Tabell’s Market Letter – April 28, 1948

– Technical Market Action The market on Moneay had its first technical correction since the start rise in late March. After rer.chine a hibh for the IT.OVe of 184.48 on Friday, the market reacted to a 10Vi of 180.93 on MonGr.y on a volume of less then 1,500,000 shares. The weakness carried over into Tuesdny rJornin, an the average reached a low of lSO.07, a correction of 4.41 frol'1 the hiGh of the move. The rnil average reacted from a hie-h of 5S. 71 last week to a low of 57 .1S, a decline of 1. 5;. The market rallied in the later part of Tuesday's session and continued firm on Wednesdey. The rails, at Wednesday's high of 58.50, regained most of their loss. Believe the reaction is of only minor sirnificance and is typical of market corrections – thut is, a sharp, sudden dip followed by an equally sudde; comebaCk. In most cases, tryinG to take advantau, of these sudden dips results in' losing a position in an uptrend as all stocks do not decline. For example, on Monday's decline, 671 closed 10ler but 212 closed higher and 180 were unchanged. Also on Monday, 64 issues made new hifhs for the year. There is no chFn,;e in my opinion that there will be only quick, sudden technical reversals of minor i,por tonce like that of Monday-Tuesday until the industrial avera.,es reach 195-200. From that point, would expect a full-fledeed intermediate correction of the advance from 165. This should result in a retracemcnt of one-thirC to one-half of the advance but would eXpect such a decline to weet support in the lS7-185 area. As for individual issues, it vlOuld see!! that some new leaders may come into the picture. The oils, for exalJple, have hac1 sE'Dsational upward moves and appear in need of some consolic'a tion. Some of the lagg.rds may come into the picture at this point. I have been aavisinC avoidance of the store and textile issues since May 1946 and also throughout the trdinG ranGe of the last nineteen months. However, a few of these issues have noVi built up rather favorable patterns. I like Gimbel (22) in the store r.roup and !lnited Merchants (17 7/8) in the textile group. The rails still look attractive despite their already sharp advance. Some of the secondr.ry issues in the erouppay be in the forecround from here on. Baltimore & Ohio, Chicr.go NorthwE'stern, Seaboard Air Line and St.LouiS, attractive. EDMUND VI. TABELL SHIELDS & C1.JMPANY 28, 1948 Closings Dow-Jones Industrials Dow-J one s Rail s Dow-Jones 65-Stock 181.01 58.21 67.01 The opinions 8xprelled in this letter are the personal interpretation of cherts by Mr. Edmund W. Tebell and ere not presented as the opinions of Shields & Company. – – – – – .. , ,-