Tabell’s Market Letter – October 20, 1972

Tabell’s Market Letter – October 20, 1972

Tabell's Market Letter - October 20, 1972
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCI( eXCHANOE, INC MEMBER AMERICAN STOCI( eXCHANGE 'r– October 20, 1972 The downward slide, which has characterized recent equity markets, abated, at least temporarily, in last week's trading as the Dow-l'ones Industrial Average, after reaching an – intra -day -low 'of '91'7,;-.Q,7On T'uesday iadvanced 'sharply-late' Tuesday 'and 'early 'Wednesda'Y'. ' Again the impetus was peace rumors, and again the damper thrown on those rumors at noon Wednesday halted the advance. We have pOinted out in this space innumerable times in the past that the stock market has a long history of finding excuses for what it was going to do in the first place. Readers will forgive our cynicism if we voice some doubts as to whether the fundamental trend of stock prices really depends on where Mr. Kissinger happens to show up on a given morning. More- over, while remaining devoutly desirous of a cessation of Vietnam hostilities, we feel compelled to suggest that a number of problems currently facing the equity market will not necessarily be resolved by that cessation. ' Yet, to those bullishly inclined, it must be conceded that, once again, the market decline halted in just about the right place. The low 900's on the Dow have represented an important demand area throughout most of the latter part of 1972. The importance of that area would be reaffirmed by the ability to hold around current levels. We complete this week our review of the technical position of major industrial groups. Comments are based on technical factors only, and further information on all issues is available upon request. RUBBER – Major tire companies moved up relatively little during the 1970-71 advance and have since retreated, generally, halfway to their 1970 lows. The trading ranges thus formed have substantial upside potential, but recent relative action does not suggest the imminence of an – ups-idebreaKom. l I SAVINGS AND LOANS – This is one of the few groups that was able to break through to new high territory in the face of decisive general market weakness. Most indiVidual issues have now retreated from their highs and are fairly close to good support. First Charter Financial (30) Great Western Financial (30) appear attractive. SOAPS – Both Colgate(80) and Procter & Gamble (99) had been upside leaders, before their uptrends flattened out in the early part of this year. While relative action has continued good, upside objectives had been reached at recent highs, and at least partial profit-taking might be cons idered SOFT DRINKS – The same comment made above applies to this group. Relative action has been good, but the stocks have advanced sharply from their lows and objectives have been reached. STEEL – Steel stocks, baSically dormant for more than ten years now, possess a huge amount of technical potential, but also give no indication that that potential is likely to be realized at any time in the visible future. Some of the smaller companies such as Carpenter Technology .llll and Lukens (20) have appeal as long-range speculations, but the larger companies still appear uninteresting. – — '. . . ——– — .. -, — –TOBACCO— -Recent -ac.t.io.n.o.f-t,his group has been highly di-sappo-in-tin-g-. -However, the-sto-c-k-s—-I are off sharply from their highs and have reacted back to the major demand level around the top of their 1962 -71 trading ranges. Some rebasing will undoubtedly be required, but they appear interesting for purchase on weakness, ,in particular Reynolds Industries (51). UTILITIES – It is interesting that,while the Dow Industrials are headed lower, the utilities, by contrast, are flirting with their six month's high, probably the most positive relative strength pattern developed by the group since early 1971. This is interesting, since many issues are still available at historically low prices and provide relatively generous returns. Gas pipe lines suchas Rlnhanclle Eastern Pipeline (40) and growth issues such as Texas Utilities (33) appear most interesting for the relatively aggresive Investor at the present time. Dow-l'ones Industrials (1200 p.m.)932.57 ANTHONYW. TAB ELL S & P (1200 p. m.) 108.19 A1AT Cork DELAFIELD, HARVEY, TAB ELL No statement or exprenlon of opinion or Clny olher moMer herem contamed 1, or 1 10 be deemed to be, directly or Indirectly, on offer or the sohcltotlon of on offer to buy or el' cny security referred to or mentioned The motter Is presented merely for the convef1lence of the subSCriber While we believe the sources of our Informa- tion to be relloble, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any octlon to be token by the subSCriber should be based on tm own Inveshgotlon ond information Janney Montgomery Scali, Inc, as a corporation, ond Its officers or employees, moy now have, or moy loter toke, positions or trades In respect to any seCUrities mentioned In thiS or ony future ISSue, ond such posillon may be different from any views now or hereafter expressed In thiS or ony other ISsue Janney Montgomery SCali, Inc, which IS registered with the SEC as on InvUlment adVisor, may give adlce to 115 Investment adVISOry ond athel customers Independently of any statements mode In thiS or In any other ISsue Further Information on any security mentioned herein IS available on request

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