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TECHNICAL MARKET ACTION Fridays market showed divergent action with the industrial average up during most of the day while the rails were down 1.48 points. At the days lows, the rail average was down over ten points from its bull market peak of 63.62. This to approximately a 40 correction of the 25 point rise since September 1944. The industrials have so far failed to confirm the rail average by reaching new lows on the move and are now selling approximately five points above the July 27th low of 159.95, The July lows on the rail average. At Fridays close, the industrials were midway between the bull market high of 169.55 and the July low of 159.95. The July low was the top of the writer s 160-155 buying range. Whether 01' not the industrials have completed their Secondary decline is not yet clear. Continue to advise a policy of gradually re-accumulating trading positions on The action of individual should continue to be of more significance than thp.t of the averages during this uncertain period. Six issues reached buying points on and were added to the recommended list. All of these issues are in the rail and aviation group. Advise purchase of all these issues around recommended levels. Also Atchison, Topeka & Santa Fe (closed at 81 3/4)' Northern Pacific (closed at 24 3/4) and Southern Pacific (closed at 43 1/2). The rails have sold off sharply from their years highs and are at or close to support levels. Believing they arc an attractive purchase for both the short and long term. Sane is true of selected aircraft manufacturers. August 17, 1945 EDMUND W. TABELL SHIELDS & COMPANY Cl.2,.inl' Dow-Jones Industrials 164.38 Dow-Jones Rails 53.05 The opinions expressed in this letter are in the interpretation of charts Mr. Edmund W. Tabell and are not presented as the opinions of Shields & Company.