Tabell’s Market Letter – September 10, 1954

I .. Walston &- Co. -' MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADelPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw ..d) OfFICES COAST TO COAST CONNECTE BY' DIRECT PRIVATE WIRE SYSTEM TABEll'S MARKET lEnER September 10, 1954 Despite the low volume, the advance from the 333.21 low established in the latter part of August has been quite impressive. The Dow Industrial Average has regained more than the normal one-third to two-thirds retrace- ment of the previous decline. It would seem that the next correction should hold above the lows of late August. However, as reiterated so many times before, the action of individual issues will be quite diverse. I visualize a Wide trading area over the near future with selective strength in the secondary issues and in the more specu lative stocks, and a further resting period for most of the higher grade ,share — … –….o; ,- ,,……… …–.-. Periods of market weakness should be used to add to holdings in recommended issues. Recent action tends toward the conclusion that the 335-330 area will be a strong support zone. It might be appropriate at this stage of the market pattern to revie the technical background of a portion of the issues in my recommended list. The balance of the list will follow next week. ABBOTT LABORATORIES (46) Appears to be slowly forming base in broad 40-49 area. There is strong support at 40-39. Ability to reach 50 would indicate 59-63,but there is supply at 50-55 that might slow action. ALLEGHENY LUDLUM S'I'EEL (35) Stock appears to be building a strong potential base in 26-39 area. Present upside potential is 45-60. There is supply at 38-42 that may slow action. ALLIED STORES (47) The upside penetration of the long 36-41 base indicates 55-65. Recent high was 48. Buy on moderate declines. There is support at 45- ALLIS CHALMERS (63) The stock has been in a slow uptrend channel since 1949. Present outer limits are 56 and 69. Recent high was 67. Buy on minor price declines. The long term objective is 90. AMERICAN POTASH & CHEMICAL B (58) This issue has a very bullish long term potential. The first objective appears to be 75-90 followed by a possible loB-lIB. Recent high was 61. Buy on all minor price declines. AMERICAN RADIi,TOR (191 The upslde- p-enetration oTtlfeeightyear.c61dbase – at 12-17 indicates an intermediate term 27 followed by a long term 40. There is temporary supply at 20-22 that may slow any advance. There is support at 17-16. Recent high was 20. AMERICAN TELEPHONE & TELEGR'PH (172) The intermediate term indication is 171-179 followed by a long term 200. There is support at 170-165. Recent high was 175. AMERICAN VISCOSE (36) Appears to be forming a base in the broad 31-39 ngel' More time and patience may be required. Present upside potential is 52-57, but pattern may broaden. BABCCCK & vnLCOX (59) The long term upside objective is 75-Bo. Nearer term objective was 61-65. Recent high was 65. Stock held in 65-59 range. Down- side penetration indicates 53-50 where stock should be bought. BLACK & DECKER (47) The upside penetration of the long 40-32 range indicates 45-51, followed by a long term 70-Bo. Recent high was 50. There is support at 45-43 where stock should be bought. BLAH-KNOX (23) Stock has formed a very strong base with an upside potential of an initial 30-35 followed by a long term 45-50. fiction so far has been slow but, from a technical viewpoint, this issue appears to be outstandinglY attractive. Recent high was 25. There is downside support at 21-20. BUCYRUS ERIE (30) Pattern is irregular but the long termindication is -33- 38 followe'd-by possible 42-44. There i-s -downside support at- 2B-27 . BURROUGHS (21) The-upside penetration of the long 13-lB range indicates 34-37 for longer term. Buy on moderate declines. Recent high was 22. There is support at 20-18. CELOTEX CORP. (22) Stock formed a strong base pattern in 14-21 range. The upside penetration indicates 29-31 followed by 3B. Recent high was 24. Buy on dips. There is support at 21-19. CERTAIN-TEED (19) Stock has built a strong base in broad 12-lB area. Upside penetration indicates 2B followed by a long term 38-41. Buy on price dips. There is support at 18. CHAIN BELT (41) Long term indication is 65-Bo. Near term indication is 41. Recent high was 42. Buy on moderate declines. There is support at 36-34. Tho, m4Y memor4ndum '5 l'Iot 10 be hot, an .nterest ,n some conlirUld or all of ,III an off.r or 01,(11,,1;01'1 of off,n to buy or 5.11 any 5e(;urot,el from time to ',me the l,cufll.u mentioned her'!n The fOfeQOlng mal,rial hal been prepared b, UI Wailion & Co; 0111 a matter 0 o.nrfoarnmya fartn., Ion on ,Ih.r,o!. y IS bled upon ,nrormahon belieed tell1ble blolt not necflarl1y complete, II not gU1fanteed U .