Viewing Month: August 1965

Tabell’s Market Letter – August 02, 1965

Tabell’s Market Letter – August 02, 1965

Tabell's Market Letter - August 02, 1965 page 1
Tabell's Market Letter - August 02, 1965 page 2
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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 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER August 2, 1965 Market strength in the latter half of the week was impressive. President Johnson's Vietnam statement on Wedn.esday evidently removed some market apprehension, and, from that point onward, gains were steady with a total advance of 18.21 points in the Industrial Ayerage from Tuesday's close of 863.53. A good deal of internal strength was demonstrated on the latter two days of the week. For example, on Thursday, 816 stocks advanced vs. 309 declines alld on Friday, 802 stocks posted advances vs. 315 stocks dropping. Ups ide and downside volum-e figures, as compiled by Scantlin Electronics, were also encouraging. Thes figures show ,the total volume on upticKs vs. ,total volume on dow.nticks. For Thursday. up- side was .3, 050, OOOsharesvs.downside volume,of 1,055; 000 shares. Friday's figu- res were 3,450,000 and 1,200,000. These latter figures are of some significance, for the history of the market since the June 30th lows is one of failure to produce any sustained buying interest. At the lows at -the end of June, the 35-day total downside volume was 101 m'illion shares. This figure has consistently declined from that peak and was down to 75 million shares as of Thursday. How ever, July's strength has been unaccompanied, to date, by any buying interest as evidenced by the fact that upside volume on a 35-day basis has been able to increase only from 66 million shares to 73 million shares. Obviously, if the present rally is to carry further, continued buying power must enter the picture. Meanwhile, the market continues to hold in a by the June low of 832 and the June and July highs around 885. Currently, u of this range would suggest 905 to 915, but the pattern a eIther. A month now has elapsed since the May-June 11. 8, and there has been time for some a'hd/a hich brought the Dow down sis on some of the character- Further analysis shows that tertiary variety, year when the Dow a reached in a year e skeptical of the stock a k w especially those of a secondary and times during 1964. In other words, in a 4, see many stocks making lows below the bottoms 525. There is little wonder that some investors remai All of this, ho er, goes to re-enforce a thesis reiterated by this letter repeatedly over recent years. This thesis holds that, ever since 1956, the action of the averages has been, in great part, meaningless. The theory is that different issues made major cyclical peaks at various different times during the 1956-1961 period – some in 1956, some in 1957, some in 1959 and some in 1961. Moreover, different stocks made cyclical lows at different time periods – a number in 1960, a larger number in 1962, and, when the list is finally complete, we will undoubtedly be able to find a large number of stocks which will prove to have' made their bear-market lows in 1964 and 1965. The interaction of all of these different stock cycles has produced fluctuations in the averages that, taken by themselves, mean ver little. It is the essential meaninglessness of the fluctuations in the averages which has, of late, confused a number of proponents of the Dow Theory which looks only at averages rather than the action of individual issues. If our theory ils correct, it once again points up the folly of continuing to hold issues that appear to be in downtrends relative to the market. despite the fact that these issues may have been bought at higher prices. In most cases, the hoped-for