Tabell’s Market Letter – June 27, 1947

Technical Market Action In checking over,our letters since September 1, we discover that since that time we have mentioned a great many individual issues for pur- chase. The approximate number is 132. Most of these were recommended in our four letters of September 9th to September 12th when we stated that we believed the low of the market would be reached somewhere between 170 and the top of the late 1937-1942 accumulation rangE! which was 160-157. We have continued to maintain that opinion for the past nine months. However, between September 9th and September 12th we listed buying ranges for over 100 individual issues, the majority of those buying ranges were reached in the September-October decline. Other individual issues were recommended over the past nine months. Most of the early recommendations were made on the basis of the indicated downside objectives from the large distribution area of early 1946. The majority of the downside objectives and buying ranges were quite accurate and stocks were purchased at or firly close to their lows. In the past nine months, it appears that the market as a whole and individual issues in part have built up large base patterns. It is now possible to ascertain Which issues have built up the largest base patterns and therefore indicate the greatest possibility of price appreciation. We have listed below the stocks which appear most 'attractive in the list of 132 formerly recommended. The list comprises a little over 60 stocks and we suggest selling the issues not listed and switching into those listed below. Suggest selling now, but awaiting weakness for purchase. The list follows Adams Express, American Cyanamid, American Power & Light, American Metal Co., American Wster Works, Atlas Corp., Barnsdall Oil, E. W. Bliss & Co., Borg Warner, Campbell Wyant & Cannon, Chicago, Northwest, Chrysler, Cities Service, Colorado Fuel, Crane Co., Crown Cork &Seal, Deere & Co., Doehler- Jarvis Die Casting Corporation, EaglPicher Co., Eastern Airlines, Electric Auto Lite Co, Electric Power & Light, Evans Products, Flintkote Co., General Cable Corp., General Motors, General Railway Signal, Gulf Oil, Houdaille Hershey, Houston Oil, Howe Sound, Illinois Central, Interlake Irori, International Mineral, Jones & Laughlin, Libbey-Owens-Ford, Murray Corp., National Supply, Ohio Oil, Oliver Corp., Pepsi-Cola, Pure'Oil, Rayonier, Revere Copper, Seaboard Airline, Seaboard Oil, Shamrock Oil, Sharon Steel, Simmons, Standard Oil of N. J., Standard Gas 4 Pfd., Texas Pacific Coal & Oil, Union Bag & Paper, U. S. & Foreign Securit- ies, U. S. Pipe, U. S. Steel, Westinghouse Air Brake, Westinhouse Electric, Wheeling Steel, Youngstown Sheet & Tube. We consider this as our recommended list and advocate purchase of these issues during periods of technical correction. Each individual issue will be reviewed in subsequent bulletins. We have suggested over the past week, a corrective reaction to the 175-174 area. This objective was reached on Wednesday when the average hit an intra-day low of 173.93. The market then rallied to reach a high of 177.20 on Friday. However, would not be inclined to follow strength at this phase of the market. The market appears to be headed toward substantially higher levels over the next few months, but for the time being several of our technical indicators point to a temporarily overbought position. This situation could be corrected in one of two ways. One possibility is a further technical correction to re/trace about one-third to one-half of the approximately 16 point rally from the May lows. This would bring the average down to the 172 1/2 – 170 area. The second possibility is a longer consolidation period in the 174-178 area. Which of these possibilities may eventually occur is not certain, but would temporarily withhold trading purchases until the pattern becomes clearer. There is no change in the longer term pattern which indicates higher levels in selected issues over the intermediate term. EDMUND W. TABELL June 27, 1947 Q1QING Dow-Jones Industrials Dow-J ones Rails Dow-Jones 65-Stock SHIEIDS & COMPANY 176.56 46.02 61.70 Th. opinion. e.p,..Slod in this J.tte, at. the p.non jnt.,pret.tion of cMtts by Mr. Edmund W. Tabel! and are not presented es the opinions of ShI.ld. I Com,.ny. \ , \I