Viewing Month: June 1960

Tabell’s Market Letter – June 03, 1960

Tabell’s Market Letter – June 03, 1960

Tabell's Market Letter - June 03, 1960
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Walston &Co. FILE COpy Members New Yot'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER June 3, 1960 At the week's intra-day high of 634.33, the Dow-Jones Industrials were close to the top of the three-month 600-637 trading range. The downtrend line from the Janua high of 688.21 has already been penetrated on the upside, and ability to confirm this by a new three-month high would be a constructive development. The weekly figures on my breadth-of-the-market index are not available at this writing, but there was probably little change. There were more declines than advances on thefirst two days of the ab- breviated week, but Thursday showed a larger number of advances. The difference in all cases was relatively small. The selective action of the market was shown by well over fifty new highs and new lows for the year reached on each day of the past week. The same diverse action is shown by the action of some of the issues on my recommended list. MAGNAVOX (51 7/8).Originally recommended at 20, reached a high of 55 during the week. From a technical viewpoint, the stock has reached the lower part of the 55-62 upside potential. ELECTRIC STORAGE BATTERY ( 70 1/2), also reached new high territory at 71 1/4. This issue still has a much higher long term potential. FERRO CORP. (64 7/8), recommended less than six months ago at 44, has reached 65 1/2. Its upside objective for the intermediate term was 60-73. COCA-COLA (591/2), SINGER MFG. (663/4) and WESTINGHOUSE (60 1/8) have also reached new highs. In the lower priced category, DECCA RECORDS (31 3/8), recommended at 18, reached 33 7/8. Its upside potential is 38. On the other hand, some of the issues are ROYAL DUTCH (37 1/4) reached its downside potential 3 around the lows. . SUggested as a good buy at around present levels, although it may takea . e to 0 base. AMERICA VISCOSE (31 1/2) is already starting to form a pot n . I ba e may broaden. NATIONAL DISTILLERS (28 3/8) is almost and is near a good support zone. F DD R 17-22 range for over a year, is be . 0 k to or' ally recommended level which-nas heldlnthe- 0 tter technical action. DIVCO WAYNE (26), which has – over a year, begins to show some signs of a possible up U.S.F I ( announced that tn nt the recommended list at 31. It was recently a reed to a settlement of a suit brought by a dissident stockholder agains he co ny and Reynolds Metals. The stockholder had filed suit asking for 1e dissol and liquidation of U S. Foil. The proposed settlement in- volves several step and must be approved by the Chancery Court of Delaware and the stockholders of U. S. Foil, and possibly stockholders of Reynolds Metals. The settlement also depends on a ruling by the Internal Revenue Service as to whether the settle- ment will subject U. S. Foil stockholders to federal income taxes. If all these hurdles are cleared, the stockholder of U. S. Foil B will receive. 85 of a share of Reynolds Metals for each share of U. S. Foil B. At the present price of around 55 for Reynolds Metals, this would mean a dollar value of about 48 3/8 for U. S. Foil B if the settle- ment is finally accepted. Also on the recommended list is KAISER ALUMINUM (47 1/2) recom- mended at H. I suggest switching Kaiser Aluminum into U. S. Foil B. The gap between the dollar value of the proposed settlement and the market quotation will be closed when the terms of the settlement are finalized and approved. However, there is obvious risk terms will vary from those suggested above, but the risk is lessened by the spread of over 100/0 at present. '. In the event of any price unsettlement in the general market, would suggest the purchase of AMERICAN OPTICAL (56) in the 54-50 range, and DAYSTROM CORP. (47 1/4) in the 45-43 range. Dow-Jones Ind. 628.98 Dow-Jones Rails 139.66 EDMUND W. TABELL VALSTON & CO. INC. ThiS mnrkelletter lS not, anrl under no Circumstances IS to be eonstruC'1 as, an offer to sell or n soliCitation to buy any SlCuratlel referred-to hC1'(!1ll The mformation con tamed herem IS not gunrllntN!U 118 to uccuracy or completeness and the furnlshmg thereof 18 not, and under no CIrcumstances IS to be conqtrued as, a representa- tIOn by Walston & Co, Inc All eXpreSBlonS of oplnJon are subJect to chant'e Without notice. Walston & Co. Inc, anrl Officers, Directors, Stockholders and Jmllloyc(!'1 thereof, purchase, sell nnd may have an mterest In the aCC11TltlCs mentIOned herein 'fhlt market letter IS mtended and preqented merely as general. Informul commentary on day to da) market news and not as a complete nnalysls AdditIOnal informatIOn With respect to any securities referred to herem Will be furnished request' WN 301

