's #1 software company (Y2K compliant or
not!) and their operating systems dominate the PC
landscape.

To those who closed their eyes and held their breath
through earnings, congratulations on a great play! If you
sold prior to the announcement you still did very well.
MSFT gave us blowout earnings of $0.73. The street's
whisper number was $0.64. See, no material effect on
earnings. Technical indicators are still positive, but a
pullback from its 1-day $13 spike after earnings should be
expected. MSFT may drift a bit during this period of
market turmoil. But be ready when the market firms, as
fund buyers have fresh cash to buy the big cap tech stocks.
MSFT will be their #1 target after its muscular
demonstration of earnings growth. This post-announcement
drift won't last and presents a buying opportunity. Rumors
are circulating that MSFT may still give us our previously
predicted split this coming week. It comes from a
reputable source in addition to the usual suspects, but
should still be treated as a rumor. We've also heard that
Microsoft's CFO, Greg Maffei, would rather wait to split
the stock until it reaches $200.

We will keep you apprised if it happens. In the meantime,
the trial goes on. MSFT's man took the stand today in the
company's defense. To wit, Dow Jones News quotes Mr.
Maritz, "Competitors such as International Business
Machines Corp., Apple Computer Inc. and Sun Microsystems
Inc., focus primarily upon selling their operating system
products as part of relatively expensive new computer
systems, necessarily limiting their sales volume, and
thereby reducing incentives for other software developers
to create applications that run on their operating system
products. Conversely, Microsoft provides a platform that
is compatible with a range of products, offers its product
at a low price and continually innovates. Ironically, the
very thing that makes Windows valuable to computer
manufacturers, software publishers and customers is now
under attack in this lawsuit." Well said.

BUY CALL FEB-150*MSQ-BJ OI=10063 at $11.13 SL= 8.75
BUY CALL FEB-155 MSQ-BU OI= 8146 at $ 7.88 SL= 6.25
BUY CALL FEB-160 MSQ-BX OI=10976 at $ 5.38 SL= 3.75
BUY CALL APR-160 MSQ-DX OI= 5301 at $11.75 SL= 9.25
BUY CALL JUL-165 MSQ-GW OI= 1854 at $15.13 SL=11.75

Picked on December 8th at $133.63 PE = 68
Change Since Picked +$ 22.62 52 Week High= 167.75
Analysts Ratings 14-8-5-0-0 52 Week Low = 67.75
Last Earnings 01-98 est. 0.58 actual .73 surprise 25.86%
Next Earnings 04-22 est. 0.60 versus .43
Chart = http://quote.yahoo.com/q?s=msft&;d=3m
*****

ORCL - Oracle Corporation $49.88 (+2.75)

Oracle is the leading developer of database management system
software, which lets multiple users and applications use the
same data at the same time. Its flagship database software
runs on everything from notebook computers to mainframes.
Oracle8, a faster, more flexible version of the firm's database
software, provides support for a system of network computers -
stripped-down, low-cost computer terminals operated through a
control server. Oracle also makes application development
productivity tools and computer-automated software engineering
products, among others.

ORCL gapped open on Tuesday in reaction to the IBM
announcement (see below). After setting a new 52 week high
early on Wednesday, it traded down for the rest of Wednesday and
Thursday on what looked like profit taking. It then bounced
nicely off of its 10 day moving average on Friday. Since late
November, ORCL has been getting a little ahead of its 10 day
moving average, then pulling back to it, all in a nice upward
trend. Last week this movement was a little exaggerated with
IBM announcement, but ORCL might be a good candidate for some
target shooting around its 10 dma.

In the news last week, ORCL announced that it is teaming up
with IBM to offer its software on IBM hardware. The offering
will be targeted at manufacturers and will be available
sometime during the 1st quarter. It will feature ORCL's
manufacturing and financial applications running on IBM's
Netfinity and RS/6000 servers. In other news, Morgan Stanley
raised their price target for ORCL to $58 and maintained its
outperform rating.

