---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on 
02/01/99 10:35 AM ---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)     
                       01/28/99 08:59 PM
	

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Thursday Option Investor Newsletter 2 of 2



The Option Investor Newsletter         Thursday  1-28-99
Copyright 1999, All rights reserved.
Redistribution in any form strictly prohibited.


PICK NEWS - CALLS (continued)
*******************************************************

SUNW $109.31 +3.88 (+11.31) SUNW is having an incredible week.
On Monday and Tuesday it jumped $8.62.  Profit taking and
weakened markets set Sun back only -$1.19 on Wednesday.  On
Thursday, SUN heated up again and added $3.88 to finish just
off its high for the day.  Merrill Lynch raised its price
target to $130 and maintained its buy rating on the company.
In the news recently, Sun Microsystems, Lucent, Cisco, and
Network Associates have joined forces to form the Security
Research Alliance.  This Alliance will be committed to
helping organizations increase the security of their
desktops and networks.   Look for SUNW to head higher if
the markets can stay the color of money.

VIA.B $85.00 +2.13 (+2.44)  After profit taking took its toll
on the stock on Tuesday, VIA.B turned it right around.  It has
steam rolled ahead another +$2.88 since Wednesday.  Some more
articles have surfaced on the topic of VIA.B's earnings due
on February 25th.  The consensus seems to be that they will
be better than last year's loss of 29 cents a share.  One of
SG Cowen & Co's analysts thinks they could come in at +0.16
a share.  Some of Viacom's productions have been popular with
viewers.  The movie "Varsity Blues" and the TV programs
"Becker" and "Dilbert" are all getting nice ratings.  Watch
for VIA.B to keep up its forward progress.

WAG $60.25 +1.13 (+1.81)  WAG took advantage of the volatility
in the markets on Thursday and added +$1.31.  Walgreen's is
looking good and if the markets can positive, look for WAG's
uptrend to continue.  It is splitting it's stock 2:1 on
Feb. 12th.

LXK $110.31 +1.00 (+11.06) LXK continues to be a strong
performer.  A gain of $1.00 today in a good market is one
thing, but a gain of $1.13 on Wednesday was very impressive.
For the last three trading days LXK has reached an intraday
high.  The new high is now $111.88.  We still see a stock
split in LXK's future, but at this time a probable date is
not known.  Most likely an announcement would come as a
result of a special board of directors meeting.  We'll keep
you updated.

VOD $197.63 +4.00 (+10.25) VOD had a great day on Thursday.
For the 4th time in 5 days, VOD closed at its high of the
day.  The merger between ATI and VOD is still a go and to
insure the tax-free status of the merger, ATI has filed for
a private-letter ruling.  This is a ruling the IRS gives
ATI to insure the tax-free status of the merger.  Both
companies feel that even if a private letter ruling isn't
given in the positive, they can achieve the status they
desire.  This issue has been part of the cause for the
discrepancy of the offer and the current prices.

XIRC $45.00 +1.13 (+3.00) XIRC continues to move upward.  One
bullish sign on Thursday was the push and hold above the
prior high of $44.50.  We are in new high territory and see
no reason, other than profit taking, that should keep this
stock from heading higher.  No recent news on XIRC, but
the stock has outperformed the communications industry at
a nice margin over the last couple of weeks.  XIRC's PE
ratio is also lower than the industry average.

SNC $40.25 +.69 (+2.50) SNC continued to rise today, reaching
an intraday high of $40.63.  SNC is still $12 below its 52-
week high.  With a PE ratio below the industry average, SNC
still has room to move toward prior highs.  Earnings are in
a few weeks and, market permitting, should see an earnings
run.  The last 7 earning surprises have been: 4,9,11,6,15,33,
and 14%.

XLNX $83.50 +3.69 (+5.32) XLNX has been on a yo-yo the last
week or so.  The bottom line is that XLNX is yo-yoing its way
up.  On Wednesday, XLNX fell just under $3, but came back
strong with a gain of $3.69 on Thursday.  Even with all the
day up and day down movement, XLNX is still up over $5 on the
week.  With the stock split not until March, we are likely
to see times of consolidation.  This most likely occur when
the NASDAQ itself decides to rest.  Watch for pullbacks.
XLNX's CEO did state that the past quarter earnings did exceed
expectations.  This should lead to a nice continued uptrend.


PICK NEWS - PUTS
*******************************************************

AMR - $54.50 1.25 (-.75) Airline Index (XAL) still trading
below 50 day-moving average. Stock up fractionally after
selling off over the last several days. Stock trading at
lower end of consolidation range of $50-70. Airlines still
under pressure.

