Tabell’s Market Letter – May 03, 1963

Tabell’s Market Letter – May 03, 1963

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Walston &Co. —–Inc —– .l1(,111/(,I-' S('II' rill I. Stock E.rchall(l NEW YORK SAN FRANCISCO LOS ANGElES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 3, 1963 Last July. this letter discussed the importance of relative strength during a de- clining phase of the ma rket. We sa id – At this stage of the market pattern, relative strength can be a very important tech ni.cal. tool. Relative strength is the price action of an individual stock as compared to the averages. For example, if the average declined 10 and an individual stock declined only 50/0, that stock is showmg above-average action or good relative strength despite the fact that it has declined. Conversely, if the average advanced 10, and an individual stock advanced only 50/0, the relative strength of the individual stock is poor. Another, and simpler, approac is to select the stocks or groups of stocks that have held above a previous low despite the fact that the average reached new low territory. For example, the Industrial aver age reached a low of 564.23 in October, 1960, and then advanced to 741. 30 in November of 1961. The recent decline has broken below the 1960 low to reach 524. 55. The individual stocks or groups of stocks that have held above their own 1960 lows have, therefore, shown above-average action and their relatLVe strength is good despite the fact that they have declined in price. There is usually a good fundamental reason for this price action. The fact that these issues are meeting better support than the rest of the market usually indicates a nsmg earnings trend or better prospects or both. More often than not, issues showing good relative strength during a declme become the leaders of the next advancing phase. We felt that the ability of a stock to hold above the 1960 low in the 1962 panicky declme was quite important technically. It implied tha t these stocks might be a stage ahead of the general market and might have already formed a period. Now, over nine months later, how has this tlJ;ry We have Just completed a compilation of the largest and actively traded issues on the New Exchange. As of this week, 105 of these the 1960-1962 0k 0 hat includes most of ange and American Stock der 110/0, have reached new all- time high It is interestmg held above thelr 1960 lows m the mar 0 ese stocks were those wh.ich cl &)0 62. Of the four tl1at(hd make new hlghs despite the fact that they U. S. Smelting, is a proxy fight situa- tion and another, Ameri efuical, is being taken over by another company. The other 101 comp i 1 0 e 1960 lows in 1962. This worke v n' vidual groups. In the airlines, for example, six issues held above the 196010 ad' broke below. Included in the six that held are Delta, Nation Northwest, Pan-America d Western. All five of these have reached new high territory since 1956. Included i e group that failed to hold above the 1960 low are American, East- ern and United. These have SO far showed below-average actin. It is also interesting to note that of the 105 new highs, 66 of the highs,or 630/0,were contributed by only nine industry groups. There were 15 utilities, 13 oils, 11 auto and equipment, 6 natural gas, 5 airlines, 5 railroads, 5 textiles, 3 aerospace am 3 sugars. The re- maining 39 new highs were spread over 31 different groups. There were 51 groups in which no new highs were reached. In a sizable number of groups, stocks that broke below the 1960 ows are predominant. For example, all 9 major cement issues broke below the 1960 lows. The electronics group shows a similar pattern. Of 28 lssues, only 5 held above the 1960 lows While other factors must, of course, be taken mto consideration, ability to hold above the 1960 low has;' so far, been an important factor in stock selection. A list of 523 .' issues that held above the 1960 lows will be m the hands of your Account Executive shortly. This study strengthens our conviction that, while the market is in a broad accumulation area that will eventually result m much higher levels over the longer-term, there are not enough stocks with strong technical patterns at the moment to indicate a new roaring bull market at this stage. There is probably no great vul nerability in the general market pattern, ut more time is needed to broaden the base patterns in many individual issues. Concentration should be on these individual patterns rather than the averages. 