BUY CALL FEB-45 ORQ-BI OI=1759 at $6.25 SL=4.25
BUY CALL FEB-50*ORQ-BJ OI=5274 at $3.13 SL=1.50
BUY CALL FEB-55 ORQ-BK OI=2296 at $1.19 SL=0.00
BUY CALL MAR-55 ORQ-CK OI= 858 at $2.88 SL=1.25
BUY CALL JUN-55 ORQ-FK OI= 461 at $5.63 SL=3.75

Picked on Jan 24th at $49.88 PE = 37
Change since picked +0.00 52 week low =$18.19
Analysts Ratings 8-14-8-0-0 52 week high=$53.88
Last earnings 11-98 est=.24 actual=.28
Next earnings 03-12 est=.29 versus=.22
Chart = http://quote.yahoo.com/q?s=ORCL&;d=3m

Retail
******
WAG - Walgreen Co. $58.44 (+1.44)

Walgreen's is ranked #1 in the US among drugstore chains.
It has more than 2,600 freestanding stores located throughout
the US and Puerto Rico. They even have the infamous
"drive-through" service in case you're just too sick to go
into the store! On January 13th, they announced a 71% increase
in first quarter earnings above that of last year's Q1 report.
Prescription drugs account for almost half of their sales.
Over the counter medications and general merchandise ranging
from food an beverages to toiletries make up the other half.

A little over a week ago, Walgreen Co. reported strong first
quarter earnings and a 2:1 stock split scheduled for Feb. 12th.
We waited until WAG showed signs of a steady uptrend before
adding them as one of our plays. Walgreen's finished the week
up +$1.44 and held firm in the rocky market waters.
This could be the beginning of the split run.

No new news for Walgreen's this week.

BUY CALL FEB-55 WAG-BK OI=1015 at $4.75 SL=3.25
BUY CALL FEB-60 WAG-BL OI=1682 at $2.00 SL=1.00
BUY CALL APR-60 WAG-DL OI=1277 at $4.13 SL=2.50

Split play only

Chart = http://quote.yahoo.com/q?s=wag&;d=3m

Semiconductor
*************
PRIA -PRI Automation, Inc. $35.88 (+1.33)(+4.87)

PRIA designs, develops, manufactures, and markets factory
automation systems for the cleanroom manufacturing operations
of semi-conductor makers and OEM equipment suppliers. Last
year's $178.2 million in revenues reflects the big downturn
in the semi-conductor industry, but that is changing. The
1998 glut of chips has been depleted, and demand is strong
again for these products.

Although it hit a high of $37.50 in Feb, 1998, PRIA stock had
lost about 75% of its value by the time the market bottomed
in October. However, it has been climbing fairly steadily
ever since, except for a brief correction in December. With
the chip industry recovering, it follows that a company in
PRIA's business will benefit. This is a momentum play in an
improving industry.

PRIA is a quiet company, with little news. Earnings are due
out Jan. 28th.

BUY CALL FEB-30 UXQ-BF OI=186 at $7.38 SL=5.75
BUY CALL FEB-35*UXQ-BG OI=140 at $4.13 SL=2.50
BUY CALL MAR-40 UXQ-CH OI= 38 at $3.63 SL=1.75
BUY CALL MAY-35 UXQ-CG OI= 35 at $7.38 SL=5.50
(No volume on MAY-40s yet).

Picked on Jan 17th at $34.50 P/E=n/a
Change since picked $ 1.33 52 week low = 9.56
Analysts' ratings 1-5-4-0-0 52 week high=37.50
Last earnings 9/98 act=-$.20 est=-.08 surprise=-150%
Next earnings 1/28 est=-$.25 versus $.31
Chart = http://quote.yahoo.com/q?s=PRIA&;d=3m
*****

MU - Micron Technology $70.50 (-.81)(+7.68)

Micron Technology makes semi-conductor memory products, PCs,
circuit boards, memory modules, and system level assemblies,
and has a market capitalization of $17.6 billion. Revenues
for MU declined last year due to lower selling prices of PCs
and semi-conductor products. This was a result of too much
product industry wide and too little demand, but the company
is recovering now, as demand increases.

An overabundance of chips sent prices down from $200 a year
ago to below $60 in May, but they have recovered to near $90
now, as the surplus has dried up. A decreasing supply is
partly the cause. The Koreans, for instance, have been
cutting production. But the demand for chips is also
increasing because sales of PCs are on the rise. PC maker
Gateway reported strong earnings on Thursday after the bell.
Intel, the semi-conductor sector heavy-weight, showed a 12%
earnings surprise in its just-ended quarter. Micron's quarter
doesn't end until February, but it appears to be doing well.