AXP - $100.50 1.00 (2.00) Stock trading at failed rally
range of $100-105. Anticipate that stock will roll over and
trade below 50 day moving average after failing twice with a
double top (lower high) at $110.

AVP - $35.63 -1.00 (-2.00) Stock still trading under
50-day moving average and soon to re-test key $35 support.

AVT - $44.75 .50 (.00) Stock still trading below declining
50-day moving average and below key price point of $45.
Tighten protective stop loss from $48 to 47.

BAC - $64.88 2.75 (-.25) The financial sector still under
pressure because of Brazil. Stock finally showed weakness
on 1/27 but regained slightly on 1/28. Recommend staying
with position while BAC stays below $65.

BDX - $35.25 -.25 (2.50) Stocks relief rally fail just shy
of our $38 protective stop loss. Fridays (1/22) precipitous
sell-off continues to stay in tact. Stock still trading
below 50-day moving average.  Maintain protective stop
loss - $38.

BKB - $36.25 .75 (-1.25) Stock still trading below its
declining 50-day moving average and financial sector
continues to show weakness. Banking index (BIX) trading
below key price point of 650.

CPB $47.00 .88 (2.75) Stock continues to consolidate under
considerable overhead. Tighten protective stop to $48.

DD - $52.50 -.50 (-1.75) Stock still below declining moving
averages and trading just below near-term support level of
$54. Move protective sell stop to $54.25.

PG - $87.75 1.50 (2.50) Stock still trading below 50-day
moving average and top side overhead at $90

PHSYB - $70.38 1.50 (2.25) Stock trading below 50-day
moving and key price point of $75.


******************
NEW CALL PLAYS
******************

CLX  Clorox Co. $121.69 +2.50 (+7.31 for the week so far)

Clorox Company manufactures non-durable consumer products.
Brands include Clorox Bleach, Kingsford Charcoal, Formula
409, Pine-Sol, Combat ant & roach killers and Hidden Valley
Ranch salad dressings. Products are sold primarily through
grocery stores and other retail outlets. The company supplies
products to the food service industry. The company's products
are sold in over 90 countries in addition to the United States.

CLX has been on a nice roll since its earnings announcement
on the 19th of January.  A bullish sign was the strong move
above prior resistance at the $117.  CLX today announced that
it's buyout and merger with First Brands has been approved by
First Brands shareholders and will officially take place on
Friday the 29th.  This news went over well with CLX investors
as CLX traded as high as $124.38.  Profit taking could take
place on Friday, but pullbacks could be nice buying
opportunities.

The major news dealing with CLX of late has been the earnings
announcement and the merger with First Brands.  CLX also
announced recently a $.36 dividend.  CLX is a large company
with close to 6000 employees.  CLX is part of the S&P 400
Mid-Cap index.

BUY CALL FEB-120*CLX-BD OI=341 at $4.88 SL=3.25 ITM $1.69
BUY CALL FEB-125 CLX-BE OI=  0 at $2.38 SL=1.25
BUY CALL MAR-120 CLX-CD OI=  6 at $7.00 SL=5.25 ITM $1.69
BUY CALL APR-125 CLX-DE OI=  0 at $6.25 SL=4.50
(125's are new strikes)

Picked on Jan.28th at   $121.69    PE = 38
Change since picked      + 0.00    52 week low =$ 75.50
Analysts Ratings      5-4-3-0-0    52 week high=$124.38
Last earnings on 01/99  est=.54    actual=.55
Next earnings on 04-21  est=.83    versus=.72
Chart = http://quote.yahoo.com/q?s=CLX&d=3m

*************************************************************

CVC - Cablevision Systems Corp. $70.50 +2.63 (+7.62 for the week)

Like its name suggests, Cablevision Systems Corporation is a
cable company.  It has approximately three million subscribers
concentrated mostly in the northeast.  Through its subsidiary
Rainbow Media Holdings, CVC owns cable channels like American
Movie Classics, Bravo, and the Independent Film Channel.  It
also owns 60% of Regional Programming Partners and 80% of
Madison square Garden, the New York Knicks, and the New York
Rangers hockey team.

Cablevision is a steady mover.  Since mid-December it has
climbed $28 and it shows no signs of slowing down.  CVC is
up +$7.62 this week alone and has shown strength under the
recent rocky and stable market conditions alike.  On Monday
Jan 25th, Merrill Lynch raised its price target for the stock
to $85 a share which should only help the stock.  Earnings
reports are due for the company on February 18th.  We are
looking for Cablevision Systems to continue its well
established uptrend.

News on the week:  Cablevision set another all time high in
intraday trading on Thursday.  The new record and resistance
level for the company is now perched at $71.00 a share.

