Tabell’s Market Letter – March 30, 1951
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— — -.-..– PHILADELPHIA 2, PA 35 Wall Street 1420 Walnut Street DIGBY 44141 L PENNYPACKER 55'm '0 -TA-B-E-LL-'S-M-A-R-KE-T-L-E-n-ER—— LOS ANGELES 13, CALIF, SAN FRANCISCO 4, CALIF, 550 South Sprin9 Street 265 Mont90mery Street MADISON '3212 sunER 17OD After reaching lows on of 245.34 on the industrials and r 78.65 on the rails; the market rallied moderately to 249.25 and 80.97 on Friday. I do not expect the rally' to carry very far. Volume indica- ,tions continue unfavorable with 1,770,000 shares traded on Wednesday's ,'', decli n e as The against 1,150,000 on Friday'S advance. rails will most likely continue to give a clew as to the near ',; ;,;S term trend of the market. The rails have spearheaded almost every advance , ' and decline Since June, 1949. This is particularly true since the Korean- iY ; ,lows, Wednesday's downside penetration by the rails will most likely be ;0; followed by a new low on the industrial average. , 'The rails have reacted 13 from the high of 90.82 while the indus- ;,,; ;'. trials, at the March 14th lows, had reacted less than 6 from the high .;' ; .- of 257,06, It would ap'1ear that the rails are nearer their lows for this ;' ,'phase of the decline than the industrials. Would expect the rail average r,to make its low during the next few days in the 78-76 area. This should / ;, be followed by a mild technical comeback. On the following minor decline, ,;' ,; the rails might hold above their previous low while the industrials might ,0' ;,' reach their low in the 236-240 area. This is largely guesswork but P ' appears to be a probable pattern. 1''– , , After both averages reach their lows for this phase of the decline, , ,-(in presumably the 240-236 and 78-76 range) technical action must be -, , watched very closely, A rally with weak characteristics might substantially broaden the distributional pattern and indicate considerably lower levels. , ,' The alternative would be a co.structive re-accumulation pattern. It will ti , take time, possibly a couple of months or more, before the new technical !- pattern is complete. , This letter has been advising 60 liquidity in accounts whose main ';, ,'objective is intermediate term capital gains. If the market reacts to ,.. the 240-236 and 78-76 area WOUld advise using one-third of liquid funds 7 t;, ' in pUrchasing selected issues, thus bringing liquid position down to '40. Would buy only on weakness. Suggest the following issues at the , ;', prices mentioned , BETTER GRADE MEDIUM GRADE SPECULATIVE , . ' Commercial Credit (rO) Fairbanks Morse (44 Montgomery Ward (66 Otis Elevator (35) Vester '.uto Supply (42) Carrier Corp.(20) Balt.& Ohio (18) Fruehauf Trailer (25) Chic.& No.West(21) Lowenstein (30) Goodall Sanford (18) Nat'l Supply (21) Inter.Tel (15) Sylvania Elec.(26) Spiegel (11) ,' Bal timore & Ohio, Chicago & Northwestern Railway and International .',,, Telephone are new additions to my recommended list. Lowenstein was ,, originally recommended at 19 and profit taking was advised at 36. The balance of the issues are on the present recommended list. Downside objectives on some leading issues follow ,', , ' 1951 H!h Allied Stores ; Allis Chalmers 47 ' AlTIer.Smelting 80 , Assoc.Dry Goods 25 , Bethlehem Steel 60 Canadian Pacific 29 , Case, J.L 64 ,Celanese 56 , Denver Rio Gr. 65 Gulf Oil 91 Illinois Central 75 ' Int'l Paper 56 Price Now 43 43 71 20 53 25 55 48 54 85 62 50 Downside 1951 Price Goal 41 Kennecott Hfgh 9 Now 40 Monsanto 84 76 65 Nat'l Lead 76 70 18 N.Y,Central 26 19 48-45 Phelps Dodge 69 61 23 Schenley 41 34 50 So.Pacific 74 65 49-47 So.Railway 64 51 46 Texas Co. 94 89 81 U.S.Rubber 59 53 57-54 U.S.Steel 47 42 47-43 West.Maryland 29 23 Youngstown S. 59 52 Downside Goal 64 72-69 60 19-17 58 30 60-59 48-46 86-83 50-47 40 23-21 49-47 '. ' March 30, 1951 Closings Dow-Jones Ind. Dow-Jones Rails 248.53 80.61 EDMUND W. TABELL ,wALSTON, HOFFMAN & GOODWIN ' This memorandum is not to be construed as ./In offer or solIcitation of offers to buy or Sell any seCUrltiel from tIme to time Walston, Hoffman GoodWIn may have an intered in some or all of the securities mentioned herein. The foregoing materIal has been prepared by us as a matter of informatIon only It is based upon informatIon believed reliable but nol neceuarlly complete, is lIot ;uaranteed .u accurate or fInal, and is not intended to foreclose independent inquiry ,, ……' ,'/' .' -'' ' ,-. ',' , …. ',' ' ' ,, ' \