Tabell’s Market Letter – April 15, 1954

( Walston &- Co. 11 MEtJBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND CQMtvlODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN fRANCISCO LUGANO (Swd,ld) OFFICES COAST TO eOAS; CONNECTEr. BY DIRECT PRIVATE WIRE SYSTEM TABELL'S MARKET LETTER April 15, 1954 The market continued its advance during the past week with the Dow- Jones industrials reaching new high territory at 314.41. The rails also showed improved action and, at the week's high of 103.91, the rail average was quite close to the February high of 104.50. There is considerable over- head supply in this section of the list, however, with rsistance in the 107-109 zone and again at the early 1953 top area of 110-113. The almost sixty-point advance of the industrial average from the September low of 254.36 has been quite steady and has had only minor interruptions or corrections. At no stage has the average had the noal minimum one-third retracement of the advance. In fact, Since September, the indus.tr.ialayerag,–,hasshown no decline of even ten points .Thefourqeclines since September were as follows From To – November 280.33 273.01 7.32 December 285.20 275.91 9.29 February 295.43 287.37 8.06 March 302.17 294.76 – 7.41 Rather than being concerned at the steepness of the advance, I am pressed by the great show of latent buying power.Of course,the market will always be subject to the type of.declines tabulated above,but my technical work shows no evidence of any Sizeable intermediate decline at this stage of the market pattern. ThiS, of course, does not mean that every issue will advance. ThA market will continue to be selective and some individual issues will continue to show below average action. I continue to advise concentra- ting on the action and outlook for individual issues. There are many that indicate substantially higher levels. The utilities still continue their slow advance. This group has been in an uptrend channel Since the 1949 level of 32. The average is now around 56 and the present outer limits of the channel are 51 and 60. The average individual issue continues to indicate moderately higher levels. The leaders of the group have been the utility companies in the rapidly- growing .South and Southwest terri tory. For examp le, Flopi-da Power -& -Light- has advanced from 18 to 44, Texas Utilities has advanced from 20 to 50 and Houston Lighting has advanced from 15 to 35. Over the longer term these issues will undoubtedly move higher but, from a technical point of view, they may require some consolidation at around present levels. West and Northwest utility companies also have a great growth poten- tial and a number of issues in thctt territory have very attractive technical patterns. The following four issues are of interest Price, 1953 Earnings Dividend Yield Idaho Power Minnesota PI' & Lt Montana Power Public Ser.of Colorado 49 23 34 34 3.35 2.04 2.62 2.34 2.20 1.20 1.60 1.60 4.6 5.2 4.7 4.7 IDAHO POWER is a hydroelectric company and prospects favor a continued growth in earnings and further dividend rises. The area served is primarily agricultural but mining, chemical, fertilizer and other industries are grow- ing. The proposed Snake River power project is pending before the F.P.C. The technical pattern indicates a long term level above 60. MINNESOTA POWER & LIGHT was split two-for-one late in 1953 and the dividend increased from the equivalent of 271 to 301 quarterly. The de- velopment oftacoQite ores and the trend of.diersification.of.industry lends long term appeal to this issue. MONTANA POltlER CO. has been helped by development of oil and gas acti- vities in thp Williston basin. Also increasing industrial activities lessen its dependence on the copper industry. The company is also developing its own source of natural gas mainly from Canada. The technical pattern is fa- vorable with a first objective of 40. PUBLIC SERVICE OF COLORADO provides electricity and natural gas in a territory that has excellent growth potentials. With earnings nd dividend prospects enhanced by recent rate increases, the stock has attraction for longer range capital appreciation. The technical pattern indicates an eventual objective of 40-45. EDMUND W. TABELL WALSTON & CO. ThiS m,) mh,c,mcofdannd'unml'leS1noItn 10 be some conslrued or ali o' f ff t as an offer o' soliCitatIon 0 0 Cf\ 0 Inc sccunhcl mel'll,oned hereIn The bI ur or toreqot,n ge II an I m(l Yrsle.IcJuh!n,lSl,Ubee1nFnr(lolpmre(lplnuddnrcc,d\ 1onboltimu,nseteCWnISdaedhdlemntolt&'!orrCecoolO,f HOInlrfo,arnnmdeaptpIeaonrndinreonrnlyt,hneq'uIcIloryrIS b,,d upon ,nfor'l1(lt,,,n beheyed rcl,ble but not necess(lrily complete, ,\ not gU(lr(ln cc d (I dc.cura C or' ,