2 p. m. Dow-Jones Ind. – 719.67 2 p. m. Dow-Jones Rails – 164. 60 EDMUND W. TABELL WALSTON & CO. INC. nWI ket Ictte! nol ,1111 untie no t,) he COI\tlllcd all lTel I ,,('II ,u tn 1,) .HI 'CCllI llle I efell ('.1 tu hCICIII The lntUllllllt.I)n 'untllned herein nut J,'lIlltantt'Ct\II to nCClIIlIC UI cmlllctcnc… nn.! the fUlllhhL11J,' theter … II' III1IUI1,II'1 n .'11 ((1I1,.,tllll ''' \-. \ he '''II\IIICfI a, 1\ 1'l'le,,('II\II. tHIn by \Vn1ston & Co, lnr 0\11 uf 1\11111011 nil' tl .h'll.e \\lthlIt 'JUlIn' & CIl, In( lind DlI,dn,' Rt.,khI,1,, ,I\l1 t,mp11v('!!'1 thcreof. ;clInllrl may h,,\c ,Ill Int'lct III the C,lIlltJC melli 11,,111(',111 Ih,,, mn'h('t i'tt. ,''' Intended 11\11 I'lc,,,nlcd me,ely II' ,I IH!!1cl,,1 Inform.1 rommentllly on dnv tu dllY mnrhe! news nlHI nut II a u,ml.lcle A1,I,I1I11,1I 111(1 m.,IIOn lth l'-'ICl'l I 1111\ '(,IIIIIIC'- lefCIIl'i1 tu hCICIIl \,ill he fUI rllheu uPUII \\ \ lUI A The following issues listed on both the New York Stock Exchange and the American Stock Exchange held within a point of their 1960 (in a few instances 1961) lows in 1962. This list does not pretend to be all inclusive but it probably contains the most important stocks on both exchanges. Abbott Labs ACF Industries Admiral Plastics Aerojet General Air Control Air Products A lco Products Aldens Allegheny Power Allen Industries Allied Chemical Allied Stores Alside, Inc. Amerace Corp. Amerada Petroleum Amer. Agric. Chern. American Bank Note Amer. Brake Shoe Amer. Can Amer. Chain Amer. Consumer Amer. Distilling Amer. Elec. Power Amer. Enka Amer. Hardware Amer. Hospital Supply Amer. Metal Climax Amer. Natural Gas. Amer. Optical Amer. Smelting Amer. Snuff Amer. So. African Amer. Standard Amer. Sugar Refining Amer. Tel & Tel American Tobacco American Viscose Amer. Water Works Ametek AMP Inc. Apollo Ind. . Archer Daniels Ariz. Pub. Service Armour & Co. Armstrong Rubber Arvin Ind. Ashland Oil Associated Dry Goods Associates Investment A tchison, Topeka & S. F. Atlantic City Electric. Atlantic Refining Aurora Plastics Austin Nic hols Avco Corp. Avis Industries Avnet Babbitt Babcock & Wilcox Baltimore & Ohio Bartons Candy Bayuk Cigar Beatrice Foods Beaunit Corp. Beech Nut Life Savers Belding Hem. Benefici3.1 Finance Bigelow Sanford Black & Decker Bliss, E. W. Bobbie Brooks Boeing Air Book-of-the- Month Borden Borg Warner Boston Edison Brach & Son Breeze Briggs & Stratton Bristol Myers Brooklyn Union Gas Brown Shoe Bucyrus Erie Buffalo Forge Bullard Bullocks Burlington Ind, Byers, A. M. Calgary & Edmonton Calif. Packing Campbell Red Lake Campbell Soup Canada Dry Canaveral Int'l Cap. C. Broadcast Carnation Co. Carrier Corp. Carrier & Gen. Caterpillar Tractor Celanese Cent. Ill. Light Chain Belt. Champlin Oil Chesebrough Chesapeake & Ohio Chicago, Milwaukee & St. Chicago, Rock Island Chock Full of Nuts Chrysler Cincinnat i Milling Cinerama CIT Financial Cities Service Cluett, Peabody Coca-Cola Colgate- Palmolive Collins & Aikman Colonial Corp. Colonial Sand Columbia Broadcasting Columbia Pictures Combustion Engineering Commercial Solvents Paul Congoleum – Nairn Consolidated Edison Consolidated Foods Consolidation Coal Consumers Power Continental Can Conthental Insurance Continental Motors Continental Oil Control Data Cooper Tire Copperweld Corn Products Coty, Inc. Creole Petroleum Crown Cork Crown Zellerbach Curtiss Wright Dana Corp. Dayton P & L Deere Delta Air Dentists Supply Denver Rio Grand De Soto Chem. Detroit Edison De VllblSS Diamond National DIsney Dr. Pepper Dome Mines Dome Petroleum Dominion Tar Draper Corp. Drilling & Exp. DuBois Chem. Duke Power Du Pont Duquesne Light. DuVal Sulphur DWG Cigar Dynamics Corp. Eastern Gas & F. Eaton Mfg. Elastic Stop Nut Electric Autolite Electric Bond & Share Electronic Spec. Emerson Electric Englehard Ind. Equitable Gas Ex-Cell-O B Factor, Max Fairmont Foods Falstaff Family Finance Fanny Farmer Federal Mogul Federated Dept. Strs. Helene Curtis Heller, Walter Helme Hershey Holly Sugar Holophane Home Oil Financial Federation Financial General Homestake Hoover Ball Bear First