What is Dow Jones Transportation Average (DJTA)
DJTA tracks and measures the value of 20 stocks in the airline, railway, trucking and shipping industries. It is a lagging indicator and is often used to confirm the trend set by the Dow Jones Average (DJA). Similairly to the DJA, DJTA is also price-weighted, which means its movement is based on the prices of the individual stocks rather than their market capitalizations.
DJTA has been retracing downward since end of March, while the DJ Industrial Average (DJA) has been ranging at its high before breakup this week. This divergence has caused some concerns among analysts that if the DJTA continues to plunge, a stock market correction is inevitable.
However, DJTA is currently supported at the 8600 region on its weekly chart (green lines), and since then US indexes have been closing at new highs this week. If DJTA is…
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