Dow Theory Indicates More Gains for Stocks: Technical Analysis
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Yesterday’s close by the Dow Jones Industrial Average at a new high for the year suggests U.S. stocks will extend their advance, said Chuck Carlson, chief executive officer of Horizon Investment Services LLC.
The 30-stock average surpassed its previous 2010 high a day after the Dow Jones Transportation Average achieved the same milestone. Under Dow Theory, which stems from observations made by Wall Street Journal founder Charles Dow during the late 1800s, advances by both the transportation and the industrial average beyond their most recent peaks “confirm” that stocks can continue to rally.