Charter Financial Houdaille Fischbach & Moore Fischer Port. Flying Tiger Food Giant Ford Motor Household Fin. Hudson Bay Mining Hunt Foods , Illinois Central Fram Corp. Inspiration Copper Friden, Inc. Insurance Co. of N. A. Fruehauf Trailer Inter. Business Machines Gabriel Inter, Harvester Gamble Skogmo Inter. Minerals & Chem. Gen. Amer. Oil Inter. Nickel General Cable Inter. Silver ) General Cigar Interstate Dept. Stores General Gas General Motors Jefferson Lake Sulphur Jewel Tea Gen. Public Vtil. Johnson & Johnson – General Steel Ind. Jonathan Logan General Tire Kansas City Southern Genesco Kawecki Chern. Gerber Kayser Roth Getty Oil Kellogg Giant Yellowknife Kendall Gibraltar Financial Kern County Land Gimbel Gould Nat. Batt. Grace, W. R. Granby Mining Great A & P. Great West Financial Great West Sugar Greyhound Grumman Gulf Mobile Gulf Oil Gulf States Util Gulf & Western Halliburton Hall Printing Hammermill Harris Intertype Harsco Kerr-McGee King Seely Klein, S. Klian, H. Koppers Co. Korvette, E. J. KVP Sutherland Lehn & Fink Libby McNeill Litton Ind. Lockheed Airc. Laews Theatres Lone Star Gas Long Island Lighting Louisville & Nashville Lucky Friday Louisiana Land Hart, Sch, & Marx Hayes Ind. Heinz, H. J. C Mack Truck Macy, R. H. Madison Fund Magnavox Magma Copper Mallory, P. R. Manning, Max Manhattan Shirt Marathon Oil Maremont Corp. Marine Midland Marshall Field Martin Marietta Masonite Massey- Ferg. May Dept. Strs. Maytag MCA Corp. McCord Corp. McCrory McDermott, J. Ray McDonnell Air McGraw Ed. McGregor, Don. McIntyre, Por. McKesson & Rob. McQuay Nor. !\lead Corp. Mergenthaler Lino Merritt Chap. Mesabi Trust MGM Middle South Util. Midland Ross Mission Corp. Mississippi River Fuel Missouri Pacific Mohasco Monarch Machine Monsanto Chemical Montgomery Ward Mueller Brass Munsingwear Murray Murray Ohio National Acme National Airlines National Biscuit National Can National Cash Reg. National Dairy National Gypsum National Linen National Rubber National Starch Na tional Video New England Tel. New Jersey Zinc Newport News Niagara Mohawk Norfolk & Western No. American Avia. No. American Car No Natural Gas Northwest Air Occidental Pete Oxford Paper Pacific Pacific Pete Pacific Tel. Paddington (A) Pan American Air Panhandle Eastern Parmalee Trans Peabody Coal Penick & Ford Penney, J. C. Pennsalt Chern. Penn. R. R. Peoples Gas Pet Milk Pfaudler Perm. Pfizer Phelps Dodge Rtiladelphia &. Read. Phillip Morris Phillips Pete Phillips Van H. Pillsbury Pitney Bowes Pittston Proctor & Gamble Puerto Rican Tel. Pure Oil Pyle National Quaker Oats Ralston Rayette Rayonier Reed Roller Republic Aviation Revlon Reynolds Tobacco Riegel Paper Rockwell Standard Rohr Ronson Royal Crown Cola Royal Dutch Royalite Oil Safeway Stores St. Louis S. F. SanDiego Imperial Schlumberger Scott Paper Scovill Mfg. Seaboard Air. Seagrave Sears, Roebuck Shamrock 011 Shell Trans. Signal Oil Simonds Saw Singer Mfg. Skelly Oil Smith, Douglas Smith, Kline & F. Socony Mobil Soss Mfg. Southern Cal. Ed. So. Puerto R. Sugar Southern Pacific Southern Nat. Gas Southern Railway Square D. Standard Brands Standard Financial Standard Kollsman Standard Oil of Calif. Standard Oil of Indiana Standard Oil of) N. J. Sterling Drug Stevens, J. P. Stewart Warner Stokely, Van Camp Storer Broad. Sub. Gas Sub. Prop. Gas Sundstrand Sunray DX Sunshine Bisc. Sweets Co. of Amer. Symington Wayne Syntex Talcott, James. Talon (A) Tech. Matei'ial Tech. Operations Texaco Texas East. Trans. Texas Gas Trans. Texas Gulf Prod. Texas Pacific Coal Texas Utilities Textron Thew Shovel Timken Roller Tishman Realty Torrington Tractor Supply Trane Transamerica Trans. West. Fin. Tri – Continental Udylite Union Bag Camp Union Electric Union Oil of Calif. Union Pacific Union Twist Drill United Aircraft United Artist United Biscuit United Fruit United M & M U. S. Freight U. S. Industries U. S. Lines U. S. Plywood U. S. Smelting U. S. Tobacco Universal Amer. Universal Leaf D Universal Oil Prod. Van Raalte Virginia Caro. Virginia Elec. Von's Grocery Vulcan Material Walker Hiram Wallace & Tiern. Warner Lambert Western Airlines Western Pacific Westinghouse Air Whirlpool Wickes Corp. Wilcox Oil Williams Bros. Winn-Dixie Wrigley, Wm. Xerox Zenith. …. ,

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