Tabell’s Market Letter – March 04, 1966

TABELI,'S Walston &Co. Inc ….;;,…….;;,,,,;;- INVESlMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS MARKETLEIlER. March 4, 1966 Recent tradirig sessions have provided the most exciting and perhaps the most important stock market action in many months. The traditional year-end rally reached its zenith when the Dow-Jones Industrial Average reached a high of 1000.55 on January 19, 1966. After a short decline this high was equalled with an intra-day peak of 1001.11 on February 9, 1966, just sixteen trading days ago For thirty trading days in January and February the Dow had held, almost without exception, in the broad 980-1000 range with volume extremely heavy. Eight days ago this range was penetrated on the downside. sU1JseqgenLdrop was preciQitous;. Thursday, the decline has been 7. 8 in fifteen trading days. was a 1IIl1.l experienced in the first fifteen days of the May-June drop when the comparable decline was 7.2. A rally on heavy volume in Thursday's last half hour ran out of steam on Friday, and the market declined again to close the week at 932.34. The stock market could well, we think, be approaching a very important juncture. Fir of all, we do not believe that the current drop is going to develop into a full-scale bear mar- ket, ending the upswing which began in October of 1962. It is quite possible that we are now entering a transitional phase, and tha t the next rally couldafford the first signs of deteriora- tion that mark the bull market's end. However, more time appears to exist. It follows, then, that the bottom of the present decline, when it occurs, will become an important buying opportunity for equities, much as the bottom last June offered the best such opportunity in a number of months. It appears appropriate, therefore,to side risk that exists from current levels. the degree of down- W0 The end of this week saw the Dow-Jones Industfial fr.- e a em some support at around the 930-928 level, mentioned in last week's It e possible that a base form in the present area and an advance will se levels. Such an advance could very likely prove abortive. — We are not – if- aTket;-however;-and-we-would-prefer711-. for the time being, to present decline is complete. t the market may move lower before the downside target at the moment appears to be 910-890 in te es necessary at a later date to revise this think- ing, we will do so However, as no yty . ove such decline will probably provide a good buying nity. It is probably nec ss to start thinking at this point about the appropriate stocks to which buying reserves be committed on any further weakness. Listed below are seven- teen issues which we believe would be appropriate purchases on any market weakness, to- gether with present prices and projected buying levels. The letters H, c and s stand for Highgrade, Capital Appreciation, and Speculative Recommended List. The stocks will be added to the appropriate list if the buying levels mentioned are reached. Also listed (at the end of the list) are nine issues already on the list, which would appear especially attractive for new purchases on weakness. IAir Reduction (C) Present Price 71 Buying LeveI 65 !Parke-Davis (H) Present Price 38 Buying Level Allegheny Ludlum (C) 48 Howell (C) 44 45 40 (C) 37 1, Union Bag-Camp (H) 51 34 47 , & (SH)ecla (S) 20 33 (S) 26 Colt Ind. (S) 23 Cyclops Corp. (C) 44 Dayco (S) 28 \Ex-gll;.,O (C) 60 'Great No. Paper (S) 45 No.Am er. Avia. (H) 59 -IOlin Mathieson (C) 58 Dow-Jones Ind. 932. 34 18 27 23 19 38 24 55 38 55 55 West Va. Pulp (C) 53 Alum. Co. Amer. American Bosch Crowell-Collier Disney (Walt) General Dynamics Revlon Reynolds Metals Riegel Paper Sundstrand 86 31 45 54 57 50 53 23 42 ANTHGNY W. TABELL 48 80 28 41 50 50 47 50 21 39 Dow-Jones Rails 259.90 WALSTON & CO. INC. A\VTams This market letter 18 published for your convenience Mld Information and is not Rn offer to sell or fI. solicitation to buy any &eeUTIl\es dl8eURRed The Ln formntlon was obtamed from sOurces we to 11;' rehable. but we do not gURNLntee its accuracy. ''Valstoll & Co. Inc nnd its officers dlre'ton; or employees may have an interest in or purchase and sell the securitle; referred to herem. I