Tabell’s Market Letter – August 09, 1985

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 August 9, 1985 I..,,-.,..,o,;n, .TusdaFyu.rtheOr us!,ojftnleisnsgcihsa..rJahic'tte.r.i,z.etd.trheisenwLleoewk.'sa market, round-1 centered 325,. shou l a d roundI -hold – 'fva;.rbr.0ad!tii6.'-&'';deculirnee,,,.,..-l-. -18' a potential for broadening' of the top to take place within the 1325-1340 range, and trading in that area followed by a downside breakout would be disturbing. Weakness, as we have been pointing out. has been concentrated in the deflation-hedge stocks that have been market leaders for the past year, and we undertook, this week, to analyze the point- and-figure patterns for 119 such issues. The stocks chosen were S at P 500 components in the Soft Drink, Drug, Food, Retail, Soap, Utihty. and Financial groups. It should be noted that, on a malar-trend basis, 98 of the 119 issues remain in up trends , and only five are in major downtrends. On aminor-trend bass there has. however, been some deterioration. Forty-two of the issues, or 35, are now in minor downtrends, despite the fact that only 27 of the 1500 stocks we follow are currntly in such trends. What is significant. however, is that, by and large, the downside objectives of these minor tops are being reached. The following table gives minor down- side objectives for the 42 stocks and the percentage change that reaching that objective would produce. An asterisk signifies that the objective has already been reached. It is interesting that the average risk, for the time being, appears to be something just over 5. Stock Close Dwnsd Stock Close Dwnsd -Ameritech 8/8 Obj. Risk 87 '/g- 9.20 Macy R.H. 8/8 Obj. Risk 6.67 Bankamerica 15 15 – Mercantile Stores 62 59 4.84 Bell Atlantic 87 88 – Mid. So. Uti! 11 10 9.09 Borden 37 34 8.11 Morgan JP 47 45 4.26 Bristol Myers 58 56 3.45 NYNEX 81 74 8.64 Cigna 54 50 7.41 Oneok 29 27 6.90 CNA Financial 51 48 5.88 Pac. Lighting 41 36 12.20 Campbell Soup 37 33 10.81 Pac. Telesis 72 74 – Capital Holding 21 18 14.29 .' ,. Eastern 3 4 ' 35 – hH. Con Nat'l Gas 40 36 O'.' 10.00 ./ .U 51 48 – Dayton Hudson 38 37 2.63 Quaker 48 44 8.33 Enserch 24 21 12.50 Ralston Purina 41 38 7.32 1st Instate Bancorp 47 42 10.64 Sonat 34 33 – Gen'l Foods 75 70 6.67 SW Bell 78 81 – Gen'l Mills 56 56 – Texas Commerce Bank 33 28 15.15 Heinz H. J. 52 48 7.69 Travelers 43 42 2.33 Hershey Foods 44 43 2.27 U. S. West 77 77 – Internorth 41 38 7.32 Upjohn 111 110 0.90 Kellogg 53 52 – Warner-Lambert 38 38 – Lilly Eli 82 76 7.32 Safeco 39 39 – In addition, 29 of the 119 stocks find themselves in neutral or sideways minor trends. These issues are listed below together with the downSIde breakout points. Were the top-broadening mentioned above to take place and these breakouts reached on a wholesale basIs, additional weakness in the defensive/consumer sector could be anticipated. Stock — American General Close 8/8 Downside Breakout 30 Stock Flrst Penna Close 8/8 -6- Downside Breakout 4 American Home Prod 59 57 GTE 40 38 Associated Dry Goods 63 60 Interfirst 11 9 Bankers Trust NY 66 66 Lincoln Nat'l 42 37 Barnett Bank, FLA 35 35 MEl Corp 40 36 Chemical NY 39 36 Manufactures Han 37 35 Citicorp Clorox- – – . 46 36 46 34 May Dept Stores NCNB. . 49 39 41 38 Coastal Corp 32 30 Phila Elec 15 13 Columbia Gas System 30 26 Proctor & Gam ble 57 50 Con Edison 33 31 Sara Lee 40 36 Continental Corp 41 38 Sterling Drug 30 29 Dart & Kraft 34 33 Texas Estrn 32 30 Federated Dept Store 58 56 USLife 38 34 Flrst Chicago 23 20 Dow-Jones Industrials (12 00 p. m.) S & P Composte (1200 p.m.) Cumulative Index (8/8/85) 1322.58 188.65 2590.11 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or e1preSSIon of Opinion or any other matter herein contained IS or Is to be deemed to be, dlreclly or Indirectly, an oller or the solicitation of an offer to buy or sell any secunly referred \0 or mentioned The matter 15 presented merely for the convenience of the subscriber While we believe the sources 01 our Intormatlon to be reliable. we m no way represent or guarantee Ihc accuracy horco! nOI 01 the statements made herein Any aellon 10 be taken by Ihe subscriber Should be based on hiS own investigation and Inlormatlon Oelafleld, Harvey Tabell Inc as a corporallon and liS ollicers 01 employees, may now havo or may later take, pOSitrons or trades Ifl respect to any seCUrilleS mentioned In thiS or any Illillre Issue, and sllch positron may be dillerent from any Views. nowor hereafter e,pressed In !hIs or any other Issue Delafield Harvey Tabell Inc, which IS registered With the SEC as an Investment adVisor, may give adVice lOlls Investment adVISOry and other customers Independently of any statements made In Ihisor In any other Issue Further Informallon on an securlly menlloned herein IS available on request