Prime Stock Advisory Letter for January 14th, 1999

---

Today's Comments:  The overall market opened sharply lower and continued to move lower before a mid day rally erased a significant portion of its earlier losses.  As I have said several times before when the market moves sharply lower and then rallies sharply for a partial recovery,  the significant thing is how the lows affect the charts not the subsequent rally from those lows.  The sell off was broad based and effected almost all of the sector indices I track.  The healthcare, retail, and older high tech indices were higher on the day.  Everything else was lower on the day.  At some point in the future,  earnings and valuation will start to matter again.  If we do not choose to pay attention to this then I am sure someone else will remind us of their importance at some point in the future.  Maybe it will be the Brazilian or those who are worried about the effects of Brazil;  or maybe not.  I have seen a lot of different industry groups and markets heat up where everyone had to be in them.  And one thing I know for sure is that all the money in the world will not support a stock or market that disappoints on its earnings expectations.  I am not trying to scare anyone out the current market,  but I am advising a word of caution.  I feel that some significant technical damage was done to the market today.  My thoughts are that the market is in for a round of profit taking,  but not a major pullback.  This is options expiration week,  look to roll out to the February contracts. The Bottom Line:  The market should move lower.

Company: Chase Manhattan Corp.     Symbol: 'CMB'    Closing Price: $71.625/share.
YH: $77.75 YL: $35.56      EPS: $3.90     P/E: 18.3      Forecasted EPS: $5.62
Dividend: $1.44      Yield: 2.01%     Ex Dividend: 1/4/99
Price Targets:  $63.50 & then $58.81    Upside Stop:  $74.125
Options Recommendation: February 75 Puts,  Symbol 'CMBNO' @ $6.375/contract.

Company Description: This company is a major money center bank.

Recent News:   1/13  US Financial Stocks hit as Brazilian economy roiled.

Our Analysis: 'CMB' is a component of the S&P Banking Index 'BIX' and the Philadelphia Banking Index 'BKX'.  I have down graded both of these indices as moving lower from their current levels.  The shares of 'CMB' gapped lower on the open of trading yesterday.  They finished the day by closing below a key support level on heavier than normal trading volume.  They should continue to move lower and test $63.50/share,  the point from which they gapped higher in mid December of this year.  If they close below that level then they should continue to move lower and test $58.81/share,  a point of downside support established in early to mid December of this year.  US Banking stocks are currently under pressure due to concerns over the Brazilian economy.