Tabell’s Market Letter – July 13, 1951

fjJ(1;''-' ,k!&C;,,'7!;trp'lr/r'!J!Jr'J WoIsto11.Hoffm 0 11 &- Goodwin ;(f;t.tJ'2',,t'f';;;i'S.;'iJ'1'Jif,Ji'fJ. ir;; NEW YORK 5, N, y, w.u/t-6d Cfoce PHILADELPHIA 2. PA LOS ANGELES 13, CALIF SAN FRANCISCO 4, CALIF, l1i' r.f, 35 Wall Street 1420 Walnut Street 550 South Spring Street 265 Montgomery Street ! '1'1/41. DIGBY 44141 PENNYPACKER 5-5917 MADISON '232 SUTTER 12700 J., l TABELL'S MARKET LETTER &f The market has staged a rally from the June 29th lows. At 'fi! IJi the week I s highs of 255.36 and 76. industrials have .recovered approx !(1'Ji mately fourteen pOints The rally has occurred and the on very rail average has advanced roughly six small volume, averaging little better point( than ! l;o/i million shares daily. The important test will be met shortly when the in- ti jt!, dustrial average attempts to penetrate the heavy 255-258 overhead supply. !i A summary of technical patterns of some of the more important !!Ji3i i.'( groups is given below 1;'; AIRLINES continue in a long term uptrend with ultimate objectives 1 iYi! considerably above the year I s highs. They appear to be in a consolidating ;1., 'ili;;1 phase at the moment but should be held and purchased on minor setbacks. AUTOMOBILE issues look lower. Long term upside objectives were i; reached late in 1950 and fairly sizable tops have been formed. General i';'i 17 rJ l,'' Motors, which this letter recommended in the 25-30 area and advised sale at.;; r; 52-54, has formed what appears to be a distributional top and indicates a ; e; probable decline to 40-37. There is no technical reason to buy this group )-;, Ei,.,' except for trading rallies. i';;, rii term BUILDING MATERIAL stocks on the other hand have technical patterns. The potential upside objectives very stlrong long are 50, to 100 ;-,i,i 'i. above present levels. There is no indication when this move will take place it; but there is also no indication of a decline of importance. This group t7 ;1 ii.i iJ should be purchased on minor declines. CHEMICALS have been one of the best acting favorable growth potentialities. However, they are groups because now selling at t; hoifghthei\ff) price-to-earnings ratios and yields are small. Technically, the majority iiii lv1, of these issues have reached their long term price objectives and appear t A i,l offer only limited possibilities for further advance. They have ,not, as yet!. dil built up important distributional tops. 'ti ii COPPER AND METAL issues have not reached long term upside object- tt;;; ives, but appear to have formed intermediate tops that indicate moderately Ii;; lower levels. Kennecott, for example, indicates a higher long term objectf,!;' !, ive, but may decline to 60 first. !i I;Ii of the ELECTRONIC AND TELEVISION stocks have television companies with less emphasis good long term on electronics pat may t erns work .Sloomw )l! first because of poor second and third quarter earnings. Issues of this tY' 9,' like Motorola and Philco, should be bought on weakness. Issues strong in ; electronics like Sylvania and Radio show indications of only minor price fii! dips and should be bought for much higher long term potentials.' r1;i1;1 bought MOTION PICTURES are for sizable long'term forming strong appreciation. base patterns and should Patience may be required be but i't ,q';i; i; Ii, yields are good'. ;17 ic' OFFICE EQUIPMENTS have favorable long term patterns and have good tt ;f'h defensive qualities. F(,,' t;;,W, OILS have diversified patterns. The majority have reached their ,); long term upside objectives and appear high enough. A few individual issu!f ii\';, may still offer profit possibilities. Only minor tops have been formed but ;;; the group appears in need of consolidation. l t PAPER stocks have similar patterns to coppers and metals. (Y ;'/' \i. much RAILS have been in lower than 70 but some a downtrend time may be from requ i 90 red to 70. They do to consolidate not an d indicatEf,' form I H base patterns. Selection is iinportant in this group. f- /; STEELS 'look 'lower but a obd part of the dec line has already b, !,, occurred. U, S, Steel reached its long term upside objective at 47; The ul ti-';, 11;;mate downside objective is 35-32. Recent low was 37 5/8. After lows are \;'; reached, considerable time will be needed to form bases. The group is not !!''ii, ! attractive for other than trading rallies. lfi ff.,;7i appreciatUioTnILpIToIsEsSibciolmitbiiense . good defens Appears to ive qu offer alites, above fair yields and average safety.. modest f,, ir The diverse patterns of the groups mentioned above indicate that i 11;1, the policy advocated by this letter should be continued. There is no need \1 Wii,to disturb long ii/Ii funds should be term inve invested s i tment n defe accou nsive nts whe issues re o r incom kept e l is paramount, iquid. Interm ebduiat tenew11;; r';iiterm capital appreciation accounts should be 50 invested in favorable grouJlj . .i1!and 50 liquid awaiting buying opportunities. EDMUND W TABELL V ,'.F llJThyh 13,1951 memorandum h not to b. construed al an off'!t or solicitation of Off.fS to bu, or lell any 1.curliI.A 'ih'rScm'l'OtlmN tolItiOmFe;WrapWnl..t.fo&'ffmGaOaQool'WctWTTnI! may Ii F ,Y! have In In'',.,' In 10m. or .11 of the .ecuritie. mentioned her.ln. 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