Tabell’s Market Letter – March 22, 1948

Technical Market Action Irn optnon,oy the odds nOr! favor the probability that the oft-mentioned 170-160 buying range in the Dow-Jones industrial average will not be entered again prior to a penetration of the 187.66 high of the industrials and the 54.17 hih of the rails. Saturday's action was very favorable fran a technical viewpoint. Saturday's lows were 170.76 and 50.82and Frido.Y's.highs WGr8 169.75 and 50.46. Thus there is an upside gap of 1.01 on the industrials and 36 cents on the rails. It is interesting to note that on February lOth, on volune of 1,460,000 shares the averages broke C4.17 and 2.00 and left a downside gap of 41 cents between 169.33 and 168.92 on the indus trials and a downside gap of 35 cents between 49.97 and 49.62 on tho rails. Thus, Saturdc.y's action lee-ves the entire trading range of the past six weeks in sort of a little island detached froo the rest of the pattern. This type of double gap is kno…m as an island reversal and quite often indicates an inportant change in trend. It also is interesting to note that Saturday's upside breakaway gap occurred on voluoe of 1,260,000 she.res 01 at the rate of over 3,000,000 shares for a full day Monday's oarket absorbed quite a bit of profit-taking but rlanaged to close 54 cents hieher on the industrials at 173.66 and only 2 cents lower on the rails at 51.76. Voluoe las 2,040,000 shares. The oarket appears headed for higher levels. Obviously, the advance will not be in a straight line. Ther are resistance areas at 175-176 and at 179-181 and again at 185-187. However, the action of the rlarket indicates that if purchases have not already been made in the 160-170 buying range they should be made on slight price dips. Advise previously recorlmended issues, particularly the thirt'-one stocks specinlly reconended in our letter of February 11th. March 22, 1948 EDMUND II. TABELL SHIELDS & COMPANY Closings Dow-Jones Industrials Dow-Jones Rails DOVi-Jones 65-Stock 173.66 51.76 63.04 The opinions expreued In Ihb letter are the personal Jntl!lrpretatiM of ,-'rt. by . Edmund W. label! and are not presented as the opinions of Shlekb & Company.