Viewing Month: June 1965

Tabell’s Market Letter – June 01, 1965

Tabell’s Market Letter – June 01, 1965

Tabell's Market Letter - June 01, 1965 page 1
Tabell's Market Letter - June 01, 1965 page 2
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Walston &- Co. —–Inc —– INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 1, 1965 The market declined'shaTply over the past week, and the Dow-Jones Industrial Average reached an intra-day low of 904.82 on Thursday. At this level the Average had entered a strong support area in the 910-900 range. This support area is off the top of the two-and-a-half month trading shelf between 911. 80 and 877.48, formed during the period between February and April. This was finally penetrated on the upside late in April and resulted in the advance to 944.82 earlier this month. It is technically logical for a decline to halt off the top of a previous broad consolidation area. Also the 40 point decline in nine trading days was extremely sharp. It resulted in most of our shorter term technical indicators entering oversold territory. The upward trend pattern in the Dow-Jones Industrial Average, that'started in late 1962, is still intact. Since the Cuban crisis low of 1962, the Industrial moved ahead in a series of relatively modest advances (averaging 10) and corrected itself internally by a series of even more modest declines (averaging about 5), followed by a consolidating phase of two or three months and then an advance to new high territory. There have been ten such advances and declines in the past two-and-a-half years. The most recent series was the 7.7 advance from the February low of 877.48 to the recent high of 944.82. The present decline from 944.82 to Thursday's low of 904.82 was 4.7. Both of these moves fall into the two-and-a-half year pattern. If this pattern continues, the market should consolidate around this level and be followed by another advance into new high territory. Obviously, this pattern is not going to continue line a high will be reached and, after the subsequent to reach new high territory, and the next decline wilff6arr this happens, the uptrend channel is destroyed, Dow Theory reasoning. The only trouble is that to probably result in missing a good part of Wei Somewhere along the n market will be unable e e vious low. When n 's in effect. This is old a sequence of events would al indicators might be able to anticipate such a development As yet, there is' orily one technical in ar – readth should furnish the clue. s'om-e- dOubt on of the advance continuing new high territory. Our breadth index did not confirm the adv ce f ne's Industrial Average into new high territory earlier in the mont. i e ce before in the last two-and-a-half years. It occurred in Septe 6 e Average reached a high of 767. 24 and was followed by the Kennedy assassin '0 I f 710. 83 in November. With the Johnson confidence boom, the breadth index rever at th.e turn of the year and has been in an uptrend channel since the end of 1963. At t moment, we would be inclined to wait for another testing of the breadth index on the next rally. Inability of the breadth index to reach new high territory, despite a new high in the Average, would be a definite warning signal. In the past such warning signals have occurred quite some time before the advance topped out and there was the opportunity to lighten holdings before the decline actually occurred. Technical action must be observed closely on the next advancing phase. Inability to reach new high territory by both the Industrial Average and the breadth index would be definitely discouraging. With the market showing no signs of the rampant over-speculation that occurred in 1961-1962, the action of individual issues continues to be much more important than the broad moves of the general market. We note that a considerable number of individual issue have reached their upside potentials but have not, from a technical viewpoint, built up dangerous tops. If a top pattern is developing, it will take more time to form. At the same time, there are a sizable number of issues that indicate higher