Tabell’s Market Letter – January 15, 1948

Technical Market Action The industrials helc. above the lows of both Septmber and Decenbcr' on Wednesday and Thursday au erc is the possibility that a triple bottom pattern may be in the process of fornation. The September lowwaa174.02 and the December 101'1 vias …. 175.19. The lQWS of 17ednel'day und ThurSdy rlero 176.50 &Dd 176.54. The rails, of course, are considerably above the conparable Septeober and Decer.lber lows of 46.91 and 46.00. Thursday's low on the rails was 50.99. Thus, both aver.ges have, so far, held in the dovlllsic1e resistance areas tlentioned in this letter ten days ago, nar.Jely, 179-175 and 52-51. Volul'le indications l'ief'f also fvorable with transactions on the retesting falling off to 820,000 shares on l,ednesday and 780,000 on Thursday. Abili ty to hold age.in in the trading rc.nge of the last Six months Vlould be very constructive. A downside penetration, while in no .Iay dtering the major term io- plicctions of a lone period of reacctLJulation, would indicnte a dip to the upper pnrt of our old 170-160 buyill, area which has been entered on nunerous occ'.sions in the past sevente8n months. ' The current weekness hils uroueht a number of r'ecoml'lended issues dorm to what \'fould appeer to be advantageous tUYl.ng levels for those who cid not purchase at the Imler price levels at our tiJ.16 of original recommendation. Hso, a nunber of others, which we ware watchin closely for a buyinr; spot, are do'Wn to what 1'lOuld appear interesting price levels. Bliss (E.W.) Closd at 26 7/8. It was originally recomf-'ended in the 18-20 rangE but i t is lawn sharply from the 1947 hiGh of 35 1/8. It is in the favored heavy machinery group and indicates considerably higher levels for the longer term. Cities Service closed at 35 5/8. This stock ws ori&inally recommended in the nid 206. It is daVin approxir-.at8ly six points fror.l its 1947 high of 1947 and ,appeurs ready to resune its uptrend. Deep Rock Oil closed at 37. This issue has he.d a 1947-1948 trrcding range of 45 7/8 and 28 1/2. Earninfs for 1947 arc estir.,c.tc at 8.00 a share. It is in the lovler range of a broad 37-45 tnCinE shelf and appears to be behind the oil t;roup. This is a new recomnendation. Denver Rio Gre.nde & iestern closed at IS. It is a newly recOlllnendeu issue in our rail group. This reorgcnized rail is ,close to the'top of its 947 range of 19 3/8-6 3/4, but the pattern sussests higher levels. 1947 ernings are estioated at close to 6 and, on the basis of the recent freiGht rate increase, earnings of 12 – 14 are possible in 1948. Distillers Corp-Seagran closed at 15 1/4. The stock has built up an interest- ing pattern in the 18 1/4 – 11 1/4 ranee. Earnings have h01d up well and totalled 4.88 for the latest fiscal year. Earnings for the three months ending October 30th were 2.18 a shcre. The issue appears undervaluel fro;;J a technical viewpOint. Thi s is a newcooer to our recoI.mennsd list. Hewitt-Robins closed at 25 1/2. The 1947 range is 29 1/2-20. This rubber products compeny has built up sizeable potentie base area in the 29-20 ran&e. The stock appears attractive. This is also a newly recomended issue. Mullins Manufacturing closed at 22. It is down over five points from the recent high of 27 1/2 and is at the strong 22-21 support lve1. Purch9.se is advised. Estimated earnins for 1947 are 7-,8 a share. Rheem Manufacturiclosed at 23 5/8. The stock has built up a strong potential base area in the 25-19 rmge and an upside breakout V/oulc inc.icate sutstan- tially higher levels. It appears to be an attractive purchaSe. This is also a newly recommended issue. , Sharon Steel closed at 33 1/2. The 1947 range was 40 5/8 – 24 3/4. The stock is close to our originally recommended level and at a strong support point. Purchase is recommended. Viskinf Corporction closed nt 32 3/4. It is near the 1947 low of 31. The hi;;h was 38. It appears to be builtling up e. substantial bse pattern. Purchase is recol'lmended. This is the first recommendation of this issue. beelin' Steel closed at 41 3/4. It is down over 11 points froo the 1947 high of 53 1/8 due to selling advice from en advisory service. From a technical vie\point believ the stock should be boueht in this rea. YounGstovm Sheet & Tube at the closin price of 73 3/4 is also close to u strong support level. EDMUND t. TABELL January 15, 1948 SHIELDS & COMPANY The inlons expressed in this letter are the personal Interpretation of charts by a.Mr. Edmund W. TbeK and are not presented as the opinions of Shields CompaOy. –!-