Analyst Gregory Mishou, at Warburg Dillon Read, upped his
1999 earnings forecast to $.12 from a LOSS of $.11, and
raised his 2000 estimate to $2.31 from $1.95. He believes MU
could trade up into the mid-90s in this market. After hitting
a new high of $78.25 on Wednesday, MU pulled back with the
rest of the market. It was up slightly on Friday, however. If
the stock continues to move up on Monday, this may be an
opportunity to move into options on MU.

BUY CALL FEB-70*MU-BN OI=2046 at $5.00 SL=3.25
BUY CALL FEB-75 MU-BO OI=1616 at $3.25 SL=1.50
BUY CALL MAR-70 MU-CN OI= 116 at $7.50 SL=5.75
BUY CALL MAR-75 MU-CO OI= 169 at $5.63 SL=3.75
BUY CALL APR-70 MU-DN OI=3199 at $9.13 SL=6.75
BUY CALL APR-75 MU-DO OI= 671 at $7.25 SL=5.50

Picked on Jan. 17TH at $71.31 P/E = n/a
Change since picked -$ .81 52 week low =20.06
Analysts' ratings 10-3-7-0-1 52 week high=78.25
Last earnings 11/98 act.=-.19 surprise=39%
Next earnings 3-22 est.=-.09 versus -.41
Chart = http://quote.yahoo.com/q?s=MU&;d=3m
*****

XLNX - Xilinx, Inc. $78.19 (+5.31)

Xilinx is one of the top makers of field-programmable gate
arrays (FPGAs) and complex programmable logic devices (CPLDs),
integrated circuits that customers can program to perform
specific functions. The company also provides the software
necessary for programming its chips. Xilinx's chips are used
by electronics makers in the telecommunications, data
processing, industrial and medical instrumentation, military
and aerospace, and networking markets. The company minimizes
its overhead by contracting out its chip manufacturing to
companies in Asia. About a quarter of Xilinx's sales are in
Europe. Main rival Altera has a nearly equal market share.

XLNX had an interesting week. On the 20th, XLNX announced
record earnings along with a 2:1 stock split in March. This
pushed the shares as high as $87.63 on the 20th. The last two
trading days saw a little bit of profit taking. It looks like
XLNX might fill the gap open it made on the 20th and start a new
run. A good risk reward ratio would be a bounce off the gap on
the 20th. This is at the $75.00 range. XLNX might also just
turn and go up if the NASDAQ continues its record move up.
(the split is set for March 11th)

On the 20th, six different analysts upgraded XLNX. This is a
very good sign for the future. These analysts would have
downgraded the stock if they thought the stock was to highly
valued already. XLNX noted in their earnings report that
revenue from telecommunications companies increased substantially.
This is a good sign. The telecoms are a fast growing industry
and this should help XLNX's future earnings.

BUY CALL FEB-75*XLQ-BO OI=1365 at $ 7.88 SL= 6.00 ITM $3.19
BUY CALL FEB-80 XLQ-BP OI= 12 at $ 5.38 SL= 3.25 low OI
BUY CALL MAR-75 XLQ-CO OI= 242 at $10.00 SL= 7.50
BUY CALL MAR-80 XLQ-CP OI= 73 at $14.25 SL=11.25
BUY CALL MAR-85 XLQ-CQ OI= 104 at $ 5.38 SL= 3.50

Picked on Jan.23rd at $78.19 PE = 48
Change since picked +0.00 52 week low =$ 9.25
Analysts Ratings 8-10-4-0-0 52 week high=$87.63
Last earnings on 01-99 est=.40 actual=.45
Next earnings on 04-19 est=.47 versus=.39
Chart = http://quote.yahoo.com/q?s=XLNX&;d=3m

Electronics/Peripherals/Hardware
********************************
LXK - Lexmark Intl $99.25 (+1.19)(-2.50)(+.06)(+7.25)(+1.31)

Lexmark has good peripheral vision. Lexmark International
Group is a leading maker of computer printers and related
products, which generate more than 80% of its sales. Its
printer line includes laser printers (designed primarily
for corporate networks and desktops) and ink-jet printers
(for home and business use). Unlike many of its competitors,
Lexmark develops and manufactures it's own printers, which
results in fast product cycle times. The company also makes
supplies for IBM and other name brand printers and typewriters.
Lexmark's products are sold in more than 15,000 retail outlets
in more than 150 countries.