(CloIr.t, or final, and II not intended to toredole ,ndependent InquirY .. ; , I , .( ..- ' -2- COMBUSTION ENGINEERING (52) Long term upside objective is 65-80. Near term objective is 52-60. Recent high was 58. Buy on dips. There is downside support at 50-47. CORNELL DUBILIER (27) Stock reached its first upside objective at early 1954 high of 32. Long term objective is 41. Has held in 27-31 area. An up- side penetration would indicate 35. There is downside support at 27-25. CRANE & CO (36) Stock has held in broad 2242 area for eight years with most of the time spent in 29-40 range. The minimum upside potential is – 5'761 with a-possIbl'e 'Il1aximumf-an-advanc;e-to-75-95-are-a7More-timeffiay -., be spent in this broad accumulation area but stock appears to be an out- standing vehicle for long term holding. The nearer term objective appears to be a possible 41-45. There is support at 31-28. DRESSER INDUST .. (31) Stock has penetrated the heavy overhead supply at 24-26 to reach a high of 32. The upside objective appears to be 44 followed by a possible 60-70. Buy on all dips. There is support at 27. EAGLE PICHER (24) Stock has held in 18-23 range for over two years. Upside potential is 25-29. Recent high was 26. The upside implications of the broad 15-27 area in which the stock has held since 1946 would be 40-45. ELLIOTT CO. (27) The long term indication is 50-60 but recent action has been poor. May be forming an intermediate term base in the 22-27 area. The upside penetration indicates 35-38 but action may be slow. There is support at 24. EL PASO NATURAL GAS (40) The upside penetration of the long 30-38 range indicates an advance to 49-51. Recent high was 43. There is support at 37-35. FLINTKOTE (32) Stock held in 22-33 area for five years. The upside pene- tration indicates 41-45 followed by 54-58. There is downside support at 30. FRUEHAUF TRAILER (27) Stock has held in 22-27 area since 1952. Upside pene- tration indicates 36-42. Recent high was 30. There is downside support at 27–25. ,-. – – – -.- , – — -; —,— ….— GENERAL RAILWAY SIGNAL (31) Stock held in 25-31 area. The upside- penetration would indicate 37-40 followed by a later 45, but there is heavy sup- ply at 32-36 that will slow action. Recent high was 34. GLIDDEN COMPANY (38) Stock reached both its downside objective and a strong support level at the 1953 low of 28. A base was formed in the broad 28-38 range. Upside penetration indicates 47-50. There is support at 38-35. !. GULF, MOBILE & OHIO (33) The upside penetration of the 27-31 range indi- cates 40-45. There is supply at 33-37 that may slow action. There is sup- port at 31-29. Recent high was 35. HEWITT-ROBINS (31) The upside penetration of the long 14-29 range indi- cates 53-58. Buy on all minor dips. There is support at 30-27. IDAHO POVIER (50) Stock has a very strong base pattern with an ultimate objective of 68. 1954 high was 57. Buy on minor declines. There is sup- port at 52-49. INDUSTRIAL RAYON (46) The upside penetration of the 39-45 base indicates an advance to 58–63. There is support at 45-43. JOY MANUFACTURING (33) The eventual outlook is for higher price levelS, but there is no indication of any immediate move. Can be held for income. An upside breakout of the 30-40 range would indicate 55 followed by 75100, but 'thIs move app-e-ars far-off. A15llityto reach 37 would' oe a very constructive signal. KENNECOTT COPPER (83) The upside indication was 80-84. The recent high was 87. Time will be needed to form a new pattern. No immediate indication. A base may build up in the 75-80 area. Buy on weakness. LEHMAN CORP. (39) The upside penetration of the 32-36 range indicates 46-48, but there is supply at 39-40 that may slow down advance. There is support at 36. LOWENSTEIN (38) The upside penetration of the 31-35 range indicates an initial 45 followed by 53-61. There is support at 35-33. EDMUND W. TABELL WALSTON & CO.