improvement is unlikely to materializ'e. Instea-d, issues with below-average prospects should be ruthlessly weeded out of individual portfoliOS and replaced by those issues with favorable fundamental and techhi- cal patterns. As an aid in selection, the August edition of our Recommended List will be in the hands of your Walston Account Executive by the end of this week. 1 Dow-Jones Ind. 881.74 Dow-Jones Rails 207.73 ANTHONY W. TABELL WALSTON & CO. INC. , fr , This mRrket letter is publlqherl (or your con,enwnce nli Ln(ormRtlOn and I' not an o(ft'r to Hell or R solicitation to buy Rny Bfturltles formation oLtnlned from we hdll'VI' to Il relmble hut llo not It!! U('curfl!'\ & Co, In!', anti Its officers, employees may have an mterest In or Ilurcha;t' .,nd sell th(. ,,\-''unlll''i rdl'l red to hell'tn, The in -…… or WN801 Walston &- Co. INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS EDMUND W. TABELl'S RECOMMENDED QUALITY & LONG TERM GROWTH LIST August 2, 1965 Close .Qual- p/E 7130165 ity Ratio Yield Close Qual- p/E 0/0 7/30165 ity Ratio Yield Alum.Co.Amer. 70 5/8 Amer. Can 49 3/s General Elec. 100 3/s Gulf Oil 53 1/4 Paper 295/s 13 13 A A A 22 2.0 NatlCashReg. 16 4.0 Norfolk & W. 33 2.2 Radio Corp. 1333 16 – 4.0 – 7S1/4 129 1/2 34 -. A A A .A 2S 1.5 14 5. 6 23 2.0 3. 5–. -. 4. 5 PRICE APPRECIATION Close Qual- p/E 7/30165..!!L Ratio Yield Amer.Hospital S. 29 A- 29 1. 2 Amer. Potash 37314 B 14 3.7 Atchison, TOp. 32 7/s A – 11 5.0 Auto. Canteen 21 7/s B 21 3.6 Beaunit Corp. 40 3/s B 12 3.4 Cenco Instr. 30 Bt 26 1. 0 Clark Equip. 44518 A- 12 4.0 Clevite 43 3/4 B 9 4.2 CluettPeab. 713/4 Bt 16 2.S Copperweld S. 31 3/4 B 10 3. S Cr.owell Coll.363/A.-..B. …,17 Denver,R.G. 197/8 B 12 5.0 Disney,Walt 51 1/4 B 11 O. S Eaton Mfg. 49 5/s B 10 4.5 Elec.Stor. B 4S 3/4 A- 13 3.7 EIPasoN.G. 201/S B 14 5.0 First Charter 19 8 Fruehauf 29 7/s B 12 5.0 Gen'l Dyn. 41 7/s 11 2.4 Hewlett Pack. 30 3/s Bt 32 0.7 illinois Cent. 50 B 13 4.0 Int'l Min. C 54 3/4 A- 19 1. 9 Inter.Motor F. 29 1/4 B 11 3.4 Kansas City 1. 39 1/ S A- 9 5.0 Koppers Co 59 B 13 4.5 Korvette 34 B 16 Litton Ind. 93 7/s B 29 Close Qual- p/E 0/0 7/30165 ity Ratio Yield Lykes Bros. 20 1/4 B 9 4.0 McDermott 41 3/4 McGraw Ed. 31 3/4 Mesabi Tr. 13 3/s Metro Gold.M. 35 3/s Metromedia 34 Newmont M. 53 No.Amer.Car 2S B 12 A- 15 lS 14 B 13 A- 17 A 16 2.S 3. 1 5. 9 4. 3 2.0 2. 6 3. 2 Perkin-Elmer 551/4 B Raytheon Co. 23 12 2. 6 -RevIon 40-,.—-,A–1-4- -3.2- Reynolds Met. 413/4 Riegel Paper 21 1/4 Schlumberger 67 Scovill Mfg. 45 3/4 Shell Oil 627/s Signode Corp. 30 lIs SouthernRwy 553/s Spartans Ind. 2S 7/8 Stevens, J. P. 4S 3/s Storer Broad. 53 Sundstrand 24 1/8 Swingline A 43 5/s B 17 B 10 A 14 B 14 A 17 A- 13 B 11 16 B 11 B 14 B 11 B 14 1.7 3. 7 2.4 4. 3 2.S 3. 6 5.0 0.5 4. 2 3.7 4.2 3.0 United Fruit 20 1/4 B 55 Vulcan Mat. lS B Wallace & Tiel 32 A- Warner Bros.Co. 31 7/s B 10 16 10 4. 3 2.S 3.1 LOW-PRICED SPEC ULA TIVE Amer. Bosch Audio Devices Camp. Chib. Foote Mineral Gt. West Fin. Intern'l Pack. Ling-Temco Close Qual- 7/30165 !ty 20 7/s 13 1/s B- 4 1/2 19 1/s 9 7/s 11 1/4 B E'.!' 25 1/4 p/E Ratio 19 39 21 17 S r.,t 11 0/0 Yield 2.4 1.0 -4.5 2.0 Close Qual- p/E 7/30165 ity -Ra-tiC' Microwave 11 B IS Mohasco 19 3/4 B 14 National Can 25 7/s B 15 Pacific Pete 9 1/4 B- 40 Sbd.W. Air S 7/s C 9 Univ.Match 15 B 16 Varian Assoc. 17 1/s B 47 pIE Ratio Compiled at latest 12 months earnings. I. Yield 3. 3 1.6 Tins Bulletin IS Ilubhshcd for 'Ollr conVCllh'r'lce lind m(ormntlon nnd IS not nn offer tf) sell or a sohclLRtLOn to bu) an) !ecUrities discussed. The mformntJon was obtnined from sources \loC bdwvt' to III relwhlt. but WI do not Jtu.lrnnlt't' Its nc,urncy Walston & Co, Inc. and Its officers. directors or ma) hl\ve an mteresl m or IJurchcl.'II.! nnu t-dl the bt.'Cunties rderred to herem WN-916

