Tabell’s Market Letter – September 26, 1952

NEW YORK 5, N, Y 35 W… II Street DIGBY 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 5-5977 TABELL'S MARKET LETTER '- LOS ANGELES 13, CALIF 550 South Spring Street MADISON 322 SAN FRANCISCO 4, CALIF 2b5 Montgomery Street SUTTER 12100 … ' , ,I ,I '\ \1 I The market,at the week's highs of 273.74 in the Dow-Jones industrials ,and 102.92 in the rails, had rallied back to the first overhead resistance ,,', 'reas of 273-275 and 101-103. The diverse action of recent months continued ,during the five-day rally with some groups like the electronics and rails ,,' ,advancing sharply while other groups like the oils, metals and chemicals -', rallied feebly and appeared to be under selling pressure. There was even ';' , diverse action within the same groups with American Cyanamid selling around' , the year's high at the same time that Monsanto Chemical was selling near '', 'the year's low. I expect this selective action to continue despite the fact' ,that the averages appear to be in at least an intermediate downtrend. Woul' ,continue the policy of liquidating issues with vulnerable technical patterns, ,during periods of strength and acquiring issues with favorable, long term' 'patterns only during periods of general markt weakness. LONG TERM INVESTMENT Despite the fact that the intermediate term trend may be down, I continue to advise a 100 invested position in accounts' , concerned mainly with income and longer-term appreCiation. Holdings of sound, ,.good quality, dividend paying issues should be retained, particularly when ,' ,'bought at considerably lower price levels. The longer term trend indicates, ,'ultimately higher price levels and good grade issues should continue divi- ,,' dend payments at approximately present rates. Further weakness should pre- ', , sent buying opportunities in selected issues ;,' ;' ALLIS CHALMERS (50) The stock is in a slow uptrend channel from the;;,;' ; 1949 low of 26. The outer limits are now 57 and 36. Stock br9ke out of the ' ',four-year old 26-40 range and indicated 50-55 followed by a longer term , ,65-75. The trading range formed in the 40-47 range indicated 53-57. The '1951 high was 54. Stock has held recently in the 54-48 range. An upside ; penetration would indicate 60-62. ', , JOY MANUFACTURING (32) has formed a head and shoulders bottom at ' 31-24-28 with a top at 40. A breakout on the upside of this range would inr dicate 60. Would buy on all price dips. February high was 38. There is 'strong support in the 33-30 range. PHILLIPS PETROLEUM (57) Stock is in an uptrend channel from the '1949 low of 27. The outer limits of the channel are now at 53 and 70. ; The upside objectives of the 27-32 base were 51 and 67. First objective ,- was reached at 1951 high of 54. The upside penetration of the 47-54 range ;' indicated 60-67. Recent high was 62. The minor top at 62-60 suggests a I' 1- t ',decline to 54-52 where the stock should be bought. CAPITAL APPRECIATION I have advised a 75 to 50 liquid position -;, in risk accounts concerned mainly'with capital appreciation over a six i ,IDonths period. The recent sell-off' confirms the advisability of this course;, ','of action. However, on further weakness would bring accounts up to 60 ' 'invested. ALLEGHENY LUDLUM STEEL (35) The re-accumulation area in the 37-43 ;,,, i,,range indicated 46 to 52. A high of 52 was reached in 1951. Stock held in the 52-37 area since late 1950. The downside penetration indicates 33-28. '), Would buy in the 33-28 area where there is good support. , , , rally ,c'ation t BEAUNIT MILLS (20) A higho 32 formed a trading range was 21 which is a strong su powpf oh3ri7ct hawwraesaas r. epaAecnpheretidrla. ltoeTwdhewddoaewscn1lsi9ind. eeM. tooTreh2e7tiimnadneid-I0''.', , IDay be needed to build up a base but the stock appears to be a purchase , , in the 19-21 range. , VANADIUM CORP. (41) A very wide potential base has been built up i, 'with an upside possibility of 60. The stock broke out of the seven-month ,', trading range between 34 and 40. The upside penetration indicates 50. The r Y',;recent high was 45. Buy on dips to 40-38. ,September 26, 1952 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Dow-Jones Industrials – 27195 Dow-Jones Rails – 101.59 ThIS memorandum il not to b. construed al an offer or ,elldtation of offers to buy or ,.11 tiny 5ecuriti From time to time Wahto. Hoffman & GoodWin may Itve In Interest in fom. or Ill of the ccmhel mentioned hltrein T foreqoinq matarial hlf been prepr&d by us 1 I m.aUer of In'Otmllh11I only It If. based upon mformtltion beheyed reliable but not neceutlrily tomplete, it not ulITanteed al atcurat. or fln,,'. and is not Intehded to foretlose Indepelldent ,nqulry. r, ,,' .., ' — / , '' ',,,' , )','',,';',',,, ,i,' ,,'''''\ .. ,Gi' lllli.,t 1,1i i a.ai. li