BUY CALL FEB-65 CVC-BM OI=125 at $7.63 SL=5.75
BUY CALL FEB-70 CVC-BN OI= 53 at $4.63 SL=2.75
BUY CALL MAR-70*CVC-CN OI= 62 at $7.13 SL=5.25
no volume yet on MAR-75s

Picked on January 28th at $70.50      PE= N/A
Change since picked      +$ 0.00      52 week low =$21.75
Analysts Ratings       3-3-1-0-0      52 week high=$71.00
Last earnings 09/98 est -0.84   actual -0.75
Next earnings 02-18 est -0.77   versus  1.82
Chart = http://quote.yahoo.com/q?s=cvc&d=3m

******************
NEW PUT PLAYS
******************

None


*****************************************************
COMBINATION PLAYS
*****************************************************
The Bull's continue to run...

Stocks moved lower Wednesday as nervous investors braced for the
testimony on the economy by Fed Chairman Alan Greenspan. The main
focus of the Thursday meeting could be the current high level of
stock prices. The Dow Jones industrial average ended down 124
points at at 9,200. Technology stocks, the stalwart group in many
recent sessions despite softer prices in most other sectors of the
market, also faded and this despite a good morning session put in
by the Internet issues. The performance of the broader market has
also been a sore spot among market technicians for quite some time
and Wednesday's poor showing only added fuel to those concerns.

Our Tuesday plays were a raucious group. MSFT opened higher with
most of the technology stocks but eventually it fell back and just
a little patience allowed traders to achieve the suggested credit
of $1.50 for the (MAR155P/160P) bull-put spread. DELL was also
higher in the morning and some of you had to wait until a few
minutes after 10 AM for the correct entry price of $0.81 on the
MAR65P/70P credit spread. XRX was stable most of the day and the
the calendar position (MAR120C/FEB120C) was available more than
once at $2.87 debit and the lowest I saw was $2.75. IBM was the
big mover and although we expected a pull-back, $7 was a bit much.
We started the play (MAR175C/185C debit spread) with a reduced
entry price of $5.50 but by the end of the day the spread was down
to $4.50 so we decided to double-up, reducing our overall position
to a nice round number. Those of you playing the spread could
easily better our position, but that doesn't mean it won't fall
further tomorrow. Eventually, we think IBM will make the split run
to the $180-$190 range...Lets hope so!

BGP appears destined to fall well short of our long position in
February. After this week, we will no longer track the calendar
spread and just be thankful that the debit spread had a positive
outcome. SRCM continued lower but did not reach our target exit.
The goal is still $1.00 for the FEB15P but with time running out,
we make take the small profit soon. The JMED straddle started to
show some activity the last few days. Any continued downward
movement may help us exit the bearish side of the play shortly.

Thursday, January 28

U.S. stocks rallied Thursday as Internet mania propelled the tech
issues. Two mergers AOL's positive earnings helped the market move
higher. Yahoo!'s planned purchase of GeoCities and Intel's stock
split drove investors to a buying frenzy in the technology arena.
The incredible performance by the technology sector lifted broad
market averages to hearty gains in the process. The DJIA ended up
81 points at 9281.33. But the Nasdaq composite index was again the
story of the day, rising 70 points to a record 2477.33. Observers
continued to express concern over the deficient breadth of the
market's advance of late, but most weren't ready to turn outright
negative on U.S. shares and Greenspan may have put the icing on
the cake when he said that Internet stocks, despite their high
valuations, might have their place in the bull market.

AOL, CTXS, DELL, EMC and SEPR were our big movers and even IBM
finished positive. LVLT is now approaching the exit target but
SRCM continued to hang-on with today's rally. Stocks that are
approaching downside limits include RDRT and SCUR. We will keep
a close eye on these plays. Shares of Centocor climbed past $44
after the company said fourth-quarter profit rose to 14 cents a
share before charges, exceeding the average estimate of analysts.
For those of you interested in the butterfly roll-out, today's
move allowed an easy exit from the bullish part of the spread;
APR35C/45C for a credit of $3.50. Now the plan would require the
stock price to fall enough so that the APR45C/40C can be bought
for less than $2.62 (the current cost basis). Butterfly spreads
are an excellent neutral strategy and they have more flexibility
than a straddle.
******************************************************************
    - NEW PLAYS -
******************************************************************
INTC - Intel $137.19     *** More Splits ***

INTC designs, manufactures and markets microcomputer components
and related products at various levels of integration. INTC's
principal components consist of silicon-based semiconductors
etched with complex patterns of transistors. With about 85% of
the microprocessor market, Intel is definitely inside. Its chips
have been providing the brains for IBM-compatible PCs since 1981.
The company also makes computer flash memory; microcontrollers;
and networking, communications, and graphics products. Intel
continues to expand and upgrade its products and facilities to
maintain its dominance over rival chip makers such as Cyrix and
Advanced Micro Devices.

