Tabell’s Market Letter – May 29, 1953
View Text Version (OCR)
r, MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO (Swdaodl OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TAB ELL'S MARKET LETTER The Dow-J-ones iilaustrials were unable to penetrate the overhead re- ,oj ilta.;,ce and, in five successive days of decline, lost most of the gains Lrcm the April low of 269.25. The week's low was 270.65. The rails put in better performance and, at the week's low of 104.53, were more than three , point B above 'i;he April low of 101.02. , Tre marlet' s inability to move ahead is a bit discouraging, but the volume on t08 decline was small. The market picture has not changed. In- . di vl1\l!3.I iseues will continue to have their own individual bull and bear ma-r'ke-cs tnciependently of the general trend. A group that still appears to be in a downtrend is the oils. Readers of ttis letter are familiar with my reiterated advices since late 1951 to sell this rou1;l. Some of the declines have been substantial since that time a Hitr!,2'3 – 1951-19x Hi.b. Recent Low Decline Amerada 235 161 3l;b Clties 3ervice 120 1/2 -Jid-Co;-l'i;inent ecroleum 81 3/4 80 5/8 57 5/8 30 30 Sta.nc; . Oil of' Indiana S' t an-I. Oil of rr.J. 92 85 69 7/C 68 I 24 20/a!. .Some of the declines have already been of bear market proportions,but .'rom a technical viel-lpoint, many of the oil and petroleum issues still look 1 ower. 8,uotec below are a number of examples frol11 my Technical Analysis of' the Price Action of 400 Common Stocks. Approx. DOI1nside Upside Possible Possible Price Yield Poten. Poten. Advance Decline !V,Co1tinental Pete. 60 6.7 50-45 65-66 Stanc1.01l of rr. J. 71 6.0 67-58 72-75 25 18 The diocouraging part of the technical patterns of this group is that f.'1;e1' the declines occur, it may require considerable time to build up new base )2.tterns. This has often happened in the past. For example, Socony i.;ac;uum held for almost five years between 1945 and 1950 in an area bounded ',clUg'.-J;f by 14 and 20 in building up the base necessary for the rise to 40. 1\ l('!lg 'eaccumulation period may occur again after the stock reaches its low. t;'h,re i'3 also heavy overhead supply above the market in most oils so it 1Olld 8.ppear that any near term advance would be limited to 6 to 10 in r,0f't, cass. This does not necessarily mean that all oil stocks are going to -,)(1111. ,special 13ituations like Pacific lestern Oil could move higher on 0e\'clopnent in its new field. Other discovery situations both in Canada and be' could rie in price on news developments. However, it appears that the 1ol'gc) ojl companies still have unfavorable patterns and should either be .0Jd o stregth or switched into other situations with more favorable pros- )ec t;. 'or example, the two issues below appear to have better appreciation por.'3'bi.lities and defensive Qualities than the two issues listed above ,.pprox. Downside 'Jps.de Possible Possible tJ,;,dh Aviation -P-ric-e Yield 60 6.3 Poten. Poten. Advance Decline 55-52 80-90 50 13 Jobns r8,nville 63 6.6 63-59 85-100 59 7 Other possible slitches include Price Yield j\tlantic Refining CO'1clnental Oil (;J1 f on Ll;r.bla n…,-lL, 01'0 on -UJ.; IJt 1 Shell Oil )tand.Cil of Ind. 30ony Vacuum Sunr'ay Oil Texae Company Unicn on of Cal. 29 57 46 66 54 55 69 70 34 19 54 40 69 4.4 4.3 3.3 5.6 if, 5 4.4 3.5 5.8 6.2 5.4 5.0 IL'I'G lue Yl'US J 1I'1e -P-rzicre- Allis Chalmers 53 Vanadium 40 Great North.pfd. 55 Alpha Port.C. 48 Armstrong Cork 54 Louis & Nash. 61 Chic.Rock Island 74 Crane Company 31 Blaw Knox 20 Elec.Auto Lite 46 Babcock & Wil. 39 Yield 7.4- 7.5 6.0 7.3 6.3 5.7 7.4 5.4 7.3 6.3 6.5 5.1 EDMUND W. TABELL hay 29, 1953 WALSTON & CO. This book is not for general distribution, but is available for PQ'saJ at ymlr nearest Walston Office ThiS memor.. ndum IS not to be condrUCId as !In offer or solicihtion of oHers to buy or sell !Iny securIties. From time fo time W!Ilston & Co. or !Iny partner thereof, may have an mterut In some or III of the securities mentioned herein The foragomg matenoal has bllen prepared by us 4S a matter of Information only It I blsed upon information believed reliable but not necessarily complete, is nof guaranteed as accurate or final, lind IS nof intended to foreclose Independent inqUiry