Tabell’s Market Letter – May 03, 1965

Tabell’s Market Letter – May 03, 1965

Tabell's Market Letter - May 03, 1965 page 1
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Walston &Co. – Inc – – – – – INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New -York Stock Exchange and Other Principal Stock and Commodity Exchange. TABELL'S MARKET LETTER OFFICES COAST TO COAST AND OVERSEAS May 3, 1965 The Dow-Jones Industrial Average reached a new intra-day nigh at 925.42 on Friday, but volume declined as the week wore on. At the week's high, the averages were very near the 928-930 level previously mentioned by this letter as the upside potential of the February March consolidation area.lfutb.e;'pa-tte.rn, which has prevailed for the last 17 months continue the recent strength will be followed by another consolidating area, formation of a new short term base, and a move to new high territory. At the present moment, it is difficult to en- vision much higher than the 928-930 area before a new base forms. The short term down- side support area is at the 905-900 level. Present indications point to continued upward selectivity within a nar- . row trading band. -The uptrend linesOnOurvarious techniCal indica to rs through tlie -Cuban – crisis and Kennedy assassination lows are still intact, although the market has undoubtedly reached a rna ture stage and must be watched closely for signs of loss of momentum. No such signs have yet appeared. At various stiges of the upward move from the 1962 lows the have been preliminary signals of minor deterioration, but the market has done a remarkabl job of internal technical correction and has not yet given a warning signal despite 'the fact that, recently, there have been a few signs of possible deterioration. For example, volume on the recent rise has failed to equal the volume at the February peak. Volume usually tops out before the market reaches its actual high. Also, the action of the other ave ages indicates some signs of divergence. The Rail average, despite the new highs in the In- dustrials, has failed to better not only the March high of 217. 63, but also the October high of 226.39 made over six months ago. The Utility a fractional new high, but its action has been sluggish rec tl managed to reach hts week's intra-day low of 160.85 is quite close to the three-month low e wever, are only preliminary indications and could easily change. Lo Olftm e action remains con- structive and indicates the continuation of a selectiv anc Selectivity in the market is well t e 'ce action of our recommended -'Fher-e is the Quality and Long preciation group consisting 0 e' of issues of high quality, the Price Ap and a Low- Priced Speculative group. In 1962, when this lette was confined to th iY m bullish, a large portion of our recommended list n n erm growth sector. Until late 1964, this was the group that showed t a t e appreciation. We have been gradually eliminating issue in this group from ou ended list and at the moment there are only 7 issues in this group out of a total of ince the first of the year the Dow has advanced about 5, but the 7 stocks in our Qualit list have averaged a gain of only about half of this amount. On the other hand, the 49 issues in our Price Appreciation group have shown an advance approxi- mately three times as great as the Dow, and the price appreciation of the 15 stocks in the Low-Priced Speculative group has been roughly five times greater than the Average. These figures are preliminary, but the actual figures will be available next week. Obviously, these figures indicate an increase of public participation in the market and a lowering of the qual- ity of the advancing stocks. The market, however, has not approached the sort of overvalua- tion of lower-grade equities that existed in 1961. A new Recommended list will be in the hands of your Account Executive next week. We are making a number of changes. In the high quality group we suggest switching Amerada (78 5/8) into Aluminum Co. of America (71 better intermediate term action. is a high-quality issue and will probably show excellent long term growth, but will probably be slow over the nearer term. The Aluminum group has shown much better technical actiorl\ recently and Aluminum Co. of America is the quality issue in the group. It sold at over 130 