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Tabell’s Market Letter – June 10, 1960

Tabell’s Market Letter – June 10, 1960

Tabell's Market Letter - June 10, 1960
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Walston &- Inc, Co . FILE &0('/ 1 Members New Y01'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 10, 1960 On sharply increased volume, the vow-Jones Industrial average early this week burst out of the 598-637 range in which it had contained itself since February. At Thursday's intra-day high of 663.64, it had already reached the lower part of the upside objectlve of this base which was 660 -680. The Rails lagged somewhat behind and at the week's high of 147.4.4 had still not reached the predicted 151-153 upside objective. Minor profit-taking set in on Friday and the Industrials closed lower on reduced volume. With the drastic change in the picture brought about by this week's action, it Is well to review the possible 'future course of the e quity 'market 'at'this time .. Two Important tools are used by the technician in his attempt to predict the future course of the general market. These are point and figure charts and breadthof-the-market studies. The former are used to gauge possible upside and downside objectives for market moves; In other words — to attempt to measure how far a move could go given the proper market conditions. Breadth-of-the-market studies, on the other hand, attempt to show when conditions are favorable or unfavorable by measuring upside volume vs. downside volume, number of advancing stocks vs. number of declining stocks and new highs vs. new lows. Thus, at a given time, the market may have a higher objective based on point,and figure charts, but poor breadth-of-themarket will make the analyst cautious about its future course. Conversely, good breadth-of-the-market may do much to negate a potentially unfavorable point and figure chart pattern. With this in mind, let us look at the stock market pattern over the past two years. In September of 1958, the Dow-Jones ew high above the triple top at 524 which they had made in ' e at that time to read two point and figure objectives. One, based (Qrf'Jihe 19 action, gave a poten- -weWd, 1956, gave .arJ.-object- ive of around 750. In late 1958 advance continued th rket advanced sharply and this '(b! t year, reaching a high of 680 (close to the first point and figure bj , However, starting in April 1959, a d ' s tetter to become extremely cautious and in January 1960, e 'i averages were accompanied by absolutely no improvement in a h, h' aution was carried to the point of suggesting that a cash reserve be es abl' . The action of the market in the early part of this year confirmE', that thi tion was well advised. Now that the trend has apparently been reversed, a new look at breadth is necessary. Again there are two possible upside potentials which can be read on a point and figure chart. The first of these, taking only the base formed since February, gives a possible objective in the 660-680 range. As noted above, this objective has already been touched. It is also possible to count all of the work done since September 1959. If this work is included, the objective for the Dow becomes approximately 750, confirming the more optimistic count of the 1956-58 base. Whether this objective is attainable will depend largely on the future course of breadth-of-the-market indices. ; i Some improvement was undoubtedly registered this week, although figures are not yet available. The ten-week moving total of upside volume will certainly show a decided increase, although it will be short of the January high. The weekly advancedecline index will, no doubt, also post a fairly sharp gain, although the final figure will again be under the high for the year. In order to predict a further significant up- side move, breadth would have to continue to improve. There would have to be more weeks of heavy upside volume contrasted with low downside volume, and there would have to be more weeks and more days on vlhich the number of 'advancing stocks significantly outnumbered the number of declining ones. If this type of action takes place, it is highly possible that the January high in the averages will be exceeded by an im- portant margin. If it fails to take place, and breadth again recedes, caution would once more be advised. EDJ\lUTND 1U TA BPI ,I, ri&Grw1nl1CtU8SnJrlGi IS to be construed as, an offer to 9'!II or a SOIiCIWrA The InformatIOn contnmed herem 18 not.,.uaranteed na to or completeness and the furnlshlng thereof IS not, nnd\tn1rer no Clrcumswnces 15 lob'e ns, n representn- oplnlOn are subject to change Without nohce Walston & Co, Inc, and OffIcers, Director'!, Stockholders nnd Employees ihereot. purcflllsc sell nnft may-'ave an mterest m the securities mentioned herem ThiS market letter IS mtended and presented mercly as a general. mformal on day to day market news an9 not as a complete analYSIS Addlhonal informatIOn With re'!pect to any sccuritle'! referred to herem WIll be . \\XJl f