levels over both the intermediate and longer term. Stock of this type could move higher while the remainder of the market consolidates. In our Recommended List, a number of issues continue to show interesting potentials Besides the recent recommendations of Aluminum Company of America (76-1/2), National Cash Register (90), and Revlon (48-3/8), there are a number of other issues with above average attraction. They include Fruehauf (36), MGM (42-1/8), Sundstrand ( 23-3/4), and Warner Brothers Company (34-3/4). In the lower priced more speculative field, we continue to like American Bosch (22), Audio Devices (16-3/4), and Mohasco (20-3/4). A new monthly list can be obtained from your Account Executive next week. Dow-Jones Ind. – 918.04 EDMUND W. TABELL Dow-Jones Rails – 205.04 WALSTON & CO., INC. Thts market letter 18 published for your convemence Rnd Information and is not an offer to sell or A solicitation to buy any l51!Curtties dUUU8Sed The In(ormntlon was obtamed from sources we hdlCve to l … reliable, but we do not guarnntee Its accuracy Walston &. Co Inc. And Its officers. dlrE'etoro; or em.,toYeEs may have an lRterest in or Jlurchase and sell the securlt.les referred to herein, WN801 Walston &Co. Inc INVESTMENT SANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS EDMUND ,-W. RECOMMENDED LIST June 1, 1965 This edition of our Recommended List gives long term technical upside objectives and indicated support levels in cases where such levels exist. An asterisk in the Upside Objective column indicates either that the objective is unclear, or that the stock has not yet broken out of its base formation. QUALITY & LONG TERM GROWTH Close Qual- Upside Sup- Close Qual- Upside Sup- .. 5/28/65 J!y Ob. port 5/28/65 ity Obj. port Alum CoAmer 76-1/2 B . 70-65 Nat Cash Reg 90 A 140-180 85-80 Amer. Can 46 B Norfolk & W 126 A 155-170 125-118 Gen'l Elec. Gulf Oil 103-3/8 A 56- 3/8 A 130 95 Reynolds Tob 41-1/8 A 66-92 50-45 Royal Dutch 41 A 86 39-3fJ PRICE APPRECIATION Close Qual- Upside Sup- Close Qual- Upside 5/28/65 ity Obj port 5/28/65 ity Ob Atchison, Top 31-5/8 A- 46-52 28 McDermott 41 B 48-80 Beaunit Corp. Cenco Inst Clark Equip. 43-1/4 B 32 -1/2 B 77 A- 57-60 42 ,. '0 50-45 McGraw Ed. 31-1/2 4- 35-40 Mesabi Trust 13-7/8 22 MGM 42-1/8 70 Clevite Cluett Peab. 45-7/8 B 57-100 72-3/8 B 92 Metromedia 37-1/2 B 64 NewmontM 54 -1/2 A- 62 Copperweld S 33-3/4 B 47 N Amer.Car 32 A Crowell ColI Denver, R. G. 33-3/4 B 20-3/4 B 45-58 30-28 Raytheon 28-43 Revlon 24 48-3/8 A- 100 Disney, Walt 56-1/2 B 65-100 Reynolds Met 43-1/4 B 51-80 Eaton Mfg. 52 B 78 Riegel Paper 23 B 34 Elec. Stor. B 50-3/8 A- 56-80 SchIumberger 79-1/2 A 90-130 ElPaso N. G. 20-5/8 B First Charter 21-7/8 ;l Scovill Mfg 50-7/8 B 65 Shell Oil 63-5/8 A 120 Fruehauf 36 B 44-49 Signode Corp 30 A- 33-50 Gen'l Dyn 43 56-84 Southern Rwy 55 B 77-104 Hewlett Pack 28-1/2 B 40-60 Spartans Ind 28-1/2 36 Illinois Cent 53-3/4 B 78-114 Stevens, J P 50 -1/4 B 75 Int. Min.Chem. 54-3/4 A- Storer Broad 48-1/2 B 54-70 Kansas City 40-1/8 A- ;' 40-38 Sundstrand 23-3/4 B Koppers Co. 64-1/2 B 80-100 Swinglme 4 48-3/8 B 70 Korvette,E. J. 43-7/8 B 60-80 43-40 United Fruit 19-1/2 B Litton Ind. 95-5/8 B 96-128 Vulcan Mat. 19-7/8 B 28 Lykes Bros. 23 B 32-60 20 Warner Bros Co '35-3/8 B 50 Support 37-35 30 53-50 45 LOW-PRICED Close Qual- Upside Sup- 5/28/65 Obj. port Amer. Bosch Audio Dev. 'Camp Chib. Foote Min. Gt. West. Fin. Int'l. Pack. Ling-Temco 22 16-3/4 4-15/16 21-3/8 10-3/4 13-5/8 24-1/2 B- . B B 40-50 ' 29 44-62 21 SPECULATIVE Close Qual- Upside 5/28/65 ity Obj. Microwave Mohasco 10-3/4 B 20-3/4 B 29 National Can 25-1/4 B 50-60 Pacific Pete 10-5/8 B- Sbd. W. Air 10-1/2 C 14-20 Univ. Match 16-3/8 B Varian Assoc. 17 B w 0' Support Th B II t 's IlUbhshcd (or )our 111111 l11formllllon lind II not .In olTu til 'ell I \ … tlon to Luy 1\1l ,(,purltles fhscUSM,,.j. The mfOlmatlO1l from source.. w/.. iwh,vc to I.. Iclmhlc, hut t' ,lu not Io!u.lrll,ntl-t' Its .l('IUI.I\ \'al,ton & Co, IIll'. .\Tul It; officer!!, dUI'l'tor'l 01 cmllio,,es mn) hRve nn Interest In or purchll.M' an.1 ,1,11 thl' ,ccuntlt.'; rt(elIP1 tn h ..rlrn WN-916

