Dow Jones Top 5 Best and Worst Performing Constituents YTD

The Dow Jones index rally accelerated on Tuesday as investors remained upbeat about the economy. The index rose by about 60 points while the S&P 500 and Nasdaq 100 rose to a new all-time high. The fear and greed index remains in the fear zone while the S&P 500 VIX index has risen to almost $18.

The top-performing DJI stocks this year

The Dow Jones rose as the overall fear in the market about the Delta variant of Covid waned. This happened after the Federal Drug Administration (FDA) delivered the first full approval of the Pfizer and BioNTech vaccine. Therefore, there are signs that the American economy will reopen faster as more states and companies issue their vaccine mandates. 

The index also rallied after the recent corporate earnings. Most companies in the Dow Jones reported results that were substantially better than estimates. Analysts expect that the trend will continue in the near term as the economy recovers.

Indeed, data showed that the number of new home sales increased from 701k in June to more than 708k in July. This was a stronger performance than what was expected. And on Monday, data showed that existing home sales numbers were better than estimates.

The best performing Dow Jones stock this year is Goldman Sachs, whose shares has jumped by more than 53%. This performance is mostly because of the strong economic growth and the bank’s strong results. It is followed by Microsoft, whose shares have risen by 36% as interest in cloud computing rose.

The third best performer in the Dow Jones is American Express, whose shares are up by 33% because of strong consumer spending and hopes of higher rates. It is followed by Cisco and JP Morgan.

On the other hand, the worst performers in the Dow Jones are Verizon, Merