Tabell’s Market Letter – April 08, 1960

Tabell’s Market Letter – April 08, 1960

Tabell's Market Letter - April 08, 1960
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– FILE Walston &- Co. —–Inc —– Membel's New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHJCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 8, 196C The market advanced for the first four days of the week and, at present writing, is only fractionally lower today. At Thursday's intra-day high of 634.08, the Dow-Jones Industrial average was close to the late February high of 636.30. Ability to better this high would be a constructive development. The Rail average, at Thursday's intra-day high of 146.06, was quite a bit below the comparable February high of 152.66, but the rails are close to breaking a downtrend line that has been in effect since the January high of 161.00. Ability to push above this downtrend line would also be a favorable technical development. However, only a relatively small base pattern has been form'ed so In the Industrials, the upside potential appea.;s to be 65(f to 660 and'the-Rails would meet heavy overhead supply in the 150-160 range. It would appear probable that a broadening of the base somewhere along the line is needed. It is entirely possible that broadening could take place at a level conSiderably above the lows of 603.34 and 596.20 in the Industrial average reached in February and March. The action of my breadth-of-the-market Index is much more important, in my opinion, than the action of the averages. This Index showed very poor technical action late last year and made this letter extremely cautious at the January high. This Index has not yet reversed its downtrend, but is very close to doing so. For the first time since April, 1959, this Index is moving ahead with the market. It reached its high a year ago and turned down five months before the market reached its high in August. Previous to that, the Index turned upward in January 958, some four months before the broad advance started in the general market. At the moment, the Index is at the same point where it was at the late February high in the s mI'average. Ability of the breadth-of-the-market Index to better its last high oul ' i6ate a broadening interest in the market and a probable trend it intermediate term studies of breadth-of-the-marke, ch v te term. Other e and advances- decline ratios, are showing signs of pr ' a' ,although no definite signals have been given. On the I tota or-examllle, downside'volume did not equal the volume in the r k, the number of declining stocks was smaller – which would the inability of upside olum 0 volume started to in r 'n The unfavorable factor was ah&t,- indicating no buying interest. Upside ear the level reached in December. Ability to move above t The recen nother constructive development. kn m INTERNATIONAL PACKERS,LTD .. on our recom- mended list, has occa' ed a good deal of comment. The apparent reason for this weakness would se to be the result of the recent Argentine election in which the incumbent party of President Frondizi was roundly trounced. The actual effect of this development on International is rather difficult to assess. While it is true that the Frondizi government lost ground in the election, it still retains a parliamentary majority. Thus, in the two-year interval until the next election, it will be free to pursue its current policy of encouraging foreign capital investment which, in the eyes of many observers, has largely restored the health of the country's economy. At the end of this two-year pe riod, the government may well have gained back a good deal of the popular support lost in the last election. Meanwhile, the stock has not lost a bit of the speculative merit which caused our original recommendation. The Argentine cattle population, allowed to decline under the Peron regime, continues to increase and, in some two years, the rate of slaughterings should jump sharply above present levels. Thus, the leveraged earnings of IPK could show a substantial increase. Considering the fact that it is now selling at some five times last year's earnings of 3.11, the impact on the stock of such a rise could be substantial. Obviously, some speculative risk attaches to the stock due to the political situation, but for those who can afford this risk; the stock is rerecommended for purchase at current levels f 16 1/2. Dow-Jones Ind. 628.10 Dow-Jones Rails 144.96 EDMUND W. TABELL — WALSTON & CO. INC. Thl'5 market letter IS not, and under no Circumstances IS to be construed us, an offer to sell or a solicitatIOn to) buy nny securities referred to herem The Informntion contmned herem IS not gUIllnntced as to accuracy or completeness and the furnlshntg thereof IS not. and under no Circumstances is to be construed us. a representa- tion by Walston & (J(). Inc. All expressions of OPIniOn arc subJect to chanp;e Without notice Walston & Co, Inc, nnd OffIcers, Directors, Stockholders and Emplo)-Ci!s thereof, purchase, sell nnd may ha\c nn mterest In the securities mentioned herem This market letter IS mtended and pr;esented merely as n general, mformal commentary on day to day market news and not as a complete analYSIS Additional mformatIon With respect to any securIties referred to herem Will be furnished upon r C Q u e s t . . ..

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