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Tabell’s Market Letter – June 07, 1965

Tabell’s Market Letter – June 07, 1965

Tabell's Market Letter - June 07, 1965
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Walston &Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges ';f-';'r OFFICES COAST TO COAST AND OVERSEAS lABELL'S MARKET LETTER June 7, 1965 On Friday we sent the following wire to all Walston offices One of our short-term technical indicators tells us how much the market is over-sold or over-bought at a particular time. This indicator, which is based on advancing and declining stocks, reached minus 3300 at last night's close. At this level it is as low as it was at the bottom of the Cuban crisis low and at the bottom of the Kennedy assassination low. This would indicate that the market, at least on a short term basis, is deeply over-sold and in the next few days could turn around sharply. The rise will be selective. An issue with an interesting technical pattern is mentioned below. E. J. Korvette, Inc., was originally recommended by this letter in January at a price of 42. Subsequently, it'moved ahead sharplyto n-ews developrrfertt-s-have- brought the stock back to support at around the original recommended level. It, therefore, becomes worthwhile to re-examine the original recommendation. As we pointed out in January, when one buys Korvette, one is buying a concept. Korvette is unique in the retailing field. It is neither a discounter nor a department store but rather a unique retailing operation that combi nes the price appeal and mass merchandising concept of the discounter with the broad line, general attractiveness, and—recently—credi availability of a modern department store operation. What has been the success of this concept The table below compares Korvette's growth over the past five and ten years with that of Sears, Roebuck, America's leading retailer, Federated Department Stores, the leading department store operator, and Interstate Department Stores, a typical discounter. For comparative purposes in this and all subse- quent tables, Korvette's fiscal year ending July is facal years of the others ending in January of the s'ame year. Sales Sales s crease /0 Increase 1955-6 1959-60 4-5 955-1964 1959-1964 E.J.Korvette Stores 17.8 – 7. E 9 3973 – 7.3 360 Federated Dept. Stores 1215' 126 60 The figures speak orvette's sales growth has far outstripped that of other leadi ng retail p i i mewhat better than that of Interstate, a pure discount house. A tabulatlOn of O'''–n'r soo re shows the same story. As the table below indicates, Korvette's earnings n has been consistently superior to that of the other retailing companies. Earnings Per Share Increase Increase 1955-6 1959-60 1964-5 1955-1964 1959-1964 E. J. Korvette .12 .74 2.30-E 1817 310 Sears, Roebuck .95 1. 32 2.00 110 52 Interstate Dept. Stores .59 1. 98 230 Federated Dept. Stores 1. 53 1. 98 3. 10 101 45 Despite this fact, Korvette sells at a considerable discount from both Federated and Sears and at a price not much higher than that of Interstate despite the fact that it is a much more broadly based operation and has shown better sales and earnings growth. The table below shows comparative price earnings ratios. Current Price Earn! share 1964-5 p! E Ratio E.J. Korvette 42 2.30-E 18.3 Sears, Roebuck 70 2.00 35.0 Interstate Dept,Stor,es 33 1. 98 16 6 Federated Dept. Stores 73 3.10 23.5 These figures, it would seem, attest to the success of Korvette's retailing philosophy. We continue to estimate earnings for 1964-5 at approximately 2. 30 per share and look for further growth in 1966. Recent acquisitions should further integrate the operation and make for additional long range profitability. The stock continues to have a long term technical objective of 60-80, and is again suggested for inclusion in growth accounts. Dow-Jones Ind. – 900.87 Dow-Jones Rails – 200.47 ANTHONY W. TABELL WALSTON & CO., INC. ThiS market letter i8 IJubhshed (or )our ('onv('nl('n('(' nnd In(ormatlon and IS not lUI offer to sell or a solllltatJon to buy any lleeUtities discussed The In formntlon was obtmncd from SOUf'('S hdlCve to I rehnhle, but we do not gull.rRntee Its 1\C'C'urRC'\ \\fllston . Co, Ine Rn It officelS, dlret'tors or emJ'loyeea may have an mtereat In or purchase Rnd sell the st'l'untu'!' re(l'rren to heft'ln WNSOI

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Tabell’s Market Letter – June 14, 1965

