Tabell’s Market Letter – April 06, 1951
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'– -' -, —…r;T7 I' -. -,,-'. – '-'-,'- jr..,. t;' ;1;1,,; fAil 'I NEW YORK 5, N. Y. PHILADELPHIA 2, PA P', 35 WaU Street t DIGBY 414141 1420 Walnut Street PENNYPACKER S-5977 i'';' – – – . , . – – – – – – – – – – LOS ANGELES 13, CALIF, 550 South Spring Street MADISON 9-322 SAN FRANCISCO 4, CALIF, 265 Montgomery Street SUTTER ''700 I;;;, TABELL'S MARKET LEnER , !' '- '; , '!'I ,.,I' ;' VI II'q',,!!,,1I,i \\-,'\ ;-\ During the early part of the past week, the market drifted slowly ''iLower on small volume. The industrials, at the early Wednesday price of ;,,244 .98, were at the lowest level since the March ,14th low of 242.06. But ,,;, '-;the rails, at Wednesday's low of 79.23, held above the previous week's L I,' rt',,',' ,;, -,,, 'l'; 1(78.65 bottom.. In line with their barometric action of the past two years, iI ii,t,'the firmness in the rails waf a signal for a sharp rally that started in ' ',the last hour Wednesday. By Friday, the industrials had rallied to a high !of 252.22 and the rails to 83.53. At Friday's highs, both averages were ,plose to very heavy overhead resistance. There is considerable supply at f t,;,253-255 in the industrials and at 84-86 in the rails. It ma require some hews development of major importance to enable the market to penetrate the ' ;1',pverhanging stock. \; '; The longer the market remains in a trading area Similar to the , ;','257.06-242.06 range of the Dow-Jones industrials, the more dynamic will be ,,'; ;ithe move in either direction. 4t the moment, an upside penetration of this' I'trading area in the industrial average would indicate a potential of about ;',;260. A downside penetration would indicate a potential of about 236-232 , ';' 'This last objective is somewhat lower than the previous objective of 240- ',;, ;,,236 because the recent rally may result in the broadening of the possible ;,top. There are Similar patterns to the above in the other averages and ,'ln individual issues. !I The direction of the next near term mdve is uncertain but my work ;j', 'iipontinues to favor the probability 1tional top pattern. Both averages that we are slowly building a distriburemain in an overall downtrend Since 1, (' ,the February high of 257.06 and 90.82. Even a mild upside penetrat1'on by , !-;,one of the averages would not destroy this potential top formation. Sharply ( , 1''increased volume apparently would be needed to penetrate the overhead ,,,,7 i,iresistance. Volume indications remain relatively unfavorable up to the , '(present. Thursday's volume of 1,790,000 shares on the sharp upswing was below the 2,330,000 share trading of March 12th on the decline. I., ,' At Friday's close, the market gave some indications of losing its ', 'momentum on the short term upside move. While both averages reached new highS, volume dec lined from the previous day and there were 601 advances if 'l'in individual issues against 840 on Thursday. A-lso, declines increased to 273 on Friday as against 133 on Thursday. This action coupled with the ', ,f'indications that the market is near overhead supply and that the short ;, term indicator is now in overbought territory, suggests caution. ','; ',; I still advise 60 liquidity in intermediate term trading accounts ,;; Las t week, I suggested fifteen issues for purchase at specified prices and t; ;',;;an increase to a 60 invested position if the industrial average reached ;'the 240-236 area. I would not ,follow this procedure at the present ti(lle ;because the rally may have broadened the potential tops. I would remove ;;,the buying advice on the f'ifteen issues mentioned in last week's letter ,!,u n t i l the pattern clarifies. Only one issue of the fifteen, Lowenstein, reached its indicated ,,' ;;', ' , ';' '' !',','purchase price. Lowenstein, Which was originally recommended at 19 and y;i;,the sale recommended at 36, reacted to slightly below the indicated 30 ' ,,, ',cbuyiilg level and is now included in my recommended list 0 ,0, f , 6, 1951 EDMUND W TABELL WALSTON, HOFFMAN & GOODWIN – J ,, , Closings Dow-Jones Industrials 250.83 Dow-Jones Rails 83.02 , i' ThIS memorendl,lm Jt'J\ot to 'b. construed as an offer or solicitation of Offeu to buy or sell any secur.lull frm time to lime Waldon, Hoffman & Good….. mell' have an Interest in some or all of the securities menticrUld here.n. The ,fore90,ng ml!lhmr has been preparfd by IJI as II matter of information only It h bued upon Informl!ltion tfeved reliable but not neuuar.I, complete, is -kot ;uaranleed ./IS, accurate orfinal; IS not intenged to foreclose independent inquiry. – ';7;.I'. –'1;, -,1 — -, – ,.-, . .– – I ;';T,;-,-\ ,-! I/– – –7'- – –