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Technical Market Action The rail average brok.. out of its three-week traning range on the up side on Monday, thus lellding additional confimatolJ evidence to the possibility that the averages reached their intcrmudiat9 ter lows at 164.07 Lnd 47.48 on February lOh. londay' s rally in the rail average reached a high of 50.08 com- pared with the Februar-J 17th high of 49.3'1. The industrial avera,,;c, at a high of 168.62 was still belo\i trw F'ebrue ry 17th high of 169.23 Frol.1 a shorkr terw point of view, the industrial average could rally back tc the 173-175 are. before 'eeting much re,sistancF). In a period such as this, it is cifficul t to gauge the imnediate term rally possibilities. The trer,lendous possible base area built up in the 161-165 rrnge h, s 11. terrific upside; potE'ntial which in the cnse of SO8 dynolaic news happening, , auld nable the laark8t to push through the 175-185 upside resistance 1'..1'00. vlithout the prior fomation of nn inter- mediate ter!.l base. Just what nel,s 17Quld change the pl'eS0nt bearish psychology is problematical mIt poseibillties include favorable action on the tax bill, settle- ment of third round wage increases, lowering of T,-.argin requirelm ts, passing of E.R.P. bi.ll and a rather unlikely conciliatory nove fro, Rusia. In any event, fron a nearer ter;1 viewpoint, it seeFlS wiser to await signs of an overbought condition rather than attmpt to predict a rally objective. At the mOIl6nt, lliere are no signs of an overbought teclmical pa.ttern. In fact, the reverse is true e.nd the market a.ppears to b8 clerging fro,a an !sold teclmical pattern. Several groups are showing better than averag6 market action and should be alilong the lc.aders in any further extension of the risc,o The groups are enume-' rat'd belovi together with recomf.1wded issues in eQch group. The raiJ s ar0 showing outsta.nding action and would e-l'ect at least a testing of tho highs. \;'e have recom.,ended quite Q few issues in this group. They include Alleghany Corp. ( 2 7/8), Allegheny pfd. (39 7/8), Atchison,Topeke & Santa Fe (89 5/8, Chicago NorthVicstorn (16), DenTer & Rio Grande (18 3/8, Gulf Mobile & Ohio (16), Il11nois Central (29 1/4), Kansas City Southel (25 5/8), Northorn PacifiC (19 1/8) ,St.. Louis-Sar. Francisco (9 3/8), Seaboard I.ir Line (15), Southern Pacific (477/8) and Union Pcific (161). In this group, Gulf Mobile &Ohio nade a new high-on Monday. Th8 aircrfts are alse showi.ng good near tern action as are the airlines. These trIO groups are represented in our rcconaended list by Consolidated vuitce (13 7/8), Eastrn Airlines (177/8) ane United Aircraft (26). Sperry Corp. (23 3/8) also h!'.s 8.'l attractive pattern. The gold stocks alsrrhave been showing excellent technical action. We have no representative in this group,but Dome ;\Unes (18 5/8) appears suitable for purchase. ;'.nother group Vii th better than average action is the natural gas compani(..s. This group is represented in our list by Electric Pov,er & Light (141/4) vlhich should be clDssified in the nat.ural g'1.S group becaus3 cf its ownership of United Gas Corporation and Shar.lrock Oil & Gas (27).' The oil w811 supply group is represented in our list by National Supply (21 7/8) and Foster lilleeler (25 5/8). l'he groups und issues mentioned above should be allOng the leaders in any nteri(ll extension of the present. rise, over the nearer term. The long term pattern remains unchanged. Believe the sev8ntcen-r.lonth trading ranee betneen 161 I.nd 187 is an accumulation area \'lith substantially higher prices indicated for the longer terra. . EDMUND Vi. TABELL March 1, 1948 SHIELDS & COMP/.NY elosiM,L Do-Jones Industrials DOVl-Jcne,s Rails DO\,I-Jones 65-Stock 168.14 49.81 60.96 The opinlons expressed In this tlot are Ihe personal interpretation Clf charts by Mr. Edmund W. TabeH and are not presented as the opinions of Shields I. Company.