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Tabell’s Market Letter – June 17, 1960

Tabell’s Market Letter – June 17, 1960

Tabell's Market Letter - June 17, 1960
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FILE COpy Walston &Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 17, 1960 A technical correction of the sharp advance of the previous week brought the Jow-Jones Industrials back to an intra-day low of 644.00 on Thursday. If the advance in the general market is to resume, support should be met around the 640-635 area. As has been true for a long time, the action of the general market has had little relationship to individual issues. Despite the decline in the Industrial average during the past week, over seventy new highs were reached on each of the first four days. Breadth of-the-market action has failed to improve, however. There were more declines than advances'on three of the first four days of the weeki and my low the high it reached in March. The action of this index must improve if the market i to have anything like a general advance rather than strength in individual issues. If breadth does not improve, the picture will suggest a technical pattern similar to 1956-1957 with a triple top at the September and January highs around the 685 level and whatever top is reached on this advance. Bxtremely selective action continues in the market as a whole, and this is also true of my own recommended list. A number of issues have about reached upside objectives. H.J. HElliZ (l05), recommended at 56, has an upside potential of 103125. It has reached the lower part of this area at the high of 106. Profit-taking is suggested in the 103-125 area as a lengthy consolidation period may be needed in order to form a new pattern. FERRO CORP. (64), recommended at 44, has reached a high of 67 7/8. The upside objective was 60-73. Would take profits in thi As a possible re- placement for these two issues I would suggest JOHNS 61) It has re- cently broken out on the upside of a trading rango/(Qf oy 0 ar uration and developments in asbestos and the new fiber tii interesting capital in the stock. A few strength-actlOn. -MONSANTO (43) ,- ongl in' ed by recent relative ecom aed-at-3-8; ing below average action recently t Ii ohns Manville or DAYSTROM CORP. (47) is indicated Daystrom entered my recommended list thi wee as a potential purchase in the June 3rd letter if it rea te 3 a. A low of 43 1/2 was reached because the company calle 1 debentures which caused temporary weakness. The outlook for t' anu rer of electronic control systems and electrical instruments is quit and the technical pattern is most interesting. KROGBR (33) was recently suggested at 35, but its relative strength action has been poor. Suggest a switch into BESTWALL GYPSUM (47), which is part of my recommended list. See letter of May 6th. CONSOLIDATION COAL (32), recommended at 36, also looks as though it would show little upward price movement of importance. Bestwall Gypsum appears more attractive for capital appreciation. The relative strength ratings of the various groups has not changed materially from my letter of April 22nd. Groups acting better than the market continue to include drugs, electrical equipment, electric utilities, electronics, office equipment, packaged food, roofing and wallboard, soft drinks, tobacco and -variety ch-ains. Grocery chains, which were in this uptrend group, have shown slightly deteriorating action and the group is now questionable. The groups in a downtrend relative to the market continue to include aircraft, air transport, auto, chemicals, copper, oil, paper, railroads, steel and tire and rubber. Of these groups, aircraft and steels show some signs of improving action and could be placed ina neutral category. Machinery, which had been neutral, has return(;d to unfavor- able. In the smaller groups, best relative strength action is shown by air-condi- tioning, baking and glass. Neutral action is shown by fertilizer, finance, natural gas and sulphur. Below-average action is shown by brass, coal, gold mining, liquor, sugar and textile. FDIVjITND 3M TA BET ,I, un e c mstnnces IS to be constiUt.'1. as, an ofter to sell to herein The Information . Vt tl'iJrI''1'i1WMIIQX;1'41''CoJ,''.fna- .eJ B4 totf)!ctt;'dOy or completeness .nnd the furnishing thcrcofts.tRtt;'–k6ctu)(dH 'dr opmion are BubJect to chn.ngc notlC(' Walston & Co, Inc, and 1b be construed as, a representaOfficers, Directors, Stockholders and dnyEmployees thereof purchasc sell and may ha\'c an interest m the SecUrltlCS rncntlonca herein. ThiS market letter 18 mtended and presented merely as a general, commentro.y on to day market news nnq not as n complete analysis. Additional mfOrmatlon wIth respect to any securities referred to herem . . . .. , .. . .. —

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Tabell’s Market Letter – June 24, 1960

