Tabell’s Market Letter – October 05, 1951

Walston HofJ'luan G-Goodwin(,',''''''',–,– .!,',.' ,', 1..!; , . – '-. — 0– ' –''–''-'—'–'''-''''-'Ti'). .-;1, -;,,,-!,-,,-,,,,, -i!kP!'-;J–l ,I /. NEW YORK 5, N, Y Q,YJ'N-e.6 (I'c PHILADELPHIA 2, PA LOS ANGELES 13, CALIF. SAN FRANCISCO 4, CALIF. k , 35 Wall Street 1420 Walnut Street 550 South Sprin9 Street 265 Montgomery Street F,- l I DIGBY 4.4141 PENNYPACKER 55977 . ,l',' TABEll'S MARKET lETTER ,, MADISON '.232 SUTTER '.2100 'h i 'C2'1 ,,G, \! ., ,',,1 i!.ij U The correction of the September advance to 277.51 in the industrials ;''and 87.04 in the rails ended last week with the industrials holding above – ';the 265 support level at the week's low of 269.08 and the rails completing ;, i','their needeq. consolidation at the low of 84.40. Starting Monday, the market; reversed its minor downtrend and moved ahead to the expected testing of thetj, i'year's highs. The rails rallied to a high of 87.73, a shade above the Sep- tr., /,tember high of 87.04 but still below February's high of 90.82. The indus- i', 'trials, at this week's intra-day high of 277.30, did not quite reach the J' ,' ,last month's high. The market appears a bit tired after its sharp five-day t.;;;Orfalalydaencdl i again appears in need of some ne should furnish some indicat consolidation. ion of the next Its action intermedi in ate case move. ;i,-E !F.- , Regardless of the sh0rter term action of the market, the general tech l'nical pattern remains the same. Most of the market leaders have reached ;,their upside objectives and appear relatively high when probable 1952 earn-/, ,.'ings are considered. Many of these higher grade issues have started to form, ,' ,potential distributional tops but others have only started such patterns. ; ,Therefore, the timing of a downward adjustment is uncertain. The timing is L, ,further complicated by the fact that the lower pr,iced issues have not yet ;, ;.;'had the usual market ,,;tributional pattern. rise that generally precedes the completion of a dis- ,t,,'c, ,j r Many of the secondary issues have favorable technical patterns and t'- 'i t is possible that issues of this type may advance over the near term. Thist, ,may hold up the general market for a few months longer but the technical , ,pattern suggests the probability that a stock market correction of at ;.. least intermediate term proportions is to be expected some time in the ,,'next six months. .' ( '!.-, ',t I ;\ Whether this probability becomes a certainty or not, it seems wise (, i;to make some provision for it in long term capital appreciation accounts. i ,'rhat is1 WhYdI advlocadte a Idarge biUYing pOiwther rteserve anhdiamlbuYtintg or hOIld- ,,;,t ing on y un erva ue secon ary ssues w s rong t ec n ca pa erns. , ';omentioned several issues of this type in last week's letter. Some of them, , , like Bucyrus Erie, Elliott, Fruehauf Trailer, National Supply, New York , Air Brake, Twentieth Century-Fox and Western Auto Supply have advanced 1–, –.! ,; ',moderately during this week's strength. J , l r,'.'!,, , 1'1above Other issues that appear are the following undervalued in addition to those mentioned ', ,, American News 34 Gray Mfg. 16 ; isw. i ;!/!!nlass it .-', Burroughs 17 Hewitt Robins 27 tc ' Carrier Corp. 23 Lerner Stores 26 ,; ; Certain-teed 17 Marshall Field 31 (, ,-,1 City Stores 19 McGraw Electric 51 . ' Columbia Broad. 28 Otis Elevator 38 ;';, ; Columbia Pictures 15 Poor &' Co. 19 ;' ' Cuneo Press 14 Smith, A.O. 36 ' I 1 Standard Steel Spring 23 /,' New addition to our recommended list. , i;;October 5, 1951 ;.' Dow-Jones Indus. ; Dow-Jones Rails 275.57 86.99 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ','b, I l ..!if; ;.' H -;; 'J Thh memorandum is not to b. condrued IiIS an offer or solidt.tion of off.r, to buy or ,II filly s.curiti.s From tima to tima Walston, Hofr,.riln & God… ir—-;;;;;- r\- /; have an inte,ut in some or all of the 'ecuri'le, mentioned herein. Th. for.qoln; material has b..n prepared by us as II matt., of rnfO'mdtl( lr'ly I. h btlsed r Ii upon information b.II…..d rellabl. but not neuuflrily compl.te, Is not ;uaran…d .. aceur. or final, and Is not Intended to foreclose independt'lnt ;r-qulry -v,,',,l.,,',.,,,c'I,,,,,',',-',.,',.,,',',',-',',',',,'- ., .,.,','',,,',',,',',,,-.,',',,,,' ,',, . .,.. ,',II-,''C.,',,,,7// ,- I'-'—,.;-,.,..'-.,,'i-… ',,..,.';,j-,,../,'C'/i,I,i!'.f,—-7','.,','- ''-'I/(,,' ,', ',.'…\;