Tabell’s Market Letter – January 08, 1945
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TECHNICAL MARKET ACTION January 8, 1945 The market, after a two day reaction, rallied strongly today led by the rails, oils, sugars, steels and distilling issues. The decisively penetrated last week's high of 50.21 to reach a high of 50.95 today, while the industrials just about equalled last week's high of 155.02 by reaching 155.04 today. As the writer told you in his letter of last Thursday, the market may spend a week or two in this area with individual issues having wide price gyrations. The really important point on the industrial average is the 158.98 high which marked the 1938-1939 top of the industrials. If that high is passed, the industrial average will be in the same position as the rail average when; it passed its comparable 1938-1939 high of 36.70 in July of 1943. At that point, the rails indicated a long term uptrend and an eventual indication to 65-70. If industrials penetrate the 1938-1939 high of 158.98, they also would signal a long term uptrend and an eventual price objective in the 230-240 range. However, until the penetration occurs, a certain amount of caution is necessary. The momentum of the advance has been rapid and the price objectives outlined by the accumulation bases have just about been reached. It would seem a prudent policy to lighten trading accounts on strength with the objective of repurchasing on price dips or on as of the 158.98 high. Last week, the advised taking trading profits on 28 of the 52 recommended issues -and the retention of the remaining 24 issues, thus assuming a 50 liquid trading position. At Thursday's close, the 28 issues sold, all showed a profit to total 182 7/8 points, or an average of 6 1/2 points on each issue. The list of the 24 remaining issues held is printed below. Retention is advised. Price Recommended Monday's Close Alleghany Ludlum Allied Stores American Chain & Cable Anaconda Copper Bethlehem Steel Bucyrus Erie Budd Manufacturing California Campbell, Wyant Carpenter Steel Colorado Fuel &Iron Columbia Pictures Engle Picher Lead Engineers Public S Interstate Dept. Stores Jones & Laughlin Kennecott Copper Poor & Co. B Pressed Steel Car Radio-Keith-Orpheum Republic Steel U. S. Steel Western Union A Youngstown Sheet & Tube 27 20 7/8 25 28 1/4 6/. 3/4 13 1/2 10 1/2 27 3/4 19 3/ 33 24 5/8 18 1/2 .14 15 7/8 17 1/2 26 3/4 36 3/8 12 3/4 17 1/2 9 19 5/8 6C 44 3/4 37 3/4 29 1/1. 21 7/8 27 3/8 30 7/8 70 13 3/8 10 1/2 28 3/8 21 1/4 33 1/4 24 3/4 2l 1/8 14 1/4 16 1/2 18 3/4 29 5/8 38 1/4 13 17 3/4 9 1/4 21 62 1/2, 45 1/2 42 EDMUND W. TABELL SHIELDS & COMPANY The opinions expressed in this letter are in the personal interpretation of charts by Mr. Edmund W. Tabell and are not presented as the opinions of Shields & Company.