Tabell’s Market Letter – May 24, 1963

W—a-lsItnocn.&–C-o-. Memhel. ,ve/(' York Siock Exchange FILE CfJ)PV NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFIces COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 24th, 1963 For the first time in twelve weeks, or since early March, the Dow-Jones Industrial Average closed lower on the week. Friday's closing level of 720.53 compares with the May 17th close of 724.81. The rise from the March intra-day low of 656.66 to this week's high of 728.76 has been an almost straight line advance. Normal technical action would call for a correction somewhere along the way. A normal one-third to one-half correction of the seventy-two points rise of the last twelve weeks would bring the Dow-Jones back to the 704-692 level. A small potential top around the 725 level indicates a possible dip to 695. The February high was 694. 27. At this stage of the market pattern, -the price action of individual stocks is much more important than that of the averages, and this will continue to be true for a long time to come. It is our opinion that the market reached a major top in November, 1961 and a major bottom in June a year ago. It is now in a broad reaccumulation range that will eventually result in much higher levels. However, more time is probably needed to complete the pattern. One-third of the market held above its 1960 low in last year's decline and this group is already in a major advance with still higher levels ahead. As noted in recent letters, the issues that fall into this category have been the leaders of the advance. Their own private bear market ended tn 1960, not 1962, and these issues are a year or two ahead of the balance of the market. They will, of course, require resting periods and are prob- ably in the midst of such a consolidating phase at the moment. Most of the market strength in the past month has in situations. while the leaders of the advance from the Cuban crisis lows have b n . eack and forth in a relatively narrow area. In the meantime, many in'n w irds of the list are slowly completing constructive patterns. Stewart i e pIe. It rallied moder- ately from its June low around 23 to a high of 30 an sf! most of the last of 1962 diverse action can be with rotating leadership following each technical deCline'iih'em s ; t remember is that the market is, in our opinion, in a broad reaccu ul i n d ce weakness should be welcomed as an opportunity to add to holdings 1 e . tions. In our last reco e d 1St, we suggested the sale of Chrysler at the 120 level. This objective was reached week on the split stock at 60. This issue was recommended a year ago during the y-June decline at the equivalent of 25-20 in the present stock. Chrysler has considerable long-term promise but has reached the intermediate term obj- ective on our technical work and probably needs a consolidating period. It is removed from the recommended list for the time being. Other issues in our list are approaching selling levels and, when sold, should be replaced with other issues with favorable patterns. The following issues fall into this cate- gory. We would prefer buying on moderate price declines. CLOSE QUALITY YIELD Copper Range Denver Rio-Grande Disney, Walt Kansas City Southern Pittston Co. Stewart Warner Storer Broadcasting United Fruit 22 3/4 22 3/8 35 1/4 451/4 67 1/4 35 1/2 41 28 7/8 B.B B A- B B B B 4.5 1.1 4.4 2.4 4.2 4.4 2. 1 Dow-Jones Ind. 720. 53 Dow-Jones Rails 170.93 EDMUND W. TABELL WALSTON & CO. , INC. This mnrket letter 16 not. and under no cu'cumBtances 18 to be construed BS. an offer to sell or n Boll(,'ltntion tn buy any sec\lrities referred 'to herem The infurmation cont.luned herem Is not j!\IRtantccd as to accuracy or completeness and the (urnu,hlng thel cor not, and untie! no ell cumo;tnnces is to be cum.h ued 8S. n. represent. tlon by Walston Co, Inc All expre'SlOnR of opinIOn are subject to chanJ.!e without not lee Walston Co. Inc. unit OfficcIII. Dhecttlls. Stockholders ann thereof, purchase. sell and may have an Interest In the secUrities mentluneri heteln ThiS market letter IS mtended and proented merely as a Iteneral. mformal commentary on day to day market news and not as a complete analysis. At.llhtlOnul illtol matlOn \\Ith tellect til nny seO-lHlties refellet1 to 'herem will be furnished upon request ,\ 301