Tabell’s Market Letter – June 16, 1947

Technical Market Action The automobile aecessoy issues have, in most instances, potentially favorable technical patterns. One of the issues in the group, Houdaille Hershey, was recommended in last week's letter and has rallied mederate- ly to close at 15 3/4 on Monday. Borg-Warner Corp. also presents an excellent chart pattern. In addition to he manufacure of auomotive parts, which accounts for approximately 60 of business, the company also, manufactures household appliances, specialty steels, and parts for agricultural machinery, power transmission and aviation, The stock reached a high of 61 3/4 in 1946 and reacted to 36 in the October decline. The May low was 37 5/8 and Mondays close was 44. A large potential base pattern has been built up over the past nine months. A rally above the February high of 49 1/2 would have considerable technical significance and indicate considerably higher price levels. Consider Borg-Warner in the better grade claseification and Houdaille Hershey in the more speculative category, as representative issues in 'he attractive auto accessory group. Purchase is recommended in periods of price irregulariy. Also, like the technical action of E. W. Bliss. The stock of this heqvy machinery company has been mentioned several times in this letter. It has been strong recently and, at Mondays closing of 24, the stock is quite near the 1947 bigh of 26 3/8. A large potential base pattern has been built up between roughly 19 and 26 and an upside penetration would indicate much higher levels over the longer term. First quarter earnings were 2.01 a share. The technical pettern is excellent and purchase of E. W. Bliss is recommended on minor declines. The industrial average reached a new high on the move on Monday at 177.23, but eased off toward the close to end the day at 175.81. Consider the 177-180 area as temporary minor resistance. After some further strength would be inclined to look for a slight dip into the 175-173 1/2 range. After further backing and filling would then look for substantially higher levels. June 16, 1947 EDMUND W. TABELL SHIELDS & COMPANY CLOSING Dow-Jones Industrials Dow-Jones Rails DowJones 65-Stock 175.81 45.20 61.86 The opinions ezpred in this letter .,. the personal interpretation of ch.rts by Mr. Edmurtd W. Tebetl .nef ere not presented al the optnioM of Shl.td, Comp.ny.