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.Wolston.Hoffmon&Goodwin NEW YORK 5, N. Y. 3S WII Street DIGBY 4-4141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 5-'977 TABELL'S MARKET LETTER LOS ANGELES 13, CALIF 550 South Spring Sheet MADISON 9-3232 SAN FRANCISCO 4, CALIF 265 Montgomery Street SUTTER I 171)0 Both averages have rallied sharply from the lows reached the day before Election and on Frida; were near the year 1 s highs reached last mo. -h October High Nov.6th Low Recent High Industrials Rails 232.75 71.31 220.59 6.00 231.01 70.39 At the November 6th lows,both averages had retraced about one-third of the advance from the July lows of 195.40 and 50.66. This is the minimum requirement of a correctionary decline and seemingly places the market in 'e. position to move ahead into new high terri tory. . However, in my opinion, if new highs are made they will not be much above the highs of OGober. The sharp up and down fluc tua1io(ls of the averages and of individual issues over the two or three weeks has considerably l)roadened the trading range. If this area is a distributional top, the po, tential downside implications have been considerably enlarged. I,. ., an event, the downside objective of the 1. . lstrial average would be in the 210-205 area. As most of the work in the trading range has been in the upper side of the area, a downside penetration would be more significant than an upside penetration. In the event of new highs, the objective would not be much more than 235-237. Under the circumstances, it would appear that the purchases at this high level entail the risk twenty to twenty-five points lower as against fiVe to seven points higher. In my opinion, the possibilities of profit ,. c' not warrant the risk involved. I would rather be a buyer when the possib lities were reversed as they were in JuJ.. Still advise tak 1g profits on further strength. Below is a technical report on some of the issues ,in my recommended list Di3TILLERS-SEAGRAM closed at 26 3/4 on Friday after equalL,1g the 1950 high of 27 dlJ.ring the day. This stock was originally recolJlll.nded at 15 and again at around 17 in July.\while this stock has ,advanced sharply, the technical pattern is still strong with an initial indication of 32 and a long t,c;. 1 40. In event of a general market correc tion the stock would most likely decline but there is .. strong support at 24-23 where the stock should be bought. FRUEHAUF TRAILER closed at 32 1/8 on Friday after reaching a new high. at 32 3/8. Fruehauf was originally recommended in this letter at 19 3/4, and has been often mentioned in the 20-23 range. The stock has reI ched its initial objective a 32 but-the longer term C' c '-ive is 41-47. S, me consolidation may be needed around present levels. Stock should be an attract- ive purchrae on price declines. .. NATIONAL LEAD reached a new high on Friday at 63 3/4. This stock Has recommended around 40 in July. At present prices it has passed its intermediate term objective which was extremely vague at 50-60. Seems high enough at present. Would be inclined to take profits and await a corrective ,reaction. Long term objective is 75-80. NATIONAL marketwise for SUPPLY closed two years. It at 19 on Friday. held' in the 19-16 The rang s e t o' h L'om as la t do e ne 19 4vl euryn\. illit t l e. September of this year. The year's high was 21. Stock has a strong . C(',/1- tial technical pattern and seems behind the marlet. Is near a strong support area, and even in the event of a general market decline should react only . moderately. REYNOLDS METALS closed at 37 5/8 on Friday. The year's high was 38 3/S. This stock was ori(,inally recommended at 21 and was consistently re-reCOlJllnen- ded while it was fluctuating aimlessly in the 21-25 area for over a year. The short term indication is vague but the longer term indication at 65 is so favorable that, despite its sharp advance, I hesitate to suggest taking profits. Recently, the stock has held in the 35-38 range and a penetration out of this area should indicate the next short term move. The upside indi- .. cation would be 41-43 and the downside would be 32-30. At the latter figure, the stock would appear to be a most interesting speculation. November 17, 1950 EDMUND W. TABELL WALSTON. HOFFMAN , GOODWIN This memordndu'! II -IIot to be construed 41. n off.r !,r solicita!lon f/f off.rl to buy or. ,elf dny stlcuri1ies From time to time Walston, Hoffman & Goodwin may have n Interet 11'1 sO.me or al of the securities mentioned herein The foregOing materllll hu been prepared by us as a matter of information only It is bosed upon Information beheved reliable but not nuenerUy compl.te, Is not guarutetld as dccur.ste or final, and is not intended to foreclose indepl1lndent Inql.olry ; … …..