Tabell’s Market Letter – July 03, 1953
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Walston &- Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw,t,ld I OFFICES COAST TO COAST CONNECTEG BY DIRECT PRIVATE WIRE SYSTEM l'ABELLT'She MmAaRrKkEeTt LcEonntEiRnued its creeping advance during the week on small trading. On only one day did the volume of transactions reach the million share mark. At the week's high, the industrial average was approaching a one-third retracement of the thirty-five point decline from the January hi.ghs. The rails, of course, have already recovered half of tlJeir compar- al)le losses. I would expect a mild continuation of the advance over the 'lear term with, as usual, extreme selectivity. The building supply stocks have done little marketwise for over four years, despite the fact that the building industry has been experiencing a Gerrific boom both in the residential and industrial sectors and 1953 volume 1B expected to top that of 1952. The fear of an anticipated decline in con- st;ruction has held back building supply issues to the point where they cer- tainly do not appear overvalued. From a technical viewpoint, quite a number of building issues appear relatively attractive. They have done little marketwise since we included them in my recommended list over two years ago, but, on the other hand, they have acted very well defensively and the yields have been excellent. The present technical patterns are still constructive. Sizeable potential accu- mulation areas have been formed and most issues appear to be not too vul- nerable in case of a general market decline. The table below illustrates I;he present technical patterns of a number of selected building supply iEsues. The upside potentials and percentage advances are obviously for the long term and not for immediate act jon – Downside Upside Possible Possible Price Yield Support Potential Advance Decline 'American Radiator 14 7.1 13-12 22-25 78 14 Crane Co. Johns Manville 29 6.8 29-27 60 6.6 60-55 50-60 85-100 100 66 10 10 Na.tional Gypsum 21 6.6 1918 35-42 100 15 Otis Elevator U. S. Gypsum 40 6.2 39-37 45-65 106 7.0 100-96 170-180 62 70 10 10 Ya.le & Towne 36 6.9 33-32 60-66 82 10 These issues are recommended for patient long term holding and for good yield. A technical synopsis of these issues are outlined below. AMERICAN RADIATOR (14) This stock appears to be building up a strong potenlal base pattern in the 10-17 area. While no immediate move is indicated, the eventual objective is 25 foJlowed by 35. There is some temporary supply i1' the 20-22 range. Would buy on all price declines. Action may be very slow. Tbere is support at 13-12. eoCRANE COMPANY (29) The upside objective was attained at the high of 42 reach in 195. Stock held in 38-42 area. Downside penetration indicated 29. 1952 low was 29. Buy on all dips. Stock appears to be forming wide head and shoulders bottom with upside objective of 60 or better. The 29..34 potential base indicates a possible 38-43. There is support at 29-27. 7JO8H-7N3S MANVILLE (60'Stock reached its first objective at 78 in 1952. Held in area. The downside penetration indicates 63-58 where stock should be taught. Recent low was 60. Would buy on price declines as long term object- ive is 85 to 100. NATIONAL GYPSUM (21) While there is no indication of an immediate move, stock appears to have formed a strong base pattern in 12-25 area. There is an i!'1'itial objective of 32-35 followed by a later 42. Buy on all price dips. Tbere is support at 19-18. 01'IS ELEVATOR (40) Stock has been in a slow uptrend since 1950. Held in the 3539 range. The upside penetration indicates 45-49. Long term objective is 60-65. 1953 high was 45. Buy on dips. There is support at 39-37. U. S. GYPSUM (106) Stock appears to be building a strong potential base pattern in the broad 90-135 area. Upside implications are not clear,but are Substantial. Would buy on declines to 107-101 area. Recent low was 106. YALE & TOWNE (36) At 1951 high of 48 stock had about reached objective. Th cp formed indicated 36-34. 1952 low was 33. There is possibility of a broad head and shoulders bottom pattern at 33-20-33, with an indication'of 66 fo1 lowed by 82. Recently held in 33-40 area. An upside penetration would indi- cae 45-51 over the intermediate term. EDMUND W. TABELL Jl11y 3. 1953 WALSTON & CO. Thl memorandum IS not 10 be construed as an offer or 50 licitation of offers to buy or sell any SeCUrities From time to time Wahlon & Co, r any artner thereof, may have an Interest ,n !orne or all of the securities mentioned herein The foregOing material has been prepo!Ired by U as a matler of Information, only II IS boned upon ,nformatlon believed reliable but not necessarily complete, n not guaranteed as accurate or final, and IS not Intended to foreclose Hldepenoent Inq\nry