Tabell’s Market Letter – January 08, 1954

— Walston &Co. EMBERS NEW YORK STOCK EXCHANGE ANO OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADElPHIA LOS ANGELES SAN FRANCISCO LUGANO (Sw'hedoodl OFFICES COAST TO COAST CONNECTEC BY DIRECT PRIVATE WIRE SYSTEM TAB ELL'S MARKET LETTER January 8, 1954 The market appears a bit tired and in need of some further correct- ion over the near term. For the third time since December 4th, the Dow- Jones industrials met resistance at the 285-286 level. Also, at the same time, the rail average failed to better its previous high for the third sucessive time. This action is illustrated in the table below Dow-Jones Industrials Dow-Jones Rails December 4th December 16th January 6th 285.20 284.69 285.67 99.49 97.75 97.02 Of course, this unfavorable action could be quickly reversed,but \ until it is, a certain amount of caution seems warranted over the near term. Other indicators also have cautionary patterns. The intermediate term indicator gave a sell signal early in December and this signal has not yet been reversed. Last week the short term indicator also gave a sell signal. The breadth of the market studies of volume, advances and declines, highs and lows, have also turned down. All of this signals a loss of upside power and the possibility of a technical correction of the advance from the September lows. In terms of the Dow-Jones industrials, a one-third correction of the thirty- point advance would bring the average back to 275 while a two-thirds correction would amount to a return to the 265 level. The 27 indica- tion appears to be the more probable. All of this, of course, applies to the nearer term trend. As expressed in last week's letter, I believe the longer term outlook is favorable and any weakness should be looked upon as a buying opportunity. I have received a number of requests for a list of light blue chips of the type mentioned in last week's letter. Noted below are a few issues that, in my opinion, fall into this category. The first column is the approximate price, the second column shows the indicated dividend rate or amount paid in 1953, and the last column shows indi- cated yield . Addressog Allegheny r aLpuhdlum 57 28 Allied Stores, 38 Allis Chalmers 45 Alpha Portland 44 Amer. Radiator 14 Babcock & Wilcox 42 Blaw-Knox 18 Bucyrus Erie 22 Burroughs 16 Chain Belt 34 Combustion Eng. 45 Container Corp. 44 Cornell Dubilier 22 Crane Company 29 3.00 5.3 Deere & Co. 2.00 7.2 Eagle Picher 3.00 7.8 Elliott Co. 4.00 8.9 Flintkote 3.00 6.8 Joy Mfg. 1.25 9.0 Mead Corp. 2.00 4.7 Motorola 1.20 6.7 Na'l Gypsum 2.00 90 N'. Y.Air Brake 1.00 6.2 Penn-Dixie C. 2.50 7.3 Radio Corp. 3.00 6.6 Shamrock Oil 2.75 6.3 Sylvania Elec. 1.35 6.1 Western Auto 2.25 7.7 Yale & Towne Plus Stock Dividend 25 19 24 26 33 28 30 21 18 37 23 41 32 47 37 EDMUND W. TABELL WALSTON & CO. 1.50 6.0 1.50 8.0 2.00 8.3 2.50 9.6 312 9.5 1.80 6.4 1.50 5.0 1.40 6.6 1.60 8.9 230 6.1 1.20 5.2 2.40 5.8 2.00 6.2 3.75 8.0 2.50 6.7 I will make a guest appearance on America Speaks, WOR-TV (Channel 9) Tuesday, January 12th, between 10'30 and 11,00 P.M. The other participant will be Professor Lewis Haney of New York University and columnist for the New York Journal-American. Don Passante is the moderator. The topic for discussion will be Are We Heading Towards an Economic Recession t f ff t b II IIny sec.url!lU From lime 10 hme Walston & Co, or any partner theeof Til,s m,lY memorandum IS not 10 be h,we an Inferes! In lome construed or 1111 of as an offer or sol,c.t Ion 0 0 erl 0 the securltlU mentioned herein Th,e uy or 5e foreqo,lnqd mlll Ie, ill lidS been prepllred ale or final dnd 1 by not us ,H /I matter of til/ormation only 11 's Intended to foreclose Independent InquirY b,lI(!'d upon ,niormo'lhon beheved rcllo'lblc bul nol necu,!lrlly complele, IS no guaro'ln ce 0'1 a cur ,