Tabell’s Market Letter – August 05, 1946

Technical Market Action As was to be expected after eight successive days of riSing prices, the market turned reactionary on Monday and the industrial average closed 89 cents lower. The rails, by comparison, put in a better performaBce and were only 10 cents lower on the day. Volume was small at 790,000 shares. ConSider Monday's action normal. Would expect some further irresuiarity anQ a possible testing of the recent aows,. Ability to hold above this point woUld indicate the probability of a turn in the intetmediate trend. In looking over the technical patterns of individual issues and groups, it becomes quite evident that extreme selectivity will be the outstanding factor in the market from here on. While a great many issues seemingly have reached the objectives outlined by their primary base formations, there are a great many others that indiCate substantially higher levels. An outstanding example of the latter type is to be found in the railroad equipment group. Most issues in this classification are selling near the lows of the-year and well below not only the highs of 1945-46, but also of 1936-37. With a favotable future sales outlook, this group appears extremely attractive. Listed below are several issues in this group that have bullish long term technical patterns. Purchase is advised on reactions – American Brake Shoe American Car & Foundry American Locomotive American Steel Foundries General Railway Signal Lima Locomotive Poor &Co. B Pressed Steel Car Westinghouse Air Brake High 1936-37 80 3/4 71 58 7/8 731/4 65 1/8 83 1/2 33 1/8 31 7/8 57 3/4 High 1945-46 64 1/2 72 3/8 44 1/2 50 1/2 49 88 27 1/4 30 41 5/8 Low 50 57 1/4 33 39 3/4 36 63 18 3/8 19 5/8 32 1/2 Last 56 70 1/4 34 1/2 41 3/4 40 66 20 1/4 22 1/2 35 7/8 August 5, 1946 Closing Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock EDMUNQ W. TABELL SHIELDS & COMPANY 201.93 62.53 74.85 The opinions tlzpreled in this letter are the personal interpretatioD of eham by Mr. Edmund W. label! and are not presented IllS the opinions of & Company.