LXK held up pretty decent this week, considering the market.
LXK has it's earnings announcement before market on Monday (25th).
This has been confirmed with investor relations. LXK is sitting
right on its 20-dma for the 2nd week in a row. For those looking
to get in on the split, wait for a pullback after the gap
open. If LXK disappoints, we feel its time will come to an end.
This earnings season has been disastrous for many companies that
seemed to have announced good earnings.

LXK news has been non existent for the last week. In general,
the technology sector has held up. LXK has held up slightly
better than its industry. It all depends on the announcement
Monday.

BUY CALL FEB- 95 LXK-BS OI= 87 at $ 9.38 SL=6.75 ITM $4.25
BUY CALL FEB-100*LXK-BT OI=672 at $ 7.13 SL=4.75
BUY CALL FEB-105 LXK-BA OI=296 at $ 5.00 SL=3.25
BUY CALL MAR-100 LXK-CT OI= 16 at $ 9.75 SL=7.00
BUY CALL APR-105 LXK-DA OI= 82 at $ 9.63 SL=7.00

Picked on Dec 15th at $88.38 P/E = 34
Change since picked: +10.87 52 week low =$ 33.63
Analysts' ratings 1-4-1-0-0 52 week high=$106.25
Last earnings 10-98 est= $ .79 actual= $.81
Next earnings 01-25 est= $1.09 prior = $.78
Chart = http://quote.yahoo.com/q?s=LXK&;d=3m
*****

EMC - EMC Corporation $98.50 (-1.56)(+6.50)(+8.56)(+3.38)

EMC is a Fortune 500 company that designs, manufactures,
markets an supports high performance storage products. The
company's products store retrieve, manage, protect and share
information from all major computing environments, including
UNIX, Windows NT and mainframe platforms. EMC markets its
memory products under the name Symmetrix. EMC and its
enterprise storage systems have developed a clear cut
technological edge over its competition. The company has been
able to successfully leverage its leadership position in the
mainframe storage area into the lucrative, faster growing open
systems market.

In the news last week, Staples, the world's largest operator of
office superstores, announced that they have standardized their
data storage needs on an EMC system. The reasons they gave
were to more effectively manage rapid business growth, reduce
information management costs, and improve customer service.
Also, there was an interesting article at MSN MoneyCentral
comparing EMC and its rival NTAP. An observation by the
article was that every bit of new e-mail, every sale over the
Internet, and every extra page view increases the need to build
more storage into the Internet. It also pointed out that EMC
has just begun selling software to its customer base. Software
sales are expected to grow from $400 million in 1998 to $1
billion by 2001.

Last week was EMC's first losing week in the last 5 weeks.
Then again, the techs were under some heavy selling pressure
last week. EMC set a new 52 week high on Wednesday, and then
traded down. There was a scary gap down at the open on Friday,
but EMC recovered nicely. EMC reports earnings before the
open on 1/26, and as we indicated last week, we don't believe
there will be a split announcement with earnings. After
further research, EMC does not have enough shares authorized
and their next shareholders meeting is not expected until
April. Also, please note that the option root on some EMC
options has changed.

BUY CALL FEB- 95 EMB-BS OI=1274 at $11.00, SL= 8.75
BUY CALL FEB-100*EMB-BT OI=6119 at $ 7.63, SL= 5.75
BUY CALL MAR-100 EMB-CT OI= 333 at $11.88, SL= 9.50
BUY CALL APR-100 EMB-DT OI=2917 at $13.88, SL=11.25

Picked on Nov 8th at $69.06 PE=58
Change since picked +29.44 52 week low =$ 23.50
Analysts Ratings 10-4-0-0-0 52 week high=$107.13
Last earnings 9-98 est=.36 actual=.38
Next earnings 1-26 est=.46 versus=.32
Chart = http://quote.yahoo.com/q?s=EMC&;d=3m
*****

XIRC - Xircom Inc. $42.00 (+2.12)(+1.38)(+4.50)(+1.25)

Xircom makes adapters that connect portable PCs to corporate
networks, the Internet, and commercial online services. The
company's products include adapter/modem cards (CreditCard
Ethernet+Modem), network adapters for portable PCs (Pocket
Ethernet Adapter, Pocket Token Ring Adapter), and modem-only
PC cards (CreditCard Modem). Xircom sells its products to
original equipment manufacturers and through a worldwide
network of distributors, value-added resellers, and computer
retailers. Over half of its income is from foreign sales.
Intel owns 11% of Xircom; chairman and CEO Dirk Gates owns
about 5%.

