Tabell’s Market Letter – February 03, 1950

SAN FRANCISCO, CALIF. NEW YORK; N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EAST ORANGE, N. J, LONG BEACH MODESTO OAKLAND PASADENA SACRAMENt'O SAN DIEGO SA.N JOSE EUREKA- FRESNO HAGERSTOWN, MD PEBBLE BEACH PITTSBURGH, PA SANTA ANA STOCKTON HARRISBURG, PA. RIVERSIDE VALleJO t ,, 35 WALL STREET, NEW YO.RK ,N.y.' , ..i TABEll'S MARKET lETTER ' Digby 4-4141 . ,;, .' The apparent consolidation in the upper part of the 195-205 indus- trial average range continues, With today's intra-day high being 205.-39, '. the short term market measurement has been slightly overbought for seven or eight 'trading hours. This is not necessarily serious in view of the steadily increasing strength of the longer term market but it does dictate I' ., inued caution in trading activities and selectivity of investment buy- !., I Still believe 190-195 in the industrials to be the rough limits of this consolidation area, with any reaction over the next few weeks having a probable downside objective of about 194. Also, such a reaction should be very selective, as the rise has been. . If, unexpectedly,the averages should run appreciallly above 205 during.' ; this ; same period, an overbought condition reaction should result. could well develop from which much the;! I Below are resumes of those merchandising issues on our recommended ' 1 I list which were not covered last week, together with the two liquor stocks .. we presently favor. i I' ,.' ,'; and a JVJ.I\.Y DEPARTMENT STORES half years. It has now This made issue held in the 36-48 range an upside penetration leaving for two ,. underneath i'.. .' it a heavy accumulation base. First objebtiye is 62 followed by 71. Would I…. buy this on even moderate weakness. i MONTGOMERY WARD – The stock has had a sharp decline from the 1946 I top of 104. It appears to be building up a broad accumulation area in 1' ; i I' , 1 1 the 48-65 range. The 49-48 low has held on three attempts. At the moment,' i Iithe stock is faced with the strong overhead supply area at 54-59 which may! f 1 take time to absorb. Ability to reach 60 would be very constructive. The i., I stock should be watched closely as it has an initial upside potential of I i i!,. v,i 8 0 – 9 0 . Would buy on all dipS or on a penetration to 60. I; .1 WESTERN AUTO SUP,PLY – The stock has an extremely irregular pattern !i but now has the appearance of forming a potential base pattern in the , .,33-46 range. The stock appears headed for the 60-70 range. -'ii .' I,.l DISTILLERS-SEAGRAM – On an adjusted split basis, the stock reached a high of 30 in 1946. The distributional area indicated a decline to 11. , iA low of 12 was reached in May, 1947 and tested both in March 1948 and June. 1949. A potential baoopattern has been built up in the 12-19 area. An 'upside penetration would indicate 23 followed by an eventul 32. Would buy ;,,at present levels and on all dips. ,. , SCHENLEY INDUSTRIES – The stock has been in a long downtrend since the 1946 high of 100. However, a potential base pattern has been building .;uP in the 23-28 range Since May, 1947. Ability to reach 31 is the first !gigtdOtt;e m ;;! rytahe5;Oar38 .1 Would buy between 30-34. 1 1,,1 May Dept .Stores i.jlj Montgomery Ward '1 i Western Auto Supply Approx. Price 49 58 3/4 44 Dividend Rate 3.00 3.00 a 3.00 Yield 6.1 5.1 1946 High 70 1949 Est. Earnings 5.00 104 1/4 6.50 c 4.75 Distillers-Seagram 18 1/4 1.05 b 5.7 30 3.98 e 1 j … Schenley Industries 33 2.00 6.0 100 6.00 f a. Including 1 extra. b. Total paid 1949 c. Year ended Jan .1950 ., i .j e. 12 mos.ended Oct.1949 f. 12 mos.ended Nov.1949 ;. EDMUND W.TABELL .r,,' February 3, 1950 WALSTON,HOFFMAN & GOODWIN This memorandum II not to be construed as an offer or solicitation of offers to buy or lell any securities. From time to time Walston, Hofman a Goodwin may have an Interest In some or all of the securities mentioned herein. The foregoing materIal hal been pte pared by us as a fT!Iatter of InformatIon only It 11 based upon Informlltion believed reliable but not neceuarily complete, 11 not guaranteed as accurate or final, and is not Intended to foreclose Independent Inquiry. . .. ……………….. . … .. .. … ''', ,… .. ……. –'''.'.,.', ….. ,','.,' ;,,,………… . . . . ………… , , , ' ,………….,. '. ……………f … …. . . . – — f