Tabell’s Market Letter – August 12, 1960

– FILE COpy Walston &Co. ..;,;..;,;.;;.,;; Inc Members New Yo,.k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CH,/CAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 12, 1960 With the assistance of a reduction in the discount rate by the Federal Reserve Board from 3 1/2 to 3, the Dow-Jones Industrial average moved above the post-margi reduction intra-day high of 622.37 to reach a high of630.53 on Friday. As mentioned in last week's letter, this indicates, from a technical viewpoint, that the market is now in an uptrend of at least intermediate term proportions. The potential base formed by the triple bottom in the 600-597 area in March, May and July, has been enlarged to a potential 700-720, or an advance of 12-15. As for the rails, I mentioned that the Dow- Jones Rail average had a downside potential of 137-133. ,Last week's low was slightly c below that projection at 131.85, but the downside objective of 29 on the Standard & Poor's rail index was just about reached at 29.29. The upside potential on the Rail average is difficult to ascertain at the moment. There is overhead supply at the 136-147 level and it is probable that the average will spend quite some time in that area. Breadth-of-the-market has improved considerably. There were more advances than declines every day this week. On Tuesday when the Industrial average closed only 90 higher, there were 599 advances and only 368 declines. The figures on my weekly breadth-of-the-market index are not yet available at this writing, but I believe the index is quite close to the March high. This indicates a broadening out of the market and the probable emergence of new group leaders. Among possible leaders are aircrafts,air- lines, coppers, natural gas, oil and steel. As I have noted in the past, in the final stage of a bull market lower priced issues tend to perform better than the general market. This letter has published a package recommendation of low-priced stocks on was stressed that these issues be bought as a package in diversification in a speculative list of this lists have so far acted just about the same as the , occmons in the past. It d r 0 rGWide the necessary a j r mmendation e up and some down, butif the ull market is not yet d is could .relatively better actlOn than the market. -The 11st bel r 11g ferent than-the 11st of' February 26th as some issues like e graduated out of the below-20- a-share classification and recommended list. I have entcod a re S g 1959 Earnings Indicated Dividend Yield Allied Paper 1.62 – Avco 1B .93 .50 3.1 Chemway 1 B- .4.0 .40 4.0 Curtis Publishing B- .65 .35 3.2 Fedders Corp. 18 B 1.57(1) 1.00 5.5 Getty Oil 15 B .67 (stk) – Home Oil A 10 C – .37 .25 2.5 Hotel Corp. 5C .03 – – Intern'l Packers 13 B- 3.11 .60 4.6 Kaiser Industries 10 B- .61 – – Lear 20 B- .91 .40 2.0 National Can 8 B- .24 (stk) – Northwest Airlines 19 8- 3.68 .80 4.2 Oliver Corp. 20 1.39(2) .60 – 3.0 Pacific Petroleum 11 Publicker Ind. 11 Rayonier 17 RohrAircraft 15 Servel 13 United Industrial 9 None C B None C None – .48 – .61 2.35 1.40 1.26 (2) – .75 (stk) .80 1.00 .20 4.7 6.6 2.2 (1) Year ended August 31,1959 (2) Year ended October 31, 1959 Dow-Jones Ind. 626.18 EDMUND W. TABELL WALSTON f…. CO. INC. Dow Jones nails 198. 95 . hf t ThiA market letter is not, and under no ….. r.(.ez9 to be construed ns, nn offet to sell or a sohcltntlOn to buy any SecUrities referred to herem. T e In orma lOn contamed herem IS not guaranteed us to accuracy or completeness and the furnlshlrlg thereof lS not. and under no Clrcumstances lS to be construed as, a representa t on by Walston & Co Inc All expressIOns of opInion arc subject to change wIthout notice Walston & Co. Inc, and Offlcers, Dlrectors, Stockholders and Employees thereof, sell and may have an Interest m the secuntles mcntlOned herem ThiS market letter IS Intended and pr.csented merely as a general, mformal commentary on day to day market news amj not as D complete analYSIs Additional mformatlon wIth respect to any securIties referred to herem