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Tabell’s Market Letter – August 09, 1965

Tabell’s Market Letter – August 09, 1965

Tabell's Market Letter - August 09, 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 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 9, 1965 Although-the-Averages,.essell.tially, moved sidewayi;;;-last week's internal market strength was fairly impressive. Although Friday's close of 882.51 in the Dow-Jones Indus- trials was little changed from the week earlier close of 881. 74, advances outnumbered de- clines on all five days of the week and the short term outlook continues very much as out- lined in last week's letter. On June 14th this letter suggested a number of stocks for purchase if and when sup- port levels were reached. The weakness in late June brought most of these stocks down to those levels and they were added to our recommended list. They include Perkin-Elmer (58 1 I 4) suggested at 48, Interstate Motor Freight (30 1/2) suggested at 28,.3!!!d '-.-. .', — Perkin-Elmer has advanced the most since the original recommendation and, at 23 times latest 12 months earnings of 2.47, is not cheap on a statistical basis, but the far- above-average growth rate in the special scientific fields it serves makes it appear attract- ive for accounts interested in capital appreciation. The company is one of the leading pro- ducers of dptically-related scientific instruments. Perkin is believed to hold nearly a third of the market for ins truments of this type and it is a market that is projected by most anal) to be growing at an annual rate of around 15. The company's management ability in this field is a matter of record and we continue to feel that the stock is among the more favorabl situated growth type equities. Truck transportation is also a growing field, but the record of a number of companies in the area is one of conspicuous failure to take advantage potential. Two pre requisites for a successful trucking operation would appea 0 r ute structure and excellent operating management. Interstate Motor B s ess oth of these qualities. The route structure, which extends from the East Co the les, is heavily concen- trated in the industrialized areas of d , which account for more than half of total mileage. Freight volume is both as to commodities and cus- tomersAn of manage- efujis this of a time system which wil I n r e's terminals with a battery of computers in the company's genera fi t t se of high-speed data communication lines. Informatio on all shipments bei d eo be noted, updated and instantly available, and complete management control re 111 be generated. Scheduled for introduction once the system has been in operation e advanced Operations Research programs to improve earnings performance; That performance, to date, has been, of itself, impressive. Earnings for last year reached an all-time high of 2.50 per share, culminating four years of solid growth, and 1965 results could move as high as 3.25. Thus, the stock is selling at 9 times estimated 1965 results at a time when prospects for further earnings improvement are bright. It is difficult to understand why a company of the caliber of Wallace & Tiernan sells as cheaply as it does. It is partially a drug company, partially a chemical company, and par- tiallya food processing machinery company. Yet its growth rate over the past ten years has been superior to that of many leading companies in all three fields. It is admittedly not im- mune to cyclical fluctuations (earnings declined in both ang 1f161); bllt, With this except- ion, net income has shown satisfactory and steady growth in every year from 1954, when 82 per share was earned, to 1964 when 1. 78 was shown, and, for 1965, results could expand further to 2. 10. About one-third of the company's sales are accounted for by the equipment division which manufactures chlorinators and food handling machinery including the Do-Make machine, an automated procedure for the making of bread dough. Sales of this product have, ,due to industry conditions, failed to live up to expectations, but it is believed, nonetheless, to have long range potentials. The chemical division of the company produces organic peroxides used in plastics manufacture, and other specialty items. Drugs are divided into ethical and proprietary lines. In the latter area W&T has added to its highly profitable Desenex, the leading athlete's foot remedy, the Pharmacraft Laboratory Division of Seagram, which produces a number of famil iar products, including Coldene, Fresh deodorant and Allerest allergy tablets. The stock, whic sold for 33 times earnings in 1961, is now available for 16 times estimated 1965 results and has a favorable technical pattern with a long term objective of 43- 63, Dow-Jones Ind. 882.51 ANTHONY W. TABELL 1 convenumce and Information and\is not an oW 10 'tJAT ti1t dil!eUSSed. The in- formation was from sources we believe to te reliable. but we do not guaranibtM accUrRCY Rnd Its office(s. dLredors or employeell may have an mterest In or purchase Rnd sell tlle securities ref;rred to hereIn. WNSOI I j I

