Tabell’s Market Letter – May 13, 1948
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Technical Market Action In the past, this letter has repeatedly dra1ll attention to the favorable technical patterns of issues in the oil and rail groups. Both of ese groups have sho1ll excellent price advances regardless of tile fact that the in- dustrial averuge is still in the comparatively narrow trading range of the last twenw months. In looking over the formations of individuul issues in an e.ttempt to find other groups with equally favorable patterns, the building m.terials group is indice.ted us a likely candidate. This group appears to be. in the same technical phase now as the oils e.nd rails Vlere in several monthsago.TheStandard & Poors' Building Materials Stock Average has held in a range of approximately 137 high and 106 lov; for the past twenty months. The average as of May 12th IYRS bout 128. Individual issues in the group have approximately the same pattern. It would appeal that the group is in a long accumulation period e.nd that an upside penetre.tion would indicate substantially higher levels. Listed below are a number of issues in the group with potentially fuvorable patterns. The ability to reuch the price in the next to the last column would confirm the potentln11y bullish pattern. The price in the last column is the long term objective. These patterns appear to coincide, for example, with the pattern in Barnsde11 Oil which VIas recommended in the low 205. The stock built up a base pattern in the 21-25 area for ten months. The indicated long term objective was 41.-45 on an upside panetrat'on to 26. The penetration occurred in June, 1947 and the stock recently made a high of 44 5/8. Approx. 1947 1947 Price Dv. 19461948 Ran.!e Bullish Upside Confirm Potential Alpha Po'rtland Cement 28 3.05 2.00 39 7/8-25 ,)6 56 Americrun Radiator American Seating 15 1.90 1.00 23 – 12t 23 2.52 1.00 33 1/2 -l 18 24 24-28 41. f… M. Byers 23 4.92 .50 35 1/8 – 15 24 48 Carrier Corp 17 3.47 34 – 13 5/8 22 34 Celotex Corp 29 6.59 1.12 38 1/8 – 22t 33 75 Certain-Teed 17 1/2 3.75 .60 25 7/8 – 13 1/8 22 42. Crane & Co 37, 5.17 2.60 49 5/8 – 29 37 53 Devoe & Raynolds 25 5.62 1.60 39 1/2 – 22 1/2 32 60 Eagle Picher 23 1/2 4.05 1.50 30 1/8 – 19 26 46 Flintkote 37 1/2 6.27 1.50 46 7/8 – 25 1/2 40 72 Holland Furnace Johns Manville .28 4.10 2.00 40 1/2 – 21 1/8 33 39 3.23 1.40 55 '1/8 – 341/4 47 . 66 65 Lehigh Portland Cement 34 3.78 1.50 55 3/4 – 30 3/8 40 50 Lone Star Cement 65 6.68 4.25 94 – 57 1/2 72 95 Masonite 64 7.30 2.00 75 – 47 1/2 Minneapolis Honeywell 48 4.00 68 1/4 – 45 64 67 110 106 \ otis Elevator 31 4.06 1.35 39 1/2 – 26 34 63 u. S. Plywood 32 3.8Qlf .80, 39 1/2 – 20 1/2 .54 '– 35 / Both averages reachf;d new high territory for the move on Thursday at intra-day highs of 185.40 for the industrials and 60.16 for the rails. The closings were 184.82 and 59.91. The penetration of the April 23rd high of 184.48 on the indstrials appears to be importnnt and suggests an imminent testing of the July 1947 intra-day high of 187.66. The equivalent high based on the closing price was 186.85. Ability to penetrate the July 1947 high would confirm the fact tilat we heve been in a bull market sin ce M. 1947. 9 mos.to January EDMUND W. TABELL May 13, 1948 &The optnions exprestfM In this fetter are the penoMfSHfftIieErpLrDetlSffon COMPANY of cherts by Mr. Edmund W. TobeY ond oro not e d …… opinIoN 01 SlHeId '-nY.