Tabell’s Market Letter – June 14, 1965

Tabell's Market Letter - June 14, 1965
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W—-a–l-s–tIonnc–&—C–o–. INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges Of-fleES COASl 10 CO'Sl AND OnflSeAS TABELL'S MARKET LETTER June 14, 1965 – During the past eighteen trading days the stock market has suffered the steepest de- cline since the Cuban 11. 6. The drop from the May 14th intra-day high of 944.82 to the Thursday intra-day low of 869.35,- on the Dow-Jones Industrial Average, was 7.9. This is slightly greater than the Kennedy assassination decline of 7.4 in November, 1963. Incidentally, that decline also occurred in eighteen trading days. The present decline has resulted in a downside penetration of the 200-day moving aver age line of the Dow-Jones Industrials. This means the Industrial Average is selling below the average price of the last 200 trading days. Obviously, this implies a loss of upside mo- mentum. The 200-day line is 887 decline,has ed'me-upward trendCchannel that has been in effect since the-Cuban crisis low of October, 1962. While these two developments are unfavorable, the steep d cline has also resulted in bringing the m,!rket down into sharply oversold territory on both our short term and inter- mediate term rate of change technical indicators. The level reached by these technical indi- cators is comparable to the oversold condition reached at both the Kennedy assassination am Cuban crisis lows. When these indicators reach present levels. there has been. on most past occasions,at least a technical rally of fairly sizable proportions. The first warning signal of market deterioration was given last month when our breadt index failed to confirm the new high in the Industrial Average. This is usually a warning sig- nal and in the past has occurred six months to a year before the market suffers a major de- cline, When the market moved somewhat above its upside objective at last months I high of 944.82, there was no top pattern at that level. immediately and penetrated both the 905-900 support level and the 885- 0 witho!lt hesi- tating. This type of spear formation top made it 1 r ma nical viewpoint, to assess the possible downside projection of the decli il a r part of the decline had already occurred. The Industrial Average d a . ra- high of 911. 80 in early Feb- ruary and the count across the five-month p 0 -t the -905 level indicates, from a' tech' nical,viewpointra.downside ,potential . .s-the-lowest-eowns t can be figured from the would appear doubtful that the d s deeply oversold at the moment it would be reached before at least a tech- nical rally. It ho dustrial Average .'n' t c i ed as the downside risk at the moment. For the In e tential than those mentioned above would necessitate a rally back to the 0v broaden the top. If that.level is reached, it would be necessary to take ano er at the market. . While the marke s given warning signals by the divergent action of the breadth ind and the breaking of the 200-day moving average, these indicators usually give signals before a major market decline. With the .market deeply oversold at the moment, the averages could move at least ba'ck to the tops and individual issues could reach new high territory. In the 1956-1957 top, for example, the averages reached a triple top around the 525 level and the technical indicators .signalled warnings long before the last top was reached. This also oc- curred in the 1959-1960 top. In 1961-1962, a divergence in breadth occurred in August, 1961 eight months before the market started its decline. There were several 60/0 to 7 corrections during this period. The breaking of the 200-day moving average occurred three months be- fore the decline. There was plenty of opportunity to sell on strength once the warning signals were given. This letter has been suggesting for quite some time Selling on gtrength objectives on individual stocks were reached. We would continue this policy at an accelerate pace, but would continue to hoM and add attractive stocks to our list at favorable price levels. There ar several stocks we have been watching for some time. We will add them to our rec ommended list if the leMets;tmen,j;ioned below are reached. Buy At Buy At American Hospital S. (27 1/8) American Potash (40 1/2) Automatic Canteen (20 3/4) 25 39 19 Interstate Motor Freight (29) 28 Perkin- Elmer (50) 48 Pfaudler Permutit (-30 l/S) 28 Bobbie Brooks (23 3/8) International Paper (32) 22 31 Radio Corp. Wallace & Tiernan (33 1/2) 32 (30 7/8) 29 Dow-Jones Ind. 881. 70 Dow-Jones Rails 195.80 EDMUND W. TABELL WALSTON & CO. INC. senThiS market letter 18 publi!lhed for your convenience and information and is not an offer to or R BOIlcitatlon to buy any eeeuritiee dll!alA8ed. The in- (ormation was obtained from sources we believe to tl' rehable. but we do not guarRntee its accurRcy. WRleton & Co.. Inc. Rnd Its officers. directors or employees ml\.Y have an interest in or purchase and sell the seeurltles referred to herem. WNSOl ,

