Tabell’s Market Letter – April 15, 1976

Tabell’s Market Letter – April 15, 1976

Tabell's Market Letter - April 15, 1976
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– .. –.—— -, TABELL'S MARKET LETTER ,I \ ,I i – I g)e/aldd, .Y& akII 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF fill/ley l1,Om'''!1 fIC/ott .A11. MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICA.N STOCK eXCHANGE April 15, 1976 Wall Street is an industry given to nicknames. The billion-dollar companies with un- broken growth records which dominated the market in the early 1970's quickly became glamour stocks or the- hifty fifty' – The ba-s iclndUstrY-coinPariie'SwhlCli;a Cthe1974 76'-lfull'm'ai-K'etafenowbelfigdubbed .—- ' smokestack stocks. The table below documents the performance of a representative group of these stocks versus the Dow-Jones Industrial Average. As can be seen, all of them have outperformed the Dow on their rise from their late 1975 lows, and the bulk of them have dramatically outperformed the average for the entire bull market beginning in late 1974. Late' 74 Late '75 Recent Chg. Chg. Alcan Aluminum Allied Chemica1 Aluminum Co. of Amer. Bethlehem Steel Internationa 1 Pa per Low 19 24 26 23 32 Low 19 30 34 30 50 High 28 45 51 48 80 from' 74 47 87 96 108 150 from I 7S 47 50 50 60 60 Kennecott Copper 25 27 37 48 37 Kimberly-Clark 18 26 47 161 80 Monsanto Co. 40 69 98 145 42 Phelps Dodge 26 31 45 73 45 Republic Steel 22 26 41 86 58 U.S. Steel 36 58 89 147 53 Westvaco 19 25 48 153 92 Weyerhaeuser 24 35 50 108 43 DJIA 585 784 1009 73 29 I–I!-…,.– Since late March, however, the smokestacks have been producing fewer fireworks. The 'follo'wing table shows a '';c;ntTow-for thee-saine stocks-, the percentage retracem,mt of the 197576 move to date and possible downside objectives for the stocks, together with the percentage which would be re- traced if these objectives were attained. It should be noted that the objectives are not offered as fore- casts but as fairly pessimistic downside targets from a technical point of view, based on the patterns which have developed so far. The comments are based on technical factors only and further Information is available on request. Recent Possible Low Retracement Objective Retracement Alcan Aluminum 26 22 23 55 Allied Chemical 38 47 32 87 Aluminum Co. of Amer. 46 29 43 47 Bethlehem Steel 41 39 34 78 Internationa 1 Paper 70 33 60 66 Kennecott Copper 33 40 29 80 Kimberly-Clark 38 43 34 62 Monsanto Co. 87 38 76 76 Phelps Dodge 42 21 39 43 Republic Steel 34 47 30 73 U.S. Steel 79 33 64 80 Westvaco 41 30 34 61 Weyerhaeuser 47 20 44 40 It seems to us the above statistics explain a great deal of the market's current malaise, and.also,'why serious general market weakness.at this-stage.maynot be that)ikely a.possibility. A nor- mal technical rule of thumb Is that a retracement of a given move runs between one-half and two-thirds of that move. Most of the smokestack issues have to date retraced somewhat less than that, suggesting that further correction is necessary before their advance can be resumed. However, the downside objectives given, on average, indicate nothing more than a normal two-thirds retracement and in no case do they pro- ject prices below the late-1975 lows. What we are suggesting, in other words, is that, by and large, the distribution which has taken place in the issues so far indicates nothing more than minor downswmgs which would be limited in extent. This further suggests that the issues in question, once having undergone the normal corrections indicated by these minor tops may well be in a position to resume their upside leader- ship in the next phase of the market cycle. Dow-Jones Industrials 980.48 S & P Compo 100.51 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (4/14;76) 589.40 AWT/jb No statement or expreSSion of opinion or any olner matter herein contolned IS, or IS 10 be deemed 10 be, directly or Indlrelly, on offer or the sOlltltollon of on offer 10 buy or sell ony security referred 10 or menhoned The mailer 15 presented merely for the COnVeftienCiS of the subSCriber While e believe the sources of our Informa- tion to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herem Any action to be taken by the subscflber should be based on hiS own Investigation and Informollo'l Janney Montgomery Scoll, Inc, as a corporation, and Its officers Of employees, may now have, or may later toke, positiOnS or trades, respect to any seCUrities menhaned m thiS or any future Issue, and such position may be different from any views now or hereafter expressed m th or any other Issue Janney Montgomery Scott, Inc, wh.ch IS regIStered With the SEC as an mvest'nenT adVisor, may give adVice to Its Investment advlry and othel CUstomers Independently of any statements mode In thIS or m any other Issue Further ,nformatIOn on any security menhoned herein IS ovoilable on request

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