Tabell’s Market Letter – September 16, 1966

Walston &- Co. nl-E- ;' , 1 TABELL'S MARKET 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 September 16, 1966 For the fjrst time in a good many weeks the stock market was able to turn in a solidly impressive performance on the .upside. ' In six .days the Dow-Jones Industrial Average has advanced almost 40 points, including a l5-point advance on Monday, and a 10-point ad- vance on Wednesday. During the period', daily advances generally outnumbered declines by important amounts and strength in a feature. many better-grade blue chip issues was a welcom As the pattern has unfolded over the past week, the shorter-term technical picture has clarified a bit. At the moment, the most optimistic upside projection one can make for the Dow is somewhere in the 830-835-range ascomparedwiththisweek's intra-day high of 822.93. In order for the base to broaden further, a good deal more backing and filling will probably be required. The overall posture adopted by this letter during the recent market decline should be familiar to our regular readers. Basically, we have pointed out that a grea t many stocks had reached extremely attractive levels at their recent lows, and we have advocated over the past month a policy of buying selected stocks on weakness for long-term holding. With the market having advanced sharply over the past week, we feel it necessary to stress the operative phrases on weakness and for long-term holding, We continue to feel that the market generally could well be in a major long-term bottom area. We still think, however, that there are a number of uncertainties about the immediate picture. In this connection, a study of past market bottoms A glance at a chart book covering the summer of 1962 or, indeed, cover g h period 1946- 1949, will show that a great many stocks continued o;rdo n 10 e ter the Averages reached their bottom. We would not be at all e e' sort of thing occur at the present time. There is, in other words, of issues, especially in some of the more of risk present in a number 'Jrt'g; issues which led the market advance h st' etain-largehold-ings,in these issues might well be advised to utilize ir portfolios of this type of risk element Selection of issues vestor's activity o v h r our Recommended's Account Executive e is e should be an important part of the inn and to this end we have been reviewing stocks in – copy of this list will be in the hands of your Walston In the case of al all stocks on the list, downside objectives have been reached, or approached, and a urther risk appears to be limited. The recent weakness, however, has destroyed the technical pattern on some issues so that recovery action may be rather slow. We are, therefore, eliminating seven issues as follows Chesapeake & Ohio from our Quality & Long Term Growth section; Atchison, Topeka & Santa Fe, Warner Brothers Com- pany, Interstate Motor Freight, Kansas City Southern from our Price Appreciation section, and Budd Company and Foote Mineral from our Speculative Price Appreciation section. It must be stressed that further risk in these issues appears limited, but we feel that upside attraction in other issues may be greater. We are presentl y considering a number of stocks for addition to the list. Among those which will probably p.e in.the near future, are Addressograph- Multigraph and Minnesota Mining & Manufacturing in the Quality & Long Term Growth section; Anchor Hocking Glass in the Price Appreciation section, and Home Oil Class A in the Speculative Price Appreciation section. In addition, those stocks already in the list which appear attractive for new purchase on minor dips, include Air Reduction and Reynold Metals, reviewed last week, plus Chris-Craft Industries, Copperweld Steel, Crowell-Collier & MacMillan, Gillette, Illinois Central Industries, Metro-Goldwyn-Mayer, Olin Mathieson Chemical, Revlon, Robertshaw Controls, Schlumberger, Sharon Steel, Union Camp Corpo- ration, United Fruit and Wallace & Tiernan. Dow-Jones Ind. 814. 30 Dow-Jones Rails 201. 68 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thia markt letter is published fOT your convemence and mformation and Is not an offer to sell or 1\ solicitAtion to buy any l!eC!urities discussed. The in. format.lon was obtained,from sources we btlieve to be rehable. but W(l flo not guarantee Its aCcuracy. Walston & Co. Inc and Its officers, directors or eml'loye(!s )nay have an mterest m or pureha..se ani! sell the secUTltll.'S referred to berem WN801 , I Ii , ,d