The Dow's Detour: Is It A Temporary Glitch Or The Dawn Of A New Trend In The Performance Of The Dow Jones Industrial Average?

Author: Zaheer Anwari | July 28, 2023 02:51pm

• The Dow Jones Industrial Average (NYSE:DJIA) saw a drop of 237.40 points, or 0.67%, on Thursday, thus ending its 13-day winning streak. If it had sustained its gains for a 14th day, it would have tied its longest winning streak since 1897.
• Despite the drop, the DJIA has shown overall growth, having surged by 6.39% year-to-date, even though it's behind the S&P 500's 17.87% increase and the Nasdaq Composite's 40.05% gains.
• Despite the recent hiccup, the DJIA has seen a strong performance in July, with a rise of over 3%.

The Dow Jones Industrial Average, a key indicator of the U.S. stock market's performance, experienced a setback on Thursday.

The index dropped 237.40 points, or 0.67%, putting an end to its impressive winning streak of 13 consecutive days.

Had the gains continued for one more day, the index would have equaled its longest winning streak since 1897, the early days of the Dow.

The burning question on everyone's minds: Will this record run's end mark a long period of weakness, or is it just a temporary bump in an otherwise prosperous trend?

Despite a setback on Thursday, the DJIA has shown impressive resilience, surging by 6.39% year-to-date. However, when compared to the S&P 500's 17.87% increase and the Nasdaq Composite's incredible 40.05% gains, the DJIA appears to be lagging behind.

However, when we examine the larger perspective, it becomes evident that the DJIA has experienced a steady upward trend since March 2009. 

This index is widely recognized for its ability to follow trends, with occasional periods of consolidation where prices remain within defined levels of support and resistance.

The DJIA is currently experiencing a consolidation phase, with its price range confined between the low of October 2022 at $28,660 and the all-time high of January 2022 at $36,952.

July has been a strong month for the DJIA, despite a minor setback. The index has risen by over 3% and is expected to close on a positive note with only one trading day left for the month.

To reach its all-time high, the index needs to increase by another 4%. If it reaches this level, we could see new record highs being set.

Though Thursday's decline may unsettle some investors, it's important to maintain a long-term outlook. The DJIA has consistently shown a positive trend since 2009 and continues to do so. In fact, its present consolidation could potentially pave the way for future growth.

After the closing bell on Thursday, July 27, the stock closed at $35282.73, trading down by 0.67%.

Posted In: DJIA