Tabell’s Market Letter – June 24, 1960

Tabell's Market Letter - June 24, 1960
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FILE COpy Walston &- Co. Inc —,;..; Membe,'s New YO!'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CKlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER Jun 24, 1960 At Wednesday1s intra-day low of 639.22, the uow-Jones Industrials had re- acted twenty-four points from early June high of 663.64. This is approximately a one- third correction of the sixty-seven point advance from the May low of 596.61, which is normal technical action in an advancing phase. Furthermore, the retracement has carri d back to near the top of the three-month 637-596 range which should furnish a good suppo t level. So far, the technical action of the averages has been normal, but there has as yet been no confirming signal by my breadth-of-the- market studies. The index has so far failed to better the March high and is way below the high level reached in April, 1959. However ,it'has declined very little in the past two weeks and is only a short 'distance from the March high. Regardless of what the stock market does over the next few weeks, or few months, the general outlook for the long term, i.e., the next five to ten years, remains the same. An understanding of this outlook is obviously important to the intermediate term trader or speculator since, to a great extent, the general market outlook will de- termine the type of security he wishes to own. For this reason, a few obvious truths about the long range prospects for the stock market bear restating at this time. The easiest way to view the prospects for the equity market over the next ten years is in contrast to the past ten. The last decade started at a time when stocks, in general, were more undervalued than they had ever been in previous history. It was only logical that this undervaluation should be corrected and a large part of the 1950l s was spent correcting it. Thus, from 1947-49 to 1957-59, the Dow-Jones Indus- trial average increased some 200, based on its 'e two periods. Earnings, however, increased only 53, an average a 1 r f growth of some- thing under 4 1/2 compounded. This was a rewarding to those who were perceptive enough to 0 e s d ved extremely gni th rrific undervalua- tion which prevailed in the equity market ar only trouble is that it – cannot-be-expected to go on – – – — -, —- The realization that the' f an e chip stocks had gotten rather out of line when measured thinking of investmen mana r eAA'iization accounts 'n i has slowly crept into the r second half of the last decade. This real- t ather desultory performance of such former favorites as Du. t rs, International Paper and Standard Oil of New Jersey over the pa f w s. The new favorites became the super-growth stocks, w1-ich, it is r ned, are going to exhibit earnings growth far outstripping that of the econom ver the next decade. The growth prospects in these issues, it is argued, warrant the payment of an extraordinary premium over their value based on current earnings. There is absolutely nothing wrong with this theory when applied to, say, Texas Instruments, where a lead in development and research assures terrific expansion in earnings over the long term. It becomes a little ridiculous, however, to start applying the same multiples to every operation that starts out with an M. I. T. graduate and a few coils of wire and puts the magic word electronics in its name. All of the above allows us to draw a few conclusions as to the general climate of the equity market over the next few years. (1) In conspicuous contrast to' the last decade, it will not be easy for the unsophisticated investor to amass large capital gains. (2) It will not be possible to follow the old saw buy good stocks and hold them. This policy worked wonderfully between 1949 and 1956. Its recent results have been disappointing and will continue to be so. The Dow-Jones Industrial average,composed largely of blue chip companies,will,five years from now,probably be within 20 of where it is at this mome!'t. (3) Investment success will be attained by continued seeking for companies which will grow faster than the economy as a whole. For those companies where growth is assured, the payment of a premium is undoubtedly justified. However, in many cases, equally good opportunities will be found in companies where no premium need be paid and where growth prospects have not yet been recognized by the market. no w-Jolle s fncl. jr. T 1 1li.1S !(!.tj;er is nil undr Is to he construed as, an offer to sell or a EDMUND W. TABELL Uri, T ,.,.,rYI\T ., ,., r. T1\J r' herein. The mformntlOn or completeness and the thereof IS not, and uniler no Clrcumstances 18 to be construed as, a representn- bon by \'i.'alston & Co. Inc All cltpresSions of opmion are subJect to change 'Hthout notIce. Walswn & Co. Inc. and Officers, DIrectors, Stockholders and h\nUr,fffli.tJw.rN, purchase, sell and may have nn mterest in the SCCUrlticz; mentJOnoo herem Th1S market letter lS intended and presented merely as It !Zener!ll, mfo'ffndl t51rlrhMrl..ary on dny to day market news lind not as a complete analYSIS Add!tlUnal mformatlon With respect to any Rccurlbcs referred to herem will he furOlshcd. request. . . WN 301

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