in 1956. We also suggest taking profits in Rayonier (41 7/8) in our Price Appreciation list. This stock has performed remarkably well since our original recommendation, but nowshow some signs of loss of momentum. As a replacement we suggest Revlon (45 1/8), a leader in the cosmetics and toiletries field. It sold at over 80 in 1961 when earnings were lower than those of today. Also, we have lost patience with Sperry Rand and are removing it from the list. Over the longer term it has appeal and can be held by patient holders, but we see no indication of near term action. Better speculations, in our opinion, would be Audio Devices (14) Great Western Financial (.11..3).4)..a.nd Microwave (10 1/8). All of these three issues are al- ready in our recommended'-lisURevlori will be reviewed in more detail shortly. Dow-Jones Ind. 922.31 EDMUND W. TABELL Dow-Jones Rails 212.63 WALSTON & CO. INC. This market letter is published for your convenience flnd mformatlon and IS not E1n oft'er to lieU or It solicitation to buy Rny IIUrlties dl.scussed. The information was obtamed from sources we txheve to le reliable. but we do not guarantee Its RccurElCY. WEllston & Co. Inc E1nd Its officers. diretors or emJ'loyees may have an Interest in or purchase Rnd sell the securities referred to herem Walston &- Co, 1nc INveSTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Slock Exchange and Other Principal Slock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS EDMUND W. TABEll'S RECOMMENDED LIST May 3, 1965 . . This edition of our Recommended List gives long term technical upside objectives and level.s in cases where such levels exist. An asterisk in the Upside Object- lVe column mdicates elther that the objective is unclear, or that the stock has not yet broken out of its base formation4tllmL QUALITY & LONG TERM GROWTH Close Qual- 4/30/65 Alum. Co. Amer. 71 7/8 B Amer. Can 473/4 B Gen'l Elec. 1041/4 A Gulf Oil 55 1/4 A Upside SupObj. port 65-60 130 90 66-92 50-45 Close Qual- Upside 4/30/65 Obj. Norfolk & W. 131 A 155-170 Reynolds Tob. 42 3/4 A Royal Dutch 41 3/4 A 86 Support 125 39-35 PRICE APPRECIATION Close Qual- 4/30/65 Atchison, Top. 33 A- Beaunit Corp. 43 1/4 B Cenco Inst. 343/4 B Clark Equip. 56 A- Clevite 485/8 B Cluett Peab. 72 1/2 B Copperweld S 68 1/2 B Crowell Coll, 343/4 B Denver, R. G. 20 5/8 B Disney, Walt 55 B Eaton Mfg. 541/8 B Elec. Stor. B 52 1/2 A- El Paso N. G. 21 1/2 B First Charter 23 3/4 Fruehauf Corp. 34 B Gen'l Dyn. 42 1/4 Hewlett Pack. 25 5/8 B Illinois Cent. 50 7/8 B Int. Min. Chern. 56 1/8 A- Kansas City S 41 1/8 A- Koppers Co 68 5/8 B Korvette, E. J. 46 7/8' B Litton Ind. 88 3/4 B Lykes Bros. 22 1/2 B McDermott 41 7/8 B Upside SupObj. port 46-52 28 57-60 42 60-84 50-45 57-100 92 70-94 45-58 30-28 28-43 65-100 78 56-80 25-34 56-84 78-114 40 80-100 60-80 96-128 32-60 20 48-80 Close Qual- Upside 4/30/65 i!L Obj. McGraw Ed. 681/8 A- 70-80 Mesabi Tr. 13 7/8 22 MGM 42 3/4 70 Metromedia 39 B 64 Newmont M 557/8 A- 62 N. Amer. Car 32 7/8 A Raytheon 22 7/8 36-38 Revlon 45 1/ 8 A- Reynolds Met. 42 1/8 B 51-80 Riegel Paper 21 7/8 B 34 Schlumberger 761/4 A 90-130 ScovillMfg 483/8 B 65 Shell Oil 58 3/4 A 64-120 Signode Corp 29 A- 33-50 Southern Rwy58 1/4 B 77-104 Spartans Ind 26 1/ 8 27-36 Stevens, J. P. 52 3/8 B 52-75 Storer Broad 49 1/4 Sundstrand 23 7/8 Swingline A 48 3/8 B 54-70 B B 50-70 United Fruit 21 7/8 B Vornado 473/4 54 Vulcan Mat. 20 B 28 Warner Bros. Co. 35 1/2 B 50 Support 50 30 70-65 54-50 53-50 45 LOW-PRICED Amer. Bosch Audio Dev. Camp. Chib. Foote Min. Gt. West. Fin. Intern'l Pack. Ling-Temco Close 4/30/65 20 14 4 22 11 3/4 14 1/2 25 3/8 Qual- !!L B- B B Upside Obj. 40-50 29 44-62 Support 21 SPECULATIVE Close Qual- 4/30/65 Microwave 10 1/8 B Mohasco 20 1/4 B National Can 26 B Pacific Pete 11 B- Sbd W. Air 10 C Univ.Match 16 3/4 B Varian Assoc.14 7/8 B Upside Obj. 29 50-60 14-20 Support – ThiS Bulletin LS published (or your convcnjtnrt.. H.nd mio)mRtion nnd is nol nn offer to /lell or R sollcltlttJon to buy any seCUrities discussed. The Information IHIS Obt.flIDNI from source'! we hl'h(vc to 1101 te1mhle. but we tlo not ItUIHlI.nto't' its nCCUfH,CY. WRlswn & Co, Inc Rnd Its offic(ra, dnectors or employees moy have nn U'lten.st In or JIUr('hfUlt' IHld lieU the ht.'CurLtlcs to hcrt!m. WN-5I16

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