Tabell’s Market Letter – January 21, 1948
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Technical Market Action The market sold off sharply in the final two hours of \ednescny' s trading and the industrial average penetrated both the December and September lows to reach an intra-day 10Vi of 173.32. The,close Vias 173.53, off 1.74 on the day. The rail average at the intra-day low of 49.61 and the closing level of 49.73, was' considerably above the Decellber low of 46.00. Volume picked up on the decline and in the final hour of trQding, when the averages suffered the major part of their loss, transactions totalled 550,000 shares against a total voluI1e of 1,190,000 shares for the day. l'ednesday's downside penetration of the trading range in 'Ihich the industrial average has held since Septer.Jber, indicates the probability of slightly lower levels. pso, none of tho various movine average indicators, as Y8t, indicate an oversold condition.' The top count indicP.tions point to a decline to the upper part of our long advised 170-160 buying range. In actual figures, See the possibility of 171-167 as a buying range. The ril average, on the other hand, shows a stronger pattern. Believe the rails should meot support above or around the 48 level As mentioned before, the decline is discouraging fro a tining vievoint us it delays the upside penetration out of the seventeen-month trading range between 187 &nd 161 on the industrials and 54 and 40 or! the rails. It is interesting to note, incidentally, that the industrials at Y/ednesdayl s clOSing Vlere almost exactly it! the r.d.ddle of this extended range of 26 points. The re.ils, of course, are nearer the top of their 14 point trnding range. Howelrer, the decline in no way alters the longer terr;l pnttern of an extended potential accucrulation area cf seventeen nonths duration. The potential advance now indicated if the area is penetrateu upside is 210-215. If the current decline again enters the 170-160 area, as it has on many occasions in the past seventeen months, ruld holds in the.t area, !Ill upside breakout would broaden the potential base by 25 to 30 points. Further weakness should present sane excellent buying opportunities. Would purchase recommended issues in the 171-167 'irea or upon receiving an oversale signal. EDMUND W. TABELL Januo.ry 21, 1948 SHIELDS & COi\lPANY Closings I Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock ).73.53 1.9.73 62.39 The opinlonl tlxprelled In Ihis letter are the perjonel lntlllrpretalion of charts by Mr. Edmund W. T.ebeH end are nol preHnted 0; tho opinion. of Sh50kb & Comp.e\'. —