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Tabell’s Market Letter – August 16, 1965

Tabell’s Market Letter – August 16, 1965

Tabell's Market Letter - August 16, 1965
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.- TABELL'S MARKET Walston &Co. Inc INVESTMENT BANKERS ''– MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange . and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS LETTER August 16, 1965 Breadth of the market action'haS'improved considerably in recent weeks. In each '01 the past thirteen trading sessions the number of advancing stotks has exceeded the number declining. In most instances the favorable margin has been quite substantiaL Our breadth index has moved sharply above the previous rally high reached on July 15th. This improving breadth action has not as yet been reflected in the Dow-Jones Industrial Avera-ge which has failed to better the July 15th intra-day peak of 889. 98. The reason is obvious. There have been sizable advances to new high territory in a large number of stocks not in the 30-Stock index. The only stock in the Industrial Average to reach a new high for the year in the past two week;s is Eastman Kodak. During this same time period, two stocks in the Average,John -Manville and Union year. Institutional inve..st6rs, — in the main, remain quite cautious and buying has been reflected mainly in special situation stocks. The technical pattern indicates to us that the market is acting better than the Aver- ages, and the improving breadth action will result in a confirming upward move in the in- vestment issues before the present advance is completed. Our general market opinion remains the same. We believe the Averages will remain in a broad trading area for a considerable period of time with diverse price action in indivi- dual securities. We would use periods of strength to eliminate stocks with unfavorable tech- nical and fundamental patterns. We would use periods of weakness to buy stocks with good long term fundaI!1-ental and technical patterns. We do not envision either a broad sweeping advance nor a cataclysmic decline. The technical pattern, in our opinion, is quite different from the 1961 top. The overspeculation that existed then relatively wide price swings in a comparatively narrow tr in today. We expect 09 50 points in the Do Jones Industrial Average. To put it another way, 1 an a . een-point swing in a stock selling around 88. After this broad consolidati se s pleted, we would expect an upside penetration of the range and higher p 'ces e half of the present decade. This letter advised selling on stren t, he e part of the year, and building up . . .ln Junew.e-believ-ed . .e – p con– 1 sldered that area as a buy n th Wtra-day low was 832.74. At that point the market was deeply oversold. I From a technical view advance will carry to higher levels. . a ficient base to indicate at least an advance to the 910-920 area. . The stocks in ec