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Technical Market Action ve since the market breek of over a year ago this letter has con- sistently stressed tllO points. The first point was that the 160-170 level of the Dow-Jones industrla1 averac was a long terr.l buyinC range and thct the base formed in that aree Vlould ultimstely be the founc.ation for a new bull market. The 160-170 areE. was reached at least a dozen times with 10Vi levels of 160.49 in October, 1946,Md 161.38 in MRY of this year. The second point was the.t the market leoaders of the nevI dvnnce would not be the sensationp movers of the 1942-1946 (ldvanee, such as the movine picture issues, dep!lrtment storcs,liquors and other luxury item issues, but that the neVI leaders would be found in the ,TOUpS that were comparative laggards in the 1942-1946 advance This letter favor'ed such groups as the steels, agricultural implements, mahine companies, oils, building stocks, chf'.lDicals, etc. We further stressed this selectivity by mentioning that eV(n in the same groups, some stocks had attrctive technical patterns while others in the same group had relatively un- favorable patterns./For example, we have mentioned, on occaSion, that Phelps Dode appeared more attractive than Anaconda, tht Illinois Central and Northern Pacific appeared more attractive th(!ll Pennsylvania or NeVI York Central and that Youngstovm Sheet & Tube appeared more attractivc than Beth1,her.! Steel. How this selectivity has worked out can be noted in comparing the two tables below. The first or left hand column is composed of issues in our recommended list with prices at the 10lVs of May 19th, the day the averaee reached 161.38, compared with Friday's close. The second or right hand column is composed of issues thd had relatively unfavorable patterns. Low !.lay 191,h Friday's Close Low Friday's May 12th Close Barnsdall Oil Bliss (E.W.) Borg Warner Chrysler Citi ES Service Electric Pro & Lt. F1.intkote General Cable Illinois Central Inter. Minerals Joy Manufacturing Mullina .,Mfg. National. Supply Rayonier Sharon Steel Texas Pacific Coal Union Bab' Union Pacific Wheeling Steel Youngstown Sheet &.T 21 1/8 18 1/2 37 5/8 45 7/8 25 3/8 11 1/4 24 8 18 1/8 22 1/4 28 1/8 143/4 12 5/8 17 3/8 24 3/4 25 1/2 25 1/2 122 31 54 311/S 33 53 ')/4 62 ')7 1/8 18 1/4 38 12 1/4 27 32. 39 3/4 231/4 19 1/4 28 7/8 37 38 3/8 361/4 139 1/2 48 1/8 75 5/8' Air Reduction 29 7/8 American Can 863/4 American Telephone 159 5/8 Bridgeport Brass 13 . Cerro de Pasco 30 Consolidated Edison 25 Continental Can 35 Cornins Glass 34 3/4 Decca Records 15 3/8 Eversharp 12 5/8 Gt.lVesterl'l Sugar 22 1/8 Inter. Nickel 29 1/2 L2JJlbert 28 1/4 Lo&vr' s 20 Nopco Chemical 42 1/2 Norwich Pharo 13 Oppenheim Collins 20 Paramount 22 3/4 Penns,rlvania R.R. 17 7/8 Twentieth-Cent. Fox 26 3/4 29 86 156 1/2 12 7/8 30 1/2 25 36 24 3/4 1313 1/2 23 1/4 29 27 1/4 19 7/8 36, 13 163/4 221/2 17 7/8. 25 3/4, Thus, it i6 evident that stocks in thG first column, bought at the MEW lows, show substantial profits at today's prices. On th othr, the stocks in the second column with the averages almost twenty points highar, show little or no profit or n loss. Believe that the market will continue to be selective. While a great many issues have completed tileir base patterns and indicate substantial uptrends, other issues are in the early stages of accumulation and require a long period of backing and fillin before a O/orthwhile move is indicr-ted. 'At this stage of the market, a great deal can be lost by riding th '1ronc horse or holding onto laggard issues in the vain hope that they wiil join the adVance momentarily. The market on Friday continued the advance started on the previous day and closed at a new high for the move from the September lows. The rails have been lagGard but would eJqject this group to join the advance shortly. October 10, 1947 EDIJUND W. TABELL SHIELDS & COMPANY The opinions 6xpreuec in ..his I.ffe, are the personal interpretation of cherts by Mr. Edmund W. Tabell end ere not preutnted as the opinionl of Shields & Comp .I'1'1.