Tabell’s Market Letter – March 11, 1948
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——– – – – – – – – – – – – – – – – – – – – – – – – – – c – – – – – – – – – – – – – – – – – – Technical Market Action While the broad ttern of the market suggests that the trading range of the past eighteen r.wnths is a slow patience-tryin!; accumulating phase, not all incividual issues have the sa'1C technical foroations. I have constantly drawn attention to the diverse patterns not only betIJe8n groups but also in stocks in the saJile group. Recently, I mentioned the relatively L10re favorable technical pattern of Westinghose Electric as coopared IIi th General Electric. I \-;ould also like to draw your attention to the difference in the technical patterns of Consolidated Edison and Colw,bia Gas & Electric. While both conpanies are in the general public utHHy classification, they are in quite different divLSione of the publiC utility field. Consolidated Edison is both an operating and holding cOJpany which, together Vii th subsidiaries, supplies gas, electricity and stean i New York City and hestchester County. Colul;Jbia Gas is a holding cor.lpany, heading a system COI..sisiing of nineteen operating cOlJpanies in Kentucky, Maryland, Nell York, Ohio, PemlsylvEJ1ia, Virginia and West Virginia. These opere.ting companies are engaged primarily in producing, purchasing, transporting and selling gas. Consolidated Edison has a very negative technical pattern. The downside indications of the broad distri.butional top betveen 36 and 32 indicated tl decline to 24 followed qy 17. The stock declined to 24 3/4 in October 1946 and eld tha level until a year lat8r ill October 1947 when it started e decline doWn' to' a 'low' , of 21. The stocle is still holding aroW1d that level. At the r,oDent, before any worthwhile upside l10ve is indicted, it ould seem that a base pattern vlOuld need to be built up in trading range around these or slightly lower levels. There is a heavy supply of stock in the 25-27 area that vlill act as strong resistance to anyupside move; Columbia Gas, on the other hand, has a potentially strong technical pattern. It made its low of 8 1/2 in the first break in October 1946. v.nen the averages broke to the sar,le lor. level 111 Mar, 1947, Columbia Gas held at 10. At the recent February lows, Colunbia Gs held at 10 1/4. The issue seems to be meeting increasing'support on every general narket dip. The base built up at the 9-10 area indicates a long term potential of 20. Consolidated Edison earned .1.90 a shc.re in 1947 and paid 1.60 in divi- dends to yield apPloxima tely 7.6 at th closing level of 21 1/8. Colurlbi Gas earned l.36 in 1947 and paid 60 cents in regular dividends plus 15 cents extra to yield6.8 at the clOSing price of 10 7/8. \10L) On the basis of the technical patterns of both issues, Colurlbia Gas appears ('LI'\)to offer better appreciation possi.bilities than Consolidated Edison. The market continues to hold in the narrow trnding range of the past month. However, volume indications in the past two days have been slir;htly more favorable. No worthwhile move indicated W1til 169.28 and 50.37 are both decisively penetrated on the upside or until 164.07 and 47.48 are both penetrated on the downside. Regardless of ninor neartcrm fluctuations, believe the rrarket is in the final stages of a long accumulation arca. March 11, 1941! EDMUND I.. TABELL SHIELDS & C01PANY Th. opiflion. expressed in thiS letter ar. the personal interpretahon of chari. by Mr. Edmund W. Tabell and are not prelented a, the opinion' of Shield, & Company. ,, \ 'I