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3 Promising Stocks from the Dow Jones Industrial Average for January 2024

Business3 Promising Stocks from the Dow Jones Industrial Average for January 2024

Introduction to Dow Jones Industrial Average (DJIA)

DJIA Overview

The Dow Jones Industrial Average (DJIA) is a renowned and age-old stock market index, serving as a key indicator of the overall health of the U.S. stock market and economy.

Price-Weighted Index

DJIA is a price-weighted index, where companies with higher stock prices have a greater impact on the index’s performance.

Investment Strategy

The cycle/relative strength concept is applied for January 2024, with a focus on both expected returns and relative strength.

Investment Process

Ranking and Screening

  • DJIA stocks are ranked by calculating expected returns for the month.
  • Top performers are screened for relative strength based on a unique measure over different time periods.

Longs and Shorts

  • Top 5 rated stocks are considered for long positions.
  • Bottom 5 rated stocks are shorted.

Expected Market Rally

  • Mid-month rally expected, favoring long positions.

Advantages and Disadvantages

Advantages of Dow Stocks

  • Represents well-established, financially sound companies.
  • Offers diversified exposure to the U.S. economy.

Disadvantages of DJIA

  • Limited scope with only 30 companies.
  • Price-weighting methodology may skew performance.

Dow Jones Stocks to Watch

1. Microsoft Corporation (MSFT)

Source: Trading View

Business Overview

  • Multinational technology company.
  • Known for software products and cloud computing services.

Recent News

  • Declared a quarterly dividend of $0.75 per share.
  • Annual dividend yield of 0.81%.

Stock Performance

  • Last month: -0.96%.
  • Current Trading: $370.62 per share.

2. Nike Inc. (NKE)

Source: Trading View

Business Overview

  • Multinational corporation in athletic footwear and apparel.

Recent News

  • Q2 2024 financial results beat estimates.
  • Earnings of $1.03 per share, revenue of $13.39 billion.

Stock Performance

  • Last month: -12.06%.
  • Current Trading: $101.98 per share.

3. Apple Inc. (AAPL)

Source: Trading View

Business Overview

  • Global technology leader in consumer electronics.

Recent News

  • Q4 2023 financial results exceeded expectations.
  • Earnings of $1.46 per share, revenue of $89.50 billion.

Stock Performance

  • Last month: -6.23%.
  • Current Trading: $183.46 per share.

Investment Considerations

  • DJIA stocks offer stability and recognizable brands.
  • Limited scope and price-weighting method should be considered for portfolio suitability.

January 2024 Outlook

  • Top 5 long stocks have historically outperformed short sales.
  • Investors should assess advantages and disadvantages before making investment decisions.

Sources

Source 1

Source 2

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