Dow Jones Technical Analysis – Learning From Industry Leaders

Even new investors know that constantly tracking and monitoring the stocks in your inventory is one of the only ways that you can maintain control over your portfolio and stay up to date on market changes that could be big opportunities for profit. One of the most widely respected and reported stock market monitoring indexes is the Dow Jones Industrial Average, often simply referred to as ‘the Dow.’ For many investors in the U.S., analyzing the Dow is a way to keep their finger on the pulse of the health of the American market in general, as it is made up of only a handful of the strongest national trading companies. Being able to conduct Dow Jones technical analysis helps investors build a quality portfolio by giving them something to pattern it against.

Before you can really start practicing Dow Jones technical analysis, it’s important to spend some time getting to know the history of the Dow, and how it has been used over the year to predict and monitor the health of the stock market in the United States. The Dow Jones Industrial Average was founded by Charles Dow in the late 1880s, and at that point it only consisted of a couple of capitalized companies and twelve capitalized railroad companies. Even though the market has expanded greatly since then, the Dow still only tracks thirty different stocks. This is appropriate because it is meant only to monitor economic vitality by tracking companies considered to be essential to economic stability.

Although it’s possible to be a moderately successful investor without paying attention to Dow Jones technical analysis, it’s always a good idea for traders to have a sense of what’s going on in the larger market, and the Dow provides the perfect platform for that. If you have doubts about whether or not a indexing service that tracks only 30 public entities can be of use to casual investors, it’s important to remember that the Dow is compared with any of the more comprehensive U.S. indexes, like the Wilshire 5000, it will be obvious that the two have taken very similar paths.

By using Dow Jones technical analysis investors can determine the smartest ways to invest, both companies on the Dow index, as well as companies traded on other boards. Tracking stock price movements on the Dow is considered to be very important to technical analysis, as this information can then be aggregated and applied to holdings on other indexes. If you’re ever interested in general synopsis of the, the DJIA is where you want to look.