ded list, like the general market, have shown diverse act ion, but a fairly sizab r have reached new high territory. Quite a few are at advan- tageous purchase levels long term holding. Aluminum Co. of Amer. (70 1/4), National Cash Register (79 3/4 nd Reynolds Tobacco (41 1/4), 10 our Quahty and Long Term Gro.wt section, fall into this category. In the Price Appreciation section, Copperweld Steel (31) wlth earnings of 3.03 for the past twelve appears be at a reasonable pxi;e Earnings for 1965 will probably remam at around the present level, but we antlclpate hlgher earnings in 1966 and 1967. Selling at about ten times current earnings, the stock appears undervalued considering the long term potentiaL Mohasco (20 also undervalue at present levels, in our opinion. The stock has moved sharply smce our ongmal recomme dation at 13, but the rise has been justified by the advance in earnings. The stock earned 1. 29 in 1964 and estimated earnings for 1965 are around the 1. 70 leveL Sur;dstrand 1/8 has done little marketwise until recently. It has broken out of the 24-19 area 10 WhlCh It has held for over two years and shows an improving technical pattern. Corp. (31 1/8J' one of the two leading manufacturers of steel strapping, is selling at hlrteen t1mes of 2.29 for the past twelve months. Here again both the fundamental outlook and the techm- – cal pattern are favorable. Storer (6.5 3/4) has moved up from June low of 45 to a high of 66 1/2, due to acqUlsltton of c;mtrol of Northeast Alr.l1Oes. The stck originally entered our list at 42. The techmcal objective was. 66-74. Due to ltS proxlm ity to this area, we are dropping it from our recommended hst. In our Low-Pnced Specu- . lative list improved technical action is being shown by Microwave Assoc. (14) on the Amen can Stock 'Exchange. This stock sold at 60 3/8 in 1961 dur10g the glamour stock craze. dropped to 8 in 1962. Since late1-1.9.62,d.tms,held in a range bordered by 8112 and 15. Ear.n' ings have been improving with 43 shown for the nine months ended June 30th. The stock lS extremely speculative but looks interesting technically. Universal Match (15 7/8) has lon.g term appeal as a speculation. UMT reached a high of 80 3/410 1960 and a low of 10 5/8 1.n 1962. Like Microwave, it has built up a substantial potential base in the 11-20 range. Patienc may be required. EDMUND W. TABELL (Written Noon Friday, Aug. 13th.) Dow-Jones Ind. 888. 82 WALSTON & CO. INC. DOHr-!ooes Rails 215 32 ThiS market Jetter is published for your convemenc(! nnd information and IS not an offer to sell or a solicitation to buy any 8eeUritle!l dlseuued The in- formation was obuuned from sources we bt.hcve to l rehnble. but we do not guRrantee Its accuracy WRiston & Co. Inc. And lUi officers. directors or emllJoyees may have an Interest in or purchase and llell the SeeUTltlcs referred to herem

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Tabell’s Market Letter – August 23, 1965

