Tabell’s Market Letter – November 15, 1968

W—a-lsItocn.&—C-o-. FI L e. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER. 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER November 15, 1968 Recent market strength has been impressive and consistent with the theory of a ma- jor uptrend's being in effect. Advances exceeded declines on all four trading days of last week and the major averages closed the week at or around new highs for the move,cancelling out the entire pre-election decline. Yet there remains the lingering suspicion that the modest October-November correct ion, encompassing only eight trading days and retracing less than a third of the Ill-point August-October move in the Dow, is insufficient fully to correct the previous rise. The re- cent rally, furthermore, began from levels which, under no circumstance, could be called 'Oversold- Under th-e-se' conditio'ns ssilJility'of -riea'r-term'weakne1!rCannot be'overlooke although it must be emphasized that such weakness would constitute nothing more than a tem porary interruption of a now-clear-cut major uptrend. We are concluding herewith our re- view, started four weeks ago, of major industry groups. , Relative strength of the Publishing group has generally been below average, and we would prefer to avoid commitments in this industry. Patterns building up in the Railroad industry are generally attractive, and although no immediate moves are indicated, purchase on weakness for patient holding could work out well. Penn-Central (62) has returned to a support level in the low 60' s, and such carriers as Seaboard Coast Line (49), Southern Railway (65), Chesapeake & Ohio (72) and Nor1hern Pacific (57), appear to be completing attractive long-term base patterns. Retailing issues, benefiting from the resurgence in consumer spending, generally present strong patterns. In the department store group, Stores (36) has recently moved back again to the support at around th 5 1 stock has a longer term objective of 62. May (44) with a long-term 7, is 0 interesting. In the mail order group, Sears (69) might be subject to nea – m we ss to the mid-60's, but appears attractive for purchase on dips. s its sharp rise, still has a higher long-term objective and should bell . ou ains show mixed patterns, but Vornado (26) appears to have – 0 .- ct-c orfhe past J. ;in the variety-chain group, , Rubber stocks are ano . e..ctMn a technical pOint of view. . . t major groups on an intermediate-ter basjs, a!l most of th e – e issues constitute attractive purchase candidates. Firestone (61) ha 0 I s gest pattern with a long-term objective of 86 followed by higher levels. Go r 6 's also attractive, but Goodrich (44) appears to be lagging behind the rest of the i d Y and should probably be switched into either of the two above i-s,sues. Armstrong R r (58) is an interesting smaller special situation. . . Action of the major Soft Drink companies, Coca Cola (71) and Pepsico (49) is poor, and they probably. should be considered as switch candidates. stocks present an interesting picture. They have lagged the market for almost a decade, but the potential bases are huge and preliminary signs of a relative strength up- turn are apparent. We are inclined to consider the group, at worst, interesting for the pa- tient investor, arid possibly of the interest of the more aggressive investor as well. , Textile stocks completed a needed' correction at their lows of last Summer and appea on their' way to higher objectives which are, almost uniformly, above current levels. We re- gard ,Burlington (49) and American Enka (53) as especially attractive. Althpugh action will probbly be slQW, iPe Tobaccos higler !el..2vJ'! the lo.ng. term and, wit,h a minimum of downside risk, should be interesting for the income- oriented holder. ' , . Utility stocks present an extremely interesting picture at the present time. The Dow- Jones Utility has held, since early July, in a narrow range between 130 and 132. This range was penetrated early this week by a sharp upward move which reached an intra- day high of-140. 47 on Friday.' This is especially interesting in view of the longer-term pattern which indicates that a base has been in the process of formation in the 120-140 range ever since the 1966 lows. Decisive upside penetration of 140 for this index would indicate an upside target of 163-174. Individual stocks also have substantial bases and a few have begun to break out of these on the upside. We consider the utility stocks to have above-average at this juncture. !Jow-Jones'Ind. 965.88 Dow-Jones Rails ' 271. 83 ANTHONY W. TABELL WALSTON & CO. INC. —.; '. Thl.- market letter is published for your conve-nlenee And InformAtion and IS not an offer to sell or R solicitation to buy an), IleCUrltiea Iilscuea.ed The In I 0;formation wal obtained from aourCH we believe to be reliable. but we do not IlUArantee its Olecurac)', Wal.ton &\; Co., Inc. and Ita ofl'lcen, dlr'edor. C!!IIployeel may have an interest in or pUl'chue and &ell the aeeurltlea referred to herein.