Tabell’s Market Letter – July 28, 1967

W—a-lrsntocn.-&-C–o-. TADELL'S MUNICIPAL BONOS UNDERWRITERS MUtuAL FUNDS Members New York Stock Exchonge and Other Principa' Stock and Commodity Exchange. MARKET LETTER' OFFICES COA,ST TO COAST AND OVERSEAS July 28, 1967 As far as the general market is concerned, recent action seems somewhat inconclu- sive Th week of July 17-21 featured a sharp rally in which most of the popular averages attaIned hIghs around or slightly above their May, pre-Near-East-crisis peaks. The rally was led by Dow-type stocks and, while the averages were strong, declines tended to exceed advances. By the end of the week, most of our shorter-term indicators indicated an over- bought condition. A rather sharp decline on Monday ensued, and the rest of the week saw action directly opposite to that which had occurred in the previous week — the averages moved sideways while advances tended to exceed declines and impressive numbers of new highs in individual issues were – — — 1- We are dubious about the prospects for an immediate continuation of the overall market advance. The overbought condition of a week ago has not yet been corrected, and we feel that a moderate downswing, or at least a consolidation, should occur before another attempt to breach the 1967 highs, – this time, perhaps, decisively, takes place. While the immediate future is a bit clouded, we do feel, however, that a distinct change in the market's character has taken place. A great many new stocks are showing im- proving techr.ical action, while a number of former leaders are exhibiting market of technical deterioration. We are, therefore, commencing this week a review of major indus- trial groups with short comments on group action and notes on the technical patterns of typi- cal individual issues within each group. This will be continued in subsequent issues of this letter until all groups have been reviewed. Issues marked with an asterisk () are on our Recommended List. AGRICULTURAL EQUIPMENT – Group relative st e 0 s poor and there is little prospect for immediate price improvement. appear available elsewhere. VJ, ap lation op.portunities AEROSPACE – Long-term group upward and at a faster pace tile dIPS can be used for purchase. mics 92, Grumman 70, Loc ee – – AIRLINES – This roup, r t '. we. not,ed. Any further 1 e es are Boemg 175, General Dyna- las 70. e ket leaders over the past two years, has shown distinct signs OD d not too far below c e I cent weeks. Downside objectives in most cases are I e think relative action may continue to deteriorate and that other areas offer 0 e a tion. ALUMINUM – R a of this letter are aware that we have been favorably inclined toward this group, alt gh we must admit some disappointment over the recent action. None theless, major issues are close to support levels and we would continue to hold and buy on minor dips in long-term investment accounts. AUTOMOBILES – The graup trend is distinctly upward, but action relative to. the overall market has only been average. We can envision trading rallies, but would prefer to use strength to switch aut of these stacks in longer-term accounts. AUTO EQUIPMENT – In general, these stocks laak more attractive than the automo- bile companies. We continue to favor Eatan, Yale & Towne, ESB, Inc., and Kelsey-Hayes . BUILDING MATERIALS – We feel recent strength in this group has been premature and more work will probably be required around current levels. Other issues offer more attraction for long-term capital gains, o.ur opiniS'!!,. CHEMICALS – Price action within the group is diverse. We feel that industrial gas companies, such as Air Reduction , Air Praducts and Chemetron are attractive as are special situations like' Olin Mathieson and Hercules, Inc. Mast of the majar companies, however, will prabably require mare time to complete their bases, and switches on strength should be considered. COAL – Largely unsung, this group has been one of the relative strength leaders over the past year. Upside objectives are higher in most cases, and we would be inclined to hold positions. COSMETICS – Another group showing superior relative strength action. Lanvin-Charle of the Ritz and Rayette-Faberge are approaching upside objectives, but Revlon still has a higher indication. Avon Products remains in its consistent long-term uptrend. Dow-Jones Ind. – 901. 53 Dow-Jones Rails – 272.38 ANTHONY W. TABELL WALS;roN & CO. INC. 1I'D,.1nfTobrlma amtioanrkmw. ale., tMtoebrvtaeIl.naenpduIbfnrlltolemhre.edn.ofIuonrreoYersOpUwur peccohbnaevalieeenvaieenndtcoeRblaientdhreeIlni8afeboelreum,riabttiueiostnrweRefenlddToeIsdnntooot thIreaUrDeIilrnoa.fnfetere tiots sell 01' R solicitation !Lccur.NlY. Waleton t 4 oCbou.,y Rny Inc. asnecduritistieosffdiclsecrus.eadeidr.ecTthore. In or