Tabell’s Market Letter – August 23, 1965

Tabell's Market Letter - August 23, 1965
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– – Walston &- Co. —-Inc — INVeSTMENT BANKERS MUTUAL FUNDS MUNIC'''Al BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges TABEll'S MARKET lETTER OFFICES COAST TO COAST AND OVERSEAS August 23, 1965 After last Friday's sharp breakout to a new closing high, the Dow-Jones Industrials continued their advance in the early part of last week. Moderate profit-taking entered the picture on Thursday and Friday, and the week's close was 889. 92. For the shorter term, the upside objective for the Dow remains 910-915. This pattern may broaden further. However, the main area of concern should continue to be the action of individual stocks. For many years, one of the primary concerns of the security analyst considering a stock was the stock's yield. The level, history and stability of a stock's dividend was considered to be one of the major factors in determining its investment quality. As short a time ago as the early 1950's, the basic rationale for increased institutional purchase of com that blue chip equities provided an income more tharitWice afforded by corporate bonds and other forms of investment. Years and increased emphasis on growth have changed all this. Bonds of highgrade companies now often provide greater income than the same company's stock and individual investors can obtain more generous income from sav i ngs institutions than from many equiti This is due, of course, to the realization that fixed income investments do not provide the growth potential and inflatiOn protection obtainable from a well-selected stock portfolio. Still, there are many investors, who, wh ile wishing this protection, still require a certain level of dividend income. Many stocks in our recommended list combine yields of 40/0 or better with attractive capital gain potential ana some of these stocks are reviewed below. One of the first groups that comes to mind for the investor seeking both growth and generous income is the rails. To our way of thinking, the bination of fundamental and technical attractiveness, and, f r an interesting comn, no fewer than six carriers are in our recommended list. They are ster 8 1/4), Atchison, Topeka & Santa Fe (32 1/2), Denver & Rio Grande ( al;8), i Central (525/8), Kansas City Southern (41) and Southern Railway (56 earnings and yield around 50/0 –in most cases, -merger-savings c ell between 9 and 14 times mo rom a fundamel1tal point of view, -in – ents-tomanY1'oads.-A-better-regu- – latory climate would appear labor restrictions appear slow t . competition for traffic and archaic Technically, the rails at their low of last June had reached all trend. Mesabi Tru i.a i and appear now poised to resume a long term up13 3/4) are a unique security which, we believe, deserves a place in the portfoli of y income-minded investor. The Trust's income (all of which is paid to certificate h rs under the Indenture) consists of royalties from production of taconite pellets from innesota properties, leased to Reserve Mining Company. Republic Steel and Armco, the joint owners of Reserve, are obligated to take Reserve's entire output and capacity is being expanded. A unique clause in the lease provides for price escalation based on inflation. In 1964, 77 was paid in royalties on the Certificates, and a similar amount is expected for this year, providing a 5.6 yield. Moreover, a large portion of the income is, after a certain holding period, exempt from ordinary income taxes. 1964 was the first year in the past decade that per share earnings of Re olds Tobac (43) did not show year-to-year improvement. This was, of course, due to the affect of re- ports on the dangers of cigarette smoking, which penalized both third and fourth quarter earnings with the result that 3.02 was reported vs. 3.13 in 1963. For both of the first quarters of 1965, however, again improved arid results for the full' year are expecte to resume their upward trend. Meanwhile, diversification continues with the recent acquisition of Penick &Ford. As the leading factor in its industry, Reynolds, we feel, deserves a higher investor recognition, yet current prices make it available on a 4. 2 yield basis with a payout ratio of less than 60. Other stocks in our recommended list that are suggested for income investment to- gether with their prices Can (51 7/8) 3.8, Clevite (44 5/8) 4.0, Eaton Mfg. (50 1/8) 4.3, El Paso Natural Gas (19 7/8) 5.0, Royal Dutch (37 3/8) 4.8 and Vulcan Materials (18 3/8) 4.3. Dow-Jones Ind. 889. 92 Dow-Jones Rails 215.67 ANTHONY W. TABELL WALSTON & CO. INC. Thl8 market letter 18 ;published for your convenience II.nd information and IR not an offer to eell or 8OlIcitation to buy any rteeurltlea dlseussed. The in. formation was obtam(!(. from we b(!heve to 1t- reliable, but we do not guarantee Ita accuracy Walston & Co.. Inc and ih offiters, directors 01' etnptoyee8 may have an Interest In or purchA.8e and seU the secuntles referred to herem. i' i ,

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Tabell’s Market Letter – August 30, 1965

