There is a lot to be said for taking the time to analyze all of the stocks in an index. I find that process to be much more rewarding than obsessing over every 50 basis point move in the index itself. I’ve written in the past about how I think the Dow Jones Industrial Average is underrated. You can go through all 500 stocks in the S&P500 or just 30 of them in the DJIA and you’ll get a quick snapshot of the health of the market. If there are more good ones than bad ones, it’s probably not a downtrend in the index. If there are more bad stocks than good ones, it’s likely the index will follow them lower as well.
Today I want to go through this process, but with the Dow Jones Transportation Average. You can go through them all yourself here. I did a deep dive analysis on Transportation Stocks in general when they were near their lows in August. The Dow Jones Transportation Average is up over 1000 points, or about 10% since then. So a lot of the stocks we liked have done really well. But I would say that during this process, a lot more stocks in the Index have improved or have broken out of massive bases. That’s all I see when I go through the entire Workbook of the Dow Jones Transportation Average: massive bases everywhere.
Here are a few of the ones that stand out: