Tabell’s Market Letter – August 07, 1953

Walston &Co. MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (SwHwld) OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lETTER August 7. 1953 The marKet continued its favorable action over the past week, Earlier in the week. the pace of the advance became a bit too rapid and. at highs of' 277,19 for the Dow-Jones industrials and 106,45 .for the rails, the mar'' ket was temporarily overbought, A couple of days of mild decline and conso'- Itdation proved to be sufficient technical correction and, by the week-end, the averages were back to highs of 276,54 and 107,36, The action of the I'Iils is of particular importance at this pOint in the technical pattern, 't'he rail average has two important price barriers that must be sUI'!!Iounted, 'l'iley are the early July high of 108,34 and the May high of 109,21. Ability tc' push th'ough these levels would most likely indicate an advance to above ..the December. 1952 high of 113,94, Failure of the rails to penetrate the July and May highs oirer the next week would be discouraging technical action for this important group, JI1y thoughts on the market .remain the same, I expect the present inter- !l!.ediate teI'lll advance to continue through August and possibly into September'. '1;he industrial average will most likely advance to at least the 285 level a.nd the rails might reach new high territory, However'. I do not believe that the present advance is the start of the b!.g upward move I expect to start in 1954, More consolidation and re-adjustment similar to what we have wit- r.essed over the past two yea's is needed first,Therefore. some profit-taking will be in order when the pres.ent'intermediate term advance shows signs of sIackening, 'rhere are no signs of this yet, I have just finished a new summary of Technical Patterns on Secondary StoCKSi'. Covered .n it are th.e technical market indicaGions on some 600 ,mllmon stocks that are generally considered below investment quality, There a.re a large number of issues that have relatively unfavorable technical pat- te-rns in the sense that the;)! either indicate lower levels over t.he longer teI'!ll or else show little indication of worthw'hile pI'lce movement over the fOl'eseeable future. A numbel' of issues of thls type are listed below Price Pice Price A, C. F. Brill 5 Adas Millis 32 A.laska .Tunea1. 3 Allied Mlls 26 .ilJ.l!er,Export Lines 15 er. Locomotive 16 Argo Oil 19 ;l('tloom Carpet 8 .Ashland Oil 15 Babbitt 6 Baldwirt-Lima 10 Barium Steel 7 Be.st & Co, 26 Budd Company 14 Ce,1tral Agurre 20 Chickasha Cotton 11 Clopay 3 Consol,Copperm.ines 8 Cont,Diamond Fibre 13 Ceo Press 9 Dalfega Stores 7 Daystrom Diamond T Motor Divco Corp. Florence Stove Follansbee Steel Foster Wheeler Gimbel Bros. Gotham Hosiery Ha'bison Walker Hecht Co. Holland Furnace Holly Sugar Lehigh Yalley Coal Mack Trucks Macy. R. H, Madison Sq.Garden Missouri-Kan,Texas Nat'l Container Nat'l Malleable Nopco Chemical Packard 14 11 8 19 14 17 15 7 26 26 15 17 8 11 23 8 6 10 32 17 5 Peabody Coal 5 Pfeiffer Brewing 18 Poor &.Co, 15 Reo Motors 19 Reynolds Spring 7 Royal Typewriter 17 Seiberling Rubber 10 Simonds Saw 40 Smith & Corona 18 Spencer Kellogg 15 Std ,Railway Equip, 12 U. S. Tobacco 19 Vulcan Detinning 17 Walgreen 26 Warer Hudnut 17 Wayne Pump 10 West Virginia Pump 15 White Sewing Mach. 9 Young Spring &Wire 26 Youngstown Steel Door 13 I would sell these issues on strength and purchase issues with clearer teJhnlcal indications, In the very low-priced category. Alleghany Corp (4). Fmerican Encaustic Tiling (7), Raytheon (11). appear more attractive for capital appreciation than some of those listed in the table above. In the lLIediU!ll.-lriced group I suggest B1aw-Knox (19). Beaunit Mills (19). Elliott Co, (27). National Gypsum (21) or New York Air Brake (20) . Only a limited number of this study is printed and it is not available for public distribution. Visit your nearest Walston office. They will have a copy on file, EDMUND W. TABELL WALSTON & CO. Thh memorand.l,lm Is t to be construed as an offer or solicitation of offel's to buy or sell any seCUrities From time to time Walston & Co, or any partner thereof, may have tin rnterest In some or !III of the securities mentioned herem The foregOing matenal has been prepared by us as a matter of information only It IS base! upon Information believed reliable but not neceuardy complete, is not guaranteed as IlCcurate or final, and IS not Intended to forecl05e Independent Inquiry