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Tabell’s Market Letter – June 21, 1965

Tabell’s Market Letter – June 21, 1965

Tabell's Market Letter - June 21, 1965
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Walston- Inc, &Co. INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS MembersNew Stock and Other Principal Stock and Commodity Exchanges OFFICES COAST TO .COAST AND OVERSEAS TABELL'S MARKET LETTER June 21, 1965 The 21-day decline which.had brought the Dow-Jones- Industrial Average from a May 14th high of 944.82 to a low'of'859-1'! abated, at least temporarily, this week when, after reaching the aforementioned low on Tuesday, the market sharply reversed itself,and closed' up decisively on heavy volume. Further advances on Wednesday, Thursday, and Friday morning brought the index to an intra-day peak of 888.44 on Thursdaybefore profit-taking set in. The week's close was 879. 17 . As was pointed out last week, the decline had brought all of our short and intermediate term indicators into sharply oversold territory. When oversold territory is reached, -. .aE. that is lastweek's-mid-weeI upsurge produced just such a rebound. Obviously; 'at this point no base exists for any substantial advance, and it wiU be necessary for one to form. This can be accomplished by continued backing and filling around current levels. Possibly involved may be .a testing oLthe old low, or even a move to moderate new lows .. Whatever 'form it takes, the ultimate formation of a base appears to be the most likely po\'sibility at this point. A less likely possibility'is a reversal of the short and' intermediate 'term- bUY'Signals already given by a new move deeper into oversold territory. With all the variou!i permutations and combinations of market moves possible at'this stage, it 1S well to keep a few simple thoughts i'1 mind. The market froin,October, 1962 through May 1965 could be simply as moving within a narrow and clearly defined uptrend channel. The most likely description of the market phase which began this month will likely be a fairly wide sideways trading range. Such a iSa tbe normal postlude to a long upswing, and there appears no particular not again be the ca In such a market, two factors become a – the identification of intermediate term buying and selling points and . With the move into over- sold territory, we noted in last week's t added to our recommended list if downside price targets were lry-torecognize any future intermiit seging points and use these to remove from our recommended list those s k' term technical action has deteriorated. Some of the stocks adde 0 s !eff are reviewed briefly below. AMERICAN 0 AL (41) has expended some 46 million, almost 16 per share, during tn s on new plant and equipment, and the fruits of this ex- pansion are now beginn ng e seen in operating results. Earnings, 2. 61 per share in 1964, reached an 8-yea eak and further improvement is likely in 1965, as evidenced by the March quarter in w ich 72 per share was earned vs. 56 in the like 1964 period. Mar- gins have also increased in each of the last two years and appear likely to do so again in ' 1965. All this is especially noteworthy since current prices mark the stock at less than six- teen 1964 results and less than fourteen times estimated 1965 earnings for an equity that consistently achieved multiples in the upper 20's throughout the 1957-1962 period. Amon the new facilities coming on stream for this major producer of boron and potash products and electrochemicals is a titanium dioxide pigment plant which opened last month and should add appreciably to earning p.ower. INTERNATIONAL PAPER (31) is the largest paper making company in the world and has extensive timber holdings. lnd for, the paper industry, 'this leader in the field should enjoy good earnings growth over the tlext , few years. It has, from a technical point of view, field in a base formation fo'r more than five years, and the ultimate upside potential is more than double current levels. It therefore appears to be a worthwhile.,ho1d.itnglll'cor-.high grade accounts and is accordingly being add'ed to our recommended list for qualityan.d long term growth. The 1. 20 dividend provides a 3. yield. Other stocks being added to the list last week include Interstate Motor Freight, 'Perki Elmer and Radio Corporation of America and they will be reviewed in subsequent editions of 1his letter. Dow-Jones Ind. 879. 17 Dow-Jones Rails 196.56 ANTHONY W. TAB ELL WALSTON & CO. INC. This market letter Is published for your con,,-emence And mformation and IS not fln olter to Bell or A. soIidtatlon to buy An,. -.rities The in- formation was obtained from sources we believe to t.' reliable. but we do not JNnIRl'Itee Its n((urhCV Wahlon & Co., Inc. I\nd its oftircrs. direrton! qr emJ'JIOyeeB may have an Interest U\ or purdlfl..se and Bell the seUntH's referred t.o herein.