Tabell’s Market Letter – August 30, 1965

Tabell's Market Letter - August 30, 1965
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Walston &- Co. INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 30, 1965 Trading volume totals present a rather interesting technical study at the moment. In our letter of August 2nd we mentioned the upside and downside volume figures computed by Scantlin Electronics. These figures show the total daily volume of trading on upticks against the volume on downticks ofalhs;tocks,listed on the New York Stock Exchange. We, in,ouI''' ,. technical work, adjust these figures to 35-day moving totals. At the June low, the total down side volume for the past 35 trading days reached a high total of 101 million shares. This downside volume total recently dropped down to a low total of 53 million shares. This is the lowest level in over a year. To us, this indicates a definite drying up of liquidation. How ever, up until now, there has been no comparable increase in upside volume. Upside volume ona 35-oay increasea antle' June low to a total of only 80 million shares as of Thursday. This is well below the high total of 106 million shares of upside volume reached in March. It would appear that the advance from the June intra-day low of 832.74 to Friday's intra-day high of 901.88 has been brought about by a cessation of liquidating pressure rather than by a substantial renewed buying interest. The figures noted above relate to the volume of all stocks traded on the New York Stock Exchange. While 35-day upside volume has lagged, it is substantially above 35-day downside volume. In addition, we also compile 35-day trading volume totals on the Dow- Jones Industrial Average. While downside volume of these 30 market leaders has also drop- ped sharply, the upside volume has shown even less increase than the totals mentioned in the first paragraph. This indicates that the general market has been acting better than the inves,tment stocks in the averages. This is borne out by stantiated by the number of new highs reached since the J index, and further sub. inlie July 1st, 216 stocks have reached new high territory for the year. Of thaO, I v e components .of the Dow-Jones Industrial Average. Three of these, Am Ca , tman Kodak and United Aircraft, reached new high territory by a ub 'al gin. American Tobacco and Westinghouse Electric reached a fractional . h. , u e J. '''-has-been.fuI'-l'l,isfied.by,stoGks.not,in, the Dow-Jones Industrial recent leaders have been gro have been laggards. Many of the overexploited in the 1960-1961 advance am declined sharply Those issues that v t y have done little marketwise since the 1962 lows . ong term growth potential have built up substantial potential base patte er st three years and have broken out of the patterns on the upside. The advance s b steep in many instances, and probably some consolidation is needed somewhere alo e line. The failure of the investment issues to participate in the earlier stages of an in ermediate term advance after a steep decline is not an unusual tech- nical phenomenon, particularly when the market is probably in the later stages of a long terr advance. An intermediate term advance of the present nature usually tops out with an ad- vance in the better-grade issues while the more speculative leaders go through a topping out process. We would expect the investment issues to show greater strength over the near future with the Dow-Jones Industrials reaching at least the area, and possibly higher We have not changed our long term opinion. We continue to expect a wide trading area for the foreseeable future. We considered the 850-820 level 'S a buying range and would be in- clined to lighten positions on further strength. However, ,we would wait until some signs of technical deterioration appear. This has not yet occurred. The stocks iii'olu' recommended list have probaBly shown above-averagection. Quite a few issues in the list have recently reached new high territory for the year. Included in this group are American Can, Cenco Instruments, Cluett Peabody, Crowell Collier, Litton Industries, Microwave Associates, National Can, Perkin-Elmer, Radio Corporation, Raytheon, Reynolds Tobacco, Shell Oil, Spartans Industries, J. P. Stevens, Sundstrand, Swingline and Varian AssociatesnStorer Broadcasting was recently dropped from the,list – at 66. We also have our quota of backward.lssues and t.he followmg SW.ltches are suggested Clark Equipment 45 1/4) into Clevite (44 3/8), Lykes Bros. (20 3/8) into First Charter Fi- nancial (22 7/8) or United Fruit (201/2), Metromedia (353/8) into Korvette (325/8), North American Car (271/4) into Signode Corp. (291/2). Dow-Jones Ind. 895.96 Dow-Jones Rails 219.18 EDMUND W. TAB ELL WALSTON & CO. INC. ., This market letter HI publlshed for YOUr convenience Ilnd informatIon Bnd IS not an offer to lIell or II. solicitation to buy Rny securities diBeuBlled. The in- formation was obtained from sources we to lit' rellahle, but we do not gUarantee Ita accuracy ,'alston & C(I. Inc and Its officers, directors or employet.'s may have an interest in or purchase and sell the securities referred to herem WN301 j t -. ,Xl.tit. –

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