Tabell’s Market Letter – March 17, 1950

—— … —————————————— Walston-Hoffman &, Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFiElD BEVERLY HILLS EAST ORANGE, N. J. LONG BEACH MODESTO OAKLAND PASADENA SACRAMENTO SAN 01 EGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISBURG, PA. PEBBLE BEACH PITTSBURGH, PA. RIVERSIDE SANTA ANA STOCKTON VALLEJO TABELL'S MARKET LETTER 35 WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 HOTEL WALDORFASTORIA PLaza 9-6860 The market weakness which carried down to the closing low in the Dow industrials of 202.33 on March 9th, was the strongest attempt we have witnessed to break through the resistance line that has furnished downside support since June of last year. From the March 9th low point, investment buying, demonstrated by the high quality of the market leadership, again firmed the entire list, carrying the industrial averages to new highs. As this is written, the short term market measurement is again overbought, as it was on February 3rd at 205.03. As we said at that time these minor overbought conditions within the framework of the strong long term uptrend are not necessarily serious but often serve as a limiting factor in the rate of advance. These waves of strength should be utilized for taking short term profits, maintaining liquidity for aggressive buying on weakness. The long term investor should continue to maintain a highly invested position and further purchases are advisable in well situated stocks. Additional reviews of stocks on the recommended list follow ALLIS CHALMERS – A very strong pattern has been built up in the 26-30 range and penetrated upside. The first objective is 39. Would buy on all dips. 1949 earnings of 6.99 a share set a new record. three y e aErLsE. CTARICst BOAT rong – The stock pattern has held been in the formed 11-17 range for over with the June low at 13 holdIng above the 1947 and 1948 lows of 11. The recent up- side penetration to 19 7/8 indicates 25 followed by an eventual 35. Would buy on all dips. ELLIOTT COMPANY – The stock has been in an uptrend since the October, 1946 low of 15. The 1948 low was 16 and the June low was 18. A new three-year high of 28t was recently reached. An initial objective of 36-37 is indicated. Would buy on all dips. PENN-DIXIE CEMENT – The stock has penetrated the strong head and shoulders base pattern formed at 18-14-16 over a threeyear period. The initial objective is 39 followed by a possible eventual 53. Approx. Price Dividend Yield 1946 High 1949 Earnings Allis Chalmers 34 2.00 5.9 62 3/4 6.99 Electric Boat 18 1/4 1.50 8.2 35 3/4 N.A. Elliott Company 25 1/2 1.75 6.8 39 1/2 6.85 Penn-Dixie Cement 27 1. 75 6.4 30 3/4 4.37 N.A. – Not available as yet. Will be below 2.49 of 1948 due to non-operating writeoffs. Backlog of 45,780,000. March 17,1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Thls memorandum Is not to be construed a. an offer or .olicltation of offerl to buy or .ell any securities. From time to time Walston, Hoffman & Goodwin may have !In 1ntere.t In lome or ell of the securities mentioned hereIn. The foreQolnQ m.!lterial hat been prepllred by us as .!I m.!ltter of Information only. It Is b.!lsed upon InformatIon belhllved ,ell.,ble but not necess'lrl1y complete, 15 not gunntead liS IIccur.!lte r flnlll, and Is not Intanded to foreclose independent InquIry, '- — – — ,–, I' r .(';.. – – – — – – , , – –