Tabell’s Market Letter – November 11, 1960

Walston &Co. ..;.,;..;;;..;,.,;; 1nc. Members New York Stock Exchange FILE COPY NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHlCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER November II, 1960 The stock market interpreted Mr. Kennedy's extremely narrow victory mar- gin as a favorable development and, after some slight uncertainty early Wednesday, the Dow-JOI.es Industrials advanced to an intra-day high of 614.09 on Thursday. Profit- taking on Friday's Armistice Day session brought about a mild correction. Volume indications were favorable with transactions moving above the four-million-share level on Thursday, and dropping to 2,730,000 on Friday's sell-off. Despite the recent happenings in the political, foreign and economic fields, the technical pattern of the market shows no great change from the analysis presented in our letter of October 21st. The downside potential' of the August f959January 1960- double top at 685 in the Dow-Jones Industrials indicated a decline to 578-550, after the 600 level was broken in September. A low f 565.49 was reached in September and tested in October at 564.23. It now appears indicated that the Industrial average reached its low for the intermediate term at the 565 double bottom. Any near-term correction would probably meet support around the 580 level. How much higher can the market move over the near term There is obviously a considerable amount of overhead supply between 600 and 645, an area in which the Dow-Jones Industrial average held from late January to late September, with the exception of the June upsurge. The present advance has pushed into the lower part of this overhead resistance to reach 614.09. The base formed at the 565 level does not indi- cate much higher at this time, and normal technical action would indicate the need of some consolidation and a broadening of the base in the 600-580 area. The Rail average which reached an intra-day high of 130.03 on Friday, has overhead supply at 132- 136. It is interesting to.note that the long downtrend mid-1959 top of 174.41, 'rtow stands at about 136. hl'be do average from the more recent January, 1960 top !lJverage from the the Industrial ow approximately 638 Regardless of the action of the 1 mar/.eM the ook for individual issues and groups-r.emains highly selective . icWa 'of-the-va-rious-groups can be broken down into several h st classification would include the groups that have acted the past year or so, regardle ket and have moved higher over in the averages. This classification would include, princ' Drink, Tobacco ' it' chInes, Food, Movies, Publishing, Soft 'ese groups still indicate an uptrend, they have reached a price Ie commitments. t er makeo them particularly attractive for new Of more im late importance are the groups that have, in the main, been in a downward or si ewise price movement for almost a year or more and have sufficiently attractive technical patterns to make them worthwhile candidates for price appreciation during 1961. Included in this second classification are Aircrafts, Fertilizers, Finance, Gold, Meat Packers, Natural Gas and Pipelines, Oils and Ship- building. In the oil group, the domestic oils appear to have the better technical pattern, The third classification are groups that have been in a downtrend for a long period and appear to have reached downside objectives, but have not yet formed base patterns. This basing out period may consume some further time. The groups that appear to be bottoming out include Airlines, Automobiles, Building Materials, Cement,Copper,Drugs, Machinery and Machine Tools, F'aper and Sulphur. The risk factor seems low in these groups and they should be watched closely for the start of an uptrend. The groups that are still weak and show no indication of a change in trend are included in the fourth classification Aluminum, Chemicals, Electrical Equipment, Electronics, Rubber, Steel and Railroads. Other groups have patterns that are difficult to interpret, but the compilation above covers most of the more important groups. From a tax-loss point of yiew, it would appear advisable to switch from the fourth group into the second group for intermediate-term upside potentials,and into the third group for longer-term holding. Ind. – 608.61 DonrTOnes BaUIi 1a9.46 EDMUND W. TABELL WALSTON & CO TNr ThiS market letter IS not, and under no circumstances IS to be construed AS, an ofter to sell or a soliCitatIon to buy any securities referred to herein The Illformntton , contained herein IS not guaranteed as to accuracy or cop1pieteness and the furnishmg thereof IS not, and under no Circumstances 18 to be qODstrued as, n tlon by Wnlston &. Co, Inc. All expresSIOns of OPInIon are subJect to change Without notice, Walston & Co, Inc and Officers, Directors, StockhoJders a d E I ees thereof purchase sell and may ha.ve an mterest in the securities mentioned herem, ThiS market letter IS mtended and presented merely as a genebi . wJ 301on day to day market news antJ not as a complete analYSIS Additional mformatlon with respect to any securitIes refeTred to herem …