Tabell’s Market Letter – January 26, 1948

Technical Market Action Perhaps the outstandint; feature of the 1947 stock narket was the extreme selectivi ty in individual iSBU es while the gener.l nc.rke t e.verage s Quctue.ted in a relatiyely ne.rrow range and closed the year practically where it started. This typE of nction is liable to continue nt lc,st during the early part of 1948. lihile the tehnical pnttern of the avere.ges indicates tho.t the general mo.rket is in 11 broad potentil accumulation area, the pp.tterns of individual issues are quite diverse. Many issues ho.ve reo.ched their dOlmsida objectives, as outlined by the eprly 194, tops, and have formed subskntial potential base arc9.s. In many instznccs these arer.s have been penetrated on the upside (ind the individual issues are in an uptrend and in an individual bull wlrket of their own. Others 'lre still in a tr.,.c1ing range but have built up potentir.lly strong patterns. On the other hand, a great nunber of issues he.ve not yet formed base areas, or if they have, tbe pot.ential bas6 or accumulation arEa is very snal1. lihile t,hese iseu6s may he.vE. re3.ched or alnost reached their respectivE lows, it would GeerJ the.t a 1010; penod of backing and filling is needeC before a worthwhile move is inc1icted. This diversity of technical patterns is noted in low-priced speculative issues as well as in the higher priced groups. For example, listeC belol/ ere a nunber of iSSUeS sellin!; bela; t.8n dollars a she.re who e t.echnical patterns are relatively unattract.ive ACF Brill, Adniral Corp., Alasko. Juneau,f,nerican & Foreign P01IIlt',f.merican -Ice, American Machine & Met.als, Amence.n Power & Light, flndes Copper, Braniff, Central Railroad of New J8rsey, Conrle Nast, Coty, Eversharp, Farnsworth, Gabriel, Grcllam Paige, Mojud HOSiery, National Linw, Norwdk Tfre, Pan-Arlerican Airways, P'.rmelee, Penn-C,en tral Airlines, Radio-Kei th-Orpheun, Rexall Drug, Roan Antelope, Savage Arms, Spear & Co., Tdcott, Telautograph, Third Avenue Railvmy, United Dyewood, Uni t.ed Cigar-l'!hellln, We oster Tobacco, Zoni teo Th6re are also a number of lovl-priced issues that have already built up substantial potentit'.l base areas and would indicat'i cood percentage appreciation on an upside penetre.tion of the trading range. Included in this group of lowpriced isues vlith potent.ially attractive t.echnical patt.erns are – Closing Pricer Alleghany Corporntion ArkansD.s Natural Gas A General Realty & utilities Pacific Tin Radio Corp St.Louis & San Francisco 3 5 1/8 43/4 5 8 5/8 9 3/4 The industrial average continued its slow decline on Monday and reached an intra-day low of 170.70. At this leve!., the average had reached the upper part of the 171-167 downside objective. Monday's dip wss the seventh successive day of lower closings. The industrial average was off 49 cents on the day but the rails continued their better than average act.ion and closed 6 cents hiher on the day. Volune waS small at. 650,000 shares. While Sowe further irre!',ularity is indicated, believe the market should be in a buying range- on any further weakness. Sue-,est 'purchase of recommended issues in t.he 171-167 range of tho industrial averaGes and the 50-48 arba for the rails. EDMUND VI. TABELL January 26, 1948 SHIELDS & COMPANY Closings Dow-Jones Industrials Dow-J ones RRils Dow-Jones 65-Stock 171.18 50.02 61.87 The opInions expressed In thk leHer are the personal interpretation 01 charts by Mr. Edmund W. labell .nd are not presented aI the opinions of Shields & Compilny.