Tabell’s Market Letter – March 29, 1963

Tabell’s Market Letter – March 29, 1963

Tabell's Market Letter - March 29, 1963
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W—-a–l-s-tionnc–&—-C–o-. .11('m/wl's Xl'll 101 k Slock EJ'rilol1(J(' NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 29, 1963 FILE COpy Since early January the market averages have been swinging back and forth in a relatively narrow trading area. In terms of the Dow-Jones Industrial average, the range has been between the 1I1tra-day high of 694.27, reached on February 18th, and the low of 656.55, reached on March 1st. The question at the moment is whether or not this trad1l1g shelf is a prelude to a further advance into the heavy overhead supply area between 685 and 740, or a decline to the strong support area in the 625-580 range. On the favorable side, the present advance is still comparatively young. The 19531956 advance had a life span of 30 months, the 1957-59 advance lasted for 21 months, and theT960CfHrarlYhad-a tlme periodofabout 13 months. The present advance 6'om the June low of 524.55 is only 9 months old. Furthermore, in the three preceding advances the breadth-of-the-market indices began to show deteriorating action long before the actual high in the averages was reached. So far in the present market this has not yet happened. Our breadth indices continue to act like the market and, as yet, have shown no signs of deviation. On the unfavorable side, the Industrial average is approaching the maX1mum upside objective of 685-700, outlined by the May-June base. Furthermore, there is an extremely heavy area of overhead supply in the 685-740 range that will be difficult to penetrate It will also be noted that the time span noted above on the three advances since 1953 has been gradually lessening. If, as we believe, the market reached a top in 1961, it is probable that the life of the present advance will be Obviously, the trading area of the past 1tually be destroyed. In the event of an ups1de breakout it 1S difficult to a br advance in the averages. The heavy overhead supply between 685 and 72111 t to penetrate. However, an advance above the February high in ic t .s tin favorable action by ind1vidual ve-not'yet!'l!ached'the1lUpsideClbJect– LVes. Equally important, an the potential top pattern hat h Il t Ollie 3-month trading range would destroy would ind1cate that the distributi)J1al pat- tern will be formed at a iOO. . 1S, of course, would take further time and would allow individual is to their price objectives. If it turns ou hat ndustrial average reached its high 111 February at 695.27, the trading shelf of the three months is, from a technical viewpoint, a distributional top. The pattern pro ly is not complete, but a decline below the March low of 656 55 would indicate a downside potential of 645 followed by a probable decline into the 625-580 support area. From a longer-term technical point of view, this would be a very favorable development. It would broaden the base and indicate the possibility of an eventual advance well above the 1961 high of 741. 30. In summary, we believe – OJ That the market is in a broad consolidating area. On a long-term basis, bas1c investment policy should be to use this area to take major investment positions. (2) The consolidati..ngarea will probably con!inue for quit, some time at moment, we are near the top of this area. Basic policy, therefore, continues to be positive, but calls for buying On weakness to strong support levels in individual stocks. (3) During the con'solidation period, action of individual issues will be' highly diverse and extremely elective. It is, therefore, necessary to scrutinize the technical and fundamental outlook of individual securities in order to choose those in which long-term purchases should be concentrated, and those which should be switched into more favorable situations. Dow-Jones Ind. 682.52 Dow-Jones Rails 152.92 EDMUl\TD W. TABELL WALSTON & CO. INC. Thh 111.11 Jettel '''' nut al'Hl \lnl'k-, flO ell cum.,tnnce. 10 be con,tllle11 n …, nn (lITe! 10 ..ell U1 ,J lui1lli.llwll to hll) .III 'CCUllfH.. N!(et 1E'll1.. hel CIlI Th(' Inf, 111.1111'11 , lnt.lllH'd h('I('11I Il,.t J.,\I,'llInt('(',\ til ,IC(,llrncy.ol lotllpletcnl'-' /lud the fill 111… hlll.! th(1 ('uf I… n',1 .In,11II1IIel n, II' IIm ll1nc… b tll ,u'\I'II((l JI …..I l'IIn hv \\'.II … ton t… C .. In All C'IHCS'l.. r injn nlc .,lIhl(,t tn ,h.lll).!c \\lllwII\ Iltll' \\'111-,111 k e, hH , 111111 01\1('1' 'lIltl i'mpl(l\('C… Ih('r(..,f 1'1I11'h,\…e nml mny h,I\C nn Intel,''''\ In the cclIIHIc-. mcnllflc,1 h('IClll 'rht… mnlhl't Idl('t I… IlItI.ndCtI ,\lId Plfk-l.'lIt('\ m1'tc\) ,I' 1I ).!'C1WL,LI. l11ffll III III lIn dllY to, ,I,I 111111 \..('\ ne\\ … ,111(( not .1 ….1 lumpictc un.I!I … AtI,iltln,d IIlfHI lllollL1\ lilt I''''pe, I til ,II!I 'c 1I1111l' 'lrtl, (1 ttl helcll1 \\II! hI' fllllll … hfU l!Jllln 1'I)I1et \ \ ' 11)1

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