Intel is the most recent of several high tech companies that have
announced stock splits this month, including Microsoft, IBM, Sun
Microsystems, eBay and Yahoo. In a move widely anticipated by
financial analysts, they announced a 2-for-1 stock split to make
shares more affordable to investors. The split takes effect 4/11
and that gives us plenty of time for the stock to recover from
any short-term pullback. There should be a dip in tomorrow's
trading to help you improve the opening position.

PLAY (very conservative/credit spread):

BUY  PUT MAR-115 INQ-OC OI=70   A=$2.00
SELL PUT MAR-120 INQ-OD OI=2476 B=$2.68
NET CREDIT TARGET=$0.81 ROI=19%

PLAY (conservative/diagonal spread):

BUY  CALL APR-135 INQ-DG OI=1720  A=$13.50
SELL CALL FEB-140 INQ-BH OI=21568 B=$4.62
INITIAL NET DEBIT TARGET=$8.50 TARGET ROI=50%

Chart = http://quote.yahoo.com/q?s=INTC&d=3m
******************************************************************
DST - DST Systems  $61.62     *** Technicals Only ***

DST Systems provides information processing services and computer
software products and services to mutual funds (it has about 30%
of the market), insurance providers, and banks. Clients include
Janus Capital and T. Rowe Price Corp. DST's Emerging Business unit
consists of Argus Health Systems (prescription claims processing)
and DBS Systems Corp. (cable television subscriber-mgmt. software).

In 1998 DST, Boston EquiServe, and First Chicago Trust teamed up
to form EquiServe, a provider of corporate stock transfers, the
largest company of its kind in the US. The company has operations
worldwide and about 16% of its sales are outside the US.

Earnings are due soon but they are expected to be inline with most
analyst's numbers and the chart looks healthy with some short-term
support around $55.

PLAY (conservative/credit spread):

BUY  PUT FEB-50 DST-NJ OI=147 A=$0.50
SELL PUT FEB-55 DST-NK OI=7   B=$1.06
NET CREDIT TARGET=$0.62 ROI=14%

Chart = http://quote.yahoo.com/q?s=DST&d=3m
******************************************************************
WLP - Wellpoint Health Network  $72.62     *** Technicals Only ***

WellPoint Health Networks, the #2 health insurer in California
serves about 30 million members nationally through HMOs, PPOs, and
specialty networks such as dental and mental health plans. The
company operates as Blue Cross of California in its home state,
where some two-thirds of its medical care members reside, and as
UNICARE elsewhere. WellPoint also sells life insurance through
subsidiary WellPoint Life Insurance and workers' compensation
services through subsidiary UNICARE Financial. The company is a
care contractor for Medi-Cal, California's Medicaid program, and
provides third-party administration for self-insured companies.

With most losses accounted for in earlier quarters and a clear
sense of costs, HMOs are expected to post fourth quarter gains
in line with Wall Street's expectations. However, even with an
extremely positive report,(Wellpoint is expected to report an 18%
jump in earnings) the recent chart history reflects a somewhat
disappointing outlook. We think it will easily finish below the
sold strike in February.

PLAY (conservative/credit spread):

BUY  CALL FEB-85 WLP-BQ OI=139 A=$0.56
SELL CALL FEB-80 WLP-BP OI=14  B=$1.00
NET CREDIT TARGET=$0.50 ROI=11%

Chart = http://quote.yahoo.com/q?s=WLP&d=3m
******************************************************************
AZPN - Aspen Technology  $17.06     *** Excellent Earnings ***

Aspen Technology builds computer systems that assist process
manufacturers in designing and automating their plant operations.
Companies such as Chevron, Dow Chemical, Procter & Gamble, and
Weyerhaeuser use Aspen's software to find more efficient methods
of production and management. The company, which has facilities in
more than 20 countries, has continued to extend its reach and
product line through acquisitions of smaller firms with similar
simulation and modeling technologies.

On Wednesday, they reported favorable quarterly earnings, a very
positive outlook with new contracts and license agreements. The
company was also upgraded by SG COWEN and CO. The chart is bullish
with a recent break-out from a long-term base on good volume and
excellent buying pressure.

PLAY (conservative/diagonal spread):

BUY  CALL MAR-15.00 ZQP-CC OI=10 A=$3.38
SELL CALL FEB-17.50 ZQP-BW OI=95 B=$0.93
NET DEBIT TARGET=$2.25 TARGET ROI=25%

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

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*************************************************************
                      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
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editor and staff of The Option Investor Newsletter may own,
buy or sell securities presented. All investors should consult
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