XIRC announced earnings on the 19th of January that were $.05
above consensus estimates and a penny ahead of the whisper.
On the 20th, XIRC traded as high as $44.50. We feel when the
market resumes its bullish stance, XIRC will be a strong
mover. XIRC bounced off its 10-dma Friday for the 3rd time in
5 days. A close right on the high of the day on Friday also
shows some internal strength.

No recent news on XIRC. Here are some of the actual figures
announced with XIRC earnings. Net sales increased 83% over
the prior year period. Net income increase 354%, to $.39
from $.11. The RealPort family of Integrated PC Cards now
accounts for about 40% of revenues. Pretty impressive.

BUY CALL FEB-40*XQR-BH OI=529 at $4.38 SL=2.50 ITM $2.00
BUY CALL FEB-45 XQR-BI OI=139 at $2.25 SL=1.13
BUY CALL MAR-40 XQR-CH OI=189 at $5.88 SL=3.75 ITM $2.00
BUY CALL JUN-40 XQR-FH OI= 60 at $8.62 SL=6.50

Picked on Jan.9th at $38.50 PE = 28
Change since picked +3.50 52 week low =$ 9.25
Analysts Ratings 4-2-1-0-0 52 week high=$44.50
Last earnings on 01-99 est=.11 actual=.39
Next earnings on 04-21 est=.36 versus=.14
Chart = http://quote.yahoo.com/q?s=XIRC&;d=3m
*****

SUNW - Sun Microsystems $98.00 (-2.44)(+9.56)(+5.25)(+2.32)

UltraSPARCs, Netra servers, SPARCstations, and Solaris (for
Unix) are all products of Sun Microsystems. Sun is also the
creator of the Java computer language. They are also the
recent partners with AOL in the Netscape merger.

This past Wednesday, SUN traded as high as $115.75. But
severe profit taking and differing opinions drove the stock
to as low as $96.44 before their earnings announcement on
Thursday. Even after announcing positive earnings, a 22%
increase in revenues, and a 2:1 stock split, SUNW's stock
wasn't able to recover. Sun had actually attempted to shrug
off all of the profit takers and reached $100.25 in intraday
trading on Friday. But, it then lost those gains and closed
down -$0.25. Maybe the unstable market contributed to the
drop. Maybe it had to do with BancBoston Robertson Stephens
downgrading the stock stating a drop-off in bookings, backlogs,
more competition, and revenue reports that weren't up to par
with their expectations. However, S&P rated them an
accumulate and Morgan Stanley Dean Witter rated them a strong
buy. They were happy with the "sharp rise" in earnings which
were in line with their expectations and the positive future
outlook of the company. In any case, we would like to see the
market and Sun Microsystems turn around before initiating any
new plays on the split news. Friday's lack of any serious
profit-taking on top of Thursday's action and earnings
report is an encouraging sign.

Other News: SUN will officially unveil their Jini technology
on Monday. Excitement is building over the possibilities of
networking electronic devices by using the new language.
Eight companies, including Sony and Sharp, will collaborate
with SUN to develop the ability for HAVi compliant devices to
use the new Jini.

BUY CALL FEB- 95 SUQ-BS OI=5157 at $ 9.13 SL= 6.75
BUY CALL FEB-100 SUQ-BT OI=8740 at $ 6.50 SL= 4.75
BUY CALL MAR- 95 SUQ-CS OI= 255 at $12.25 SL= 9.50
BUY CALL MAR-100 SUQ-CT OI=1178 at $ 9.63 SL= 7.25
BUY CALL APR- 95 SUQ-DS OI=2041 at $14.25 SL=11.25
BUY CALL APR-100 SUQ-DT OI=3070 at $11.88 SL= 9.50

Momentum Play

Chart = http://quote.yahoo.com/q?s=sunw&;d=3m

*****

PLAYS CONTINUED IN SECTION FOUR.

*****
DISCLAIMER
*****
This newsletter is a publication dedicated to the education
of options traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in
options. It is possible at this or some subsequent date, the
editor and staff of The Option Investor Newsletter may own,
buy or sell securities presented. All investors should consult
a qualified professional before trading in any security. The
information provided has been obtained from sources deemed
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely
information to its subscribers but cannot guarantee specific
delivery times due to factors beyond our control.