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Tabell’s Market Letter – June 28, 1965

Tabell’s Market Letter – June 28, 1965

Tabell's Market Letter - June 28, 1965
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, — Walston &- Co. Inc INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges TABEll'S MARKET lETTER OFFICES COAST TO COAST AND OVERSEAS June 28, 1965 After a two-day technical rally of thirty points from the June 15th intra-day low of 859.13 in the Dow-Jones Ind\lJSctr.ia1srto the June 17th intra-day high of 884. 44, the market turned down again last week to reach a new low for the move at Friday's intra-day low of 849.75. This level compares with the December intra-day low of 850. 19. Moreover, Friday' closing price level of 854.36 was below the December low closing of 857.45. Under the Dow Theory this constitutes a bear market signal. This could bring some further selling into the market but, in our opinion, the Dow Theory is outmoded and has give\l several false signals in the past when the market low was reached shortly after a Dow sell signal was given. Our opinion expressed several weeks ago still holds. We believe the market would be in a buy- mg area In…….. '!. the 850- -8- 20 ra-ng- e.-… – – .. , . – – – – JZ – \9ur opinion of the long term outlook for the stock market has not changed. We believe the market in 1961 reached a major top in the advance that started from the 1949 low around 160 in the Dow-Jones Industrial Average to 741. 30 in November, 1961..JThe market during this twelve-year period advanced in a five-wave pattern with three advances and two correct ionary moves. CAll stocks did not reach their highs at the same time. Some groups, like the oils, reached their highs as early as 1957. Other groups, like the steels, reached high in 1959. The glamour/ growth issues reached their highs in 1961. In the 1961 period the act- ion of the market showed all the indications of a classical top. There was frantic overspecu- lation in glamour issues with pIE ratios in some cases reaching 100-or-more times earn- ings. This was followed by the 1962 break. The 1962 decline to 525 was 29 and was the sharpest decline in twenty-five years and fully corrected advance. It is our thesis that the market reached a major top in the 1957-19 p – nd a major low in the 1960-1962 period. This overlapping of dates is ef c orne groups, like the oils, reached their lows in 1960 rather than 1962. \YV CI'he usual technical pattern after a major op, IS a three-wave consolidating move in order for most stocks to form a bro pat prior to a major long term ad- – – – -.- efirst was the 1962 decline. The ,WWthe ll)63-1965 advanceJIn this second wave, the averages reached new high ter 't was extremely selective. Of the thirty stocks in the Dow-Jones teen moved above their respective 1957-1961 high In the entire mar p eaching new highs was even less. This letter has felt for some time that 1 CO d e that started three years ago had reached a mature stage of development and ad autionary attitude as the market advanced. In December, we advised a gradual deve ent of a 25 cash reserve by selling on strength as issues ed their upside potential. C.The uptrend channel in which the market has held since the Cuban crisis low has ended and will, in our opinion, be succeeded by a broad trading area which will be featured by wide swings both up and down. The outer limits of this range are not yet clearJOn the downside, the potential top at the 910-905 level indicates the area we mention- ed two weeks ago of 850-820. At Friday's low of 849.75, the Average had reached the 850 level and was less than 4 from the lower limit of 820. This would appear to be the down- side risk at this stage. A broader top using the November high of 895 would read a bit lowe at about 790, but because of the sharply oversold position of the market, this appears un- likely at this stage and we would consider 850-820 as the buying area. The upper limit of the broad trading range which we envision as the. n,! possible to ascertain until a base nasformed–If toe market followed the 1956-195'Tpattern,- – which it resembles, the Average could move back to near the old high. The third wave move ment we envision is not comparable in any way, from a technical viewpoint, to the 1962 de- cline. The present move is in the nature of a broad consolidation to build up and enlarge base patterns prior to muchThigherdevels in the latter half of the 1960 's(The market cou11 remain in this third-wave movement for a year or longer with the Averages and individual issues showing wide price swings.The lower limits of the range should be viewed as a buy- ing opportunity. The upper limits should be viewed as a selling opportunity in issues with below-average longer term attraction Dow-Jones Ind. 854. 36 Dow-Jones Rails 190.74 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS pubhshed ror your convenience p.nd InformatIOn Rnn IS not Rn ofter to seU or R solidt.ation to buy fmy aeeurltaes Th(' In- formntlon \l,RS obtamed from sour('t') we h,-heve to Lt' reliable but we cio not R'Unrant('e its Ilccurl\ry v..'nlRton Co. Int'. Rnd t,.. offirclS. dlrertors or employees may have an mterest In or purchllSe and sell the rdt'lred to herein WN301

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