- The Dow Jones finds room to move higher on a quiet Friday.
- November is shaping up to be the best month of the year for the Dow Jones.
- Another heavy week of NFP data looms on the horizon.
The Dow Jones Industrial Average (DJIA) explored territory north of the 45,000 zone for the second time this week. With little on the data agenda and post-Thanksgiving Friday trading hours reduced, investors rushed to push stocks into record territory before closing up shop for the weekend.
Tech stocks, specifically chipmakers, are helping to strengthen stock indexes after it was revealed that additional restrictions on the sale of semiconductor products to China being considered by the Biden administration may not be as severe as many investors originally feared. . With no other fundamental reasons to short, traders are bidding up stocks on the day as markets continue to shrug off renewed threats of widespread tariffs that President-elect Donald Trump will impose in January.
Next week will see a new round of employment and labor numbers that will attract attention from all corners of the market. This will culminate in another monthly Non-Farm Payrolls (NFP) report next Friday.
Dow Jones News
Stocks generally found higher ground on the holiday-shortened Friday, with two-thirds of the Dow Jones in the green from the day’s opening bids to the close. Nvidia (NVDA) rose more than 2%, closing north of $138 per share as the chipmaker recovers from a recent decline. Investors became discouraged with NVDA after it was revealed that the major tech player, which is expected to see its revenue soar another 100% year-on-year in 2025, could see extended gross flows shrink to a scant 50% year-on-year in 2026. NVDA has fallen more than 7% from its all-time high of $148.88 set earlier this month, but is still up more than 1,000% from 2022 lows near $12.
Dow Jones Price Forecast
The DJIA continues to find higher ground, baffling traders looking to accumulate short positions as the price action shows little regard for any precise definition of overbought conditions. The Dow Jones is up nearly 20% so far this year, and has closed in the green in all but two of the last 11 consecutive months.
Traders looking to enter an exhaustion play will be looking for an eventual drop to the 50-day EMA rising through 43,000, but a long-standing pattern of bounces from the key moving average means they should simply break away and follow the crowd into a new upward phase.
Dow Jones Daily Chart
The Dow Jones FAQs
The Dow Jones Industrial Average, one of the world’s oldest stock indices, is made up of the 30 most traded securities in the United States. The index is weighted by price rather than capitalization. It is calculated by adding the prices of the securities that comprise it and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, also founder of the Wall Street Journal. In recent years it has been criticized for not being sufficiently representative, since it only follows 30 companies, unlike broader indices such as the S& P 500.
There are many factors that drive the Dow Jones Industrial Average (DJIA). The main one is the aggregate performance of its component companies, revealed in quarterly corporate earnings reports. US and global macroeconomic data also contribute, influencing investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA, as it affects the cost of credit, on which many companies largely depend. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
The Dow Theory is a method for identifying the main trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where they are both moving in the same direction. Volume is a confirmation criterion. The theory uses elements of maximum and minimum analysis. The Dow theory proposes three phases of the trend: accumulation, when the smart money begins to buy or sell; public participation, when the general public joins the trend; and distribution, when the smart money abandons the trend.
There are several ways to trade the DJIA. One of them is to use ETFs that allow investors to trade the DJIA as a single security, instead of having to buy shares of the 30 companies that comprise it. A prominent example is the SPDR Dow Jones Industrial Average ETF (DIA). Futures contracts on the DJIA allow traders to speculate on the future value of the index, and options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to purchase a portion of a diversified portfolio of DJIA securities, providing exposure to the global index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
