Tabell’s Market Letter – July 05, 1963

Walston &Co. —–Inc —– .Vell/bel., Xell' York Siock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 5, 1963 After reaching an intra-day low of 698.86 on Monday, the Dow-Jones Industrials staged a quick turnabout and, at Friday's intra-day high of 719.02, had recovered over half of the thirty-five point decline from the early June peak of 732.97. At Monday's low, several of our shorter term technical indicators had almost reached an oversold position. Probably another testing of the recent lows is in order. The trading shelf of May-June between 732 and 708 will take time to penetrate. The downside implication of this area indicated a decline to the 685-675 range A further advance that failed to move above the June high could broaden this potential. All of the above, of course, relates only to the shorter term trend of the market. We see'no indication of a move of major-iffipQ';tance in direction in ftiture. The longer term pattern remains the same. In 1961-1962, the market was in a major distribu- tional area,and the basic policy was to sell on strength. The present technical pattern of the market is quite the opposite. In our opinion, the market is in a major reaccumulation area, and the basic investment policy should be one of buying on weakness. It will, however, be pointless simply to buy stocks indiscriminately. The reason for this lies in the rather unique character of the past few years in stock market history. Al- though the market break of 1961-62 was undoubtedly a bear market in the classic sense of the word, it was without precedent in the sense that a great many stocks had topped out long before the actual high in the averages — some as early as 1956. A good many of these stocks reached their lows in 1960 rather than 1962 and, by that time, had completed most of the reaccumulation necessary to embark on a major minority of stocks, the 1962 break was not a major bear market but an intermedi t t rCf ction. Likewise, any weakness that takes place at this time will, in and will present a major buying opportunity. q eon ort-term correction In addition to those equities which had 1960, the market action of the past year has enlarged the bases on still 0 r la group of stocks, and weakness at e e,of-a–reaccumula-tionarea. – -' Our recommended list to be in these two categories in con- trast to the majority of issues h stWiii the early stages of basing-out patterns. We would add to the teo i 1 U n weakness to the levels noted. Stock R Price Dividend Yield Buying Range Abbott Laboratories 97 2.20 2.3 87-85 Amerada Petroleum 69 2.00 2.9 62-60 Babcock & Wilcox A 57 1. 72 3.0 50 Cenco Instruments B 47 .50 1. 1 45-43 Clark Equipment A- 42 1. 40 3.3 40-38 Friden, Inc. B 36 .40 1. 1 32-30 General Cable A 51 2.00 3.9 48-46 General Electric A 80 2.00 2.5 76-74 Litton Industries B 75 stock 70-67 McGraw Edison A- 39 1. 60 4.1 37-35 Midland Ross B 66 3.00 4.5 63-60 Radio Corp. A- 71 1. 40 2.0 65 Southern Railway B 67 2.80 4.2 60 Stand. Oil of Calif. A 66 2.00 3.0 60 Swingline 36 1. 10 3. 1 35 United Airlines 38.50 1. 3 36- 34 In the lower-priced speculative category, we would include Hewlett- Packard Libby-McNeill & libby Pennsylvania R. R. Universal Match B BBB 23 15 stock 19 .25 1.3 18 .40 2.2 22-20 14-13 18 17-16 Dow-Jones Ind. 716.45 Dow-Jones Rails 174.75 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not. anti under no Circumstances .1 to be as, on offel tn ..ell 1)1 n 'uhcltatiun tIl hllY lin), ecUl itle.. l(rCII ed to hel eln The m(l mnthln ('t1ntained herein IS not Iotunrnnteed n to aceUl ncy or completcne-.s nnd the furnl!!hllll! lheleu( .-. liCIt, nnd un'CI 110 .. 1-. to be tnll-.t, ued n.., n rC!llc-.enh,- t!un by Walston & Co, Inc All uf opinIOn arc ..uhJcct to. chllllJre \\ Ithpul Wnlbton & Co, Inc Imd OffIC('I'lS, DlIcctt'IS, Stuckholder, IUlIl F,mpioyces therl'Of. plII'chase, sell and mny hllve an mtetest in the mc;ntlllncri hC(!11l lh. ma.l-.cl lettN I illtcndeunnd Ilret'cnted merely m. II f.,t'('IIClltl. mformll.l commentary all ony to da,. mnrket IIC…..J\ alld nut as n comllJete nnnly,ch Acl,hhHnul IIlfOi matlon \\ Ith ttl /lilY bCCUlltl('21 Icfciled tu helem Will he furnished upon request \\ '\ 101