Tabell’s Market Letter – June 03, 1960

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