Tabell’s Market Letter – June 01, 1965

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