Tabell’s Market Letter – November 30, 1951

Tabell’s Market Letter – November 30, 1951

Tabell's Market Letter - November 30, 1951
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– – – — -,————,—– –… -.– ift;J'r!lv'fJ;;,,'i'\,\1'\';fn;J' Wols ton. HoffIll on &- Goodwin ,-,;p,,''';;'''-'(''';''j;,;!;'of!l 'l!- 7;P1 ,P I; ',(r; NEW YORK 5, N. Y. 35 Wall Street PHILADELPHIA 2, PA 1420 Walnut Street )'.. 'i, D'G'Y 4.4' PENNYPACKER 5-5977 TABELL'S MARKET LETTER LOS ANGELES '3, CALIF. 550 South Spring Street MADISON '322 SAN FRANCISCO 4, CALIF. 265 Montgomery Street SUTTER 11700 \\, tI1k,fl E, hi.'., ,industTrhiealms arke for t t th he i s f week ourth tested the 255 support level in the Dow-Jones ,t1'-r time. It also broke the series of descending lowJ3 L;that has been in effect since October 22nd,. The table below outlines the ma ,moves of the industrials since the year's high reached 0,1 September 11th I) i;J fHigh Sept.ll 277.51 Oct.22 Oct.24 266.79 Oct.29 Nov.l Nov.8 265.82 Nov.15 262.29 Nov.26 i1 'Ill ,'I,Low t'l, i'.!, f,') 259.46 256.39 254.91 255.20 ;1,g1; It will be noted that the highs also have been in descending sequence.p (jAbility to break out of this downtrend channel would be an encouraging tech1 'I, lnical indication. Other technical gauges have also shown potential improving,, i'i;action and apparently substantiate my opinion expressed several weeks ago il1' ,ithat this phase of the decline would not carry much below the 260-255 supporjl', 1 ,.',level. lihli' .' An advance at this time would be in accordance with the usual traditio/);i- ial pattern. On many occasions in the past, the market has reached a low in l -November or December and then staged a sharp advance into January or Februa1j. ',''I'he present technial pattern suggests that such an advance is possible at ;;;thiS time. Just how far such an advance could carry in this particular inst-;, (',ance is extremely problematical. There is a very heavy supply area at 270-27'71,, ,,;.,;that will furnish strong overhead resistance. However, indications are prom-,',! !;ising enough to advise increasing invested positions, in accounts concerned 7,;'; t,,;'mainly with capital appreciation, from the 25 invested pOSition formerly i,;'iadvised to 50 invested and the balance held as a buying reserve. This in noli ;I';'I1way alters my longer term opinion that the market is in the process of buildi1'. t;dng a broad distributional top in an area bounded roughly by 240 and 280 in ; ''the industrial average and that the market in 1952 or 1953 will eventually ;' ,;decline to the i,,commitments in 220-200 level before the major advance is resumed. Increased the 255-260 area Should be considered only by those accounts , F 'interested in a speculative turn and willing to abandon such positions in ,. l;;,the event that technical indications again turn unfavorable. I,;, The individual issues showing the best technical action during the i;i let,l i;o tipeptember-November decline were the secondary issues of the type carried in vi (.my recommended list and in which I have advised continued holding up to 25 'r; ;pf available funds with the remaining 75 liquid as a buying reserve. The fj' ,-,efensive action of most of these issues has been above average and price l!' ''ideclines, in the main, were relatively moderate. On the other hand, many of k Jthe top grade If growth issues If that had advanced sharply over recent months bi f;'I,nd had overdiscounted their immediate prospects and which I advised avoicl.- J;ing, sUffered a sharp decline. The industrial average dropped 22 points or 1';; ,.pproximately 8 from the high of 277 to the recent low of 255. The follow- i' ;,;tng high grade issues declined more than double this percentage drop from , rthe year's high ili 1951 High Recent Low Percent .Decline t; ;c), American Cyanamid ,''' Corning Glass 131 78 102 63 22 ';l 19 ;; Dow Chemical I',,', duPont Freeport Sulphur ; Hooker Electro .Chem. Merck & Company .i Minnesota Mining 119 102 49 69 38 54 98 82 36 54 29 41 18 19 ' / 26 'i,1I;, 21 ; 23 24 .!,,' i'-' Pfizer 46 36 I SqUibb 29 22 ;i;!, Union Carbide 66 55 21 , 24 16 ''',, ;;) Even a prime investment issue can be a speculation if the price moves i,.!' 'r, too far ahead of near term potentials. At the recent lows, these issues l('t,' ,,; were undoubtedly selling on a more realistic basis. However, from a techni- \',i 1; cal viewpoint, these issues may have to spend more time in building new j; H1l1\ pat terns . t For price appreciation over the next few weeks would concentrate on 'i the elec tronic issues, airlines, se lec ted rails, building supplies, machine- t';l;i \1 ry issues, utili ties, office equipments and undervalued soft goods stocks. \i . . '. – , . ' ..-;Yt','.lhi,,',;l,'NIFrre.MOWzVt.bh,'l',tr,m.'f\IJ('r.IM1i'I!\7it.i,',fo-df,QSt\;.j!,.c,fjo.,nm,ovr,t6el.tQ1I!I9o)1J;,,j;d9fCQf;wMu'beu,d.tcOunorStilitnin.'eocfmflener.anr-to-iirolynseodclolchml'lo;rptl,lii.on',ne,,T'o.Ihf;seOnf,fo.of-t.rf-el;'tJoo-ulan.brgWuyHlAl.Po-I.rrtyl,.I.,ILIlJri,aJn\uyrab'lIl'JcnutOr1lrJt-.lIu1Jt.pPiFinr1'jodbm,-w'it;ilum.lenoattso..GntOtimm.(neateRtedWraJtloosftofoIn.r'efoer.mool,ae!t,i,aonn'n.opnnlyd.0I0tIlnb;iml'.la.dL,,,,,,–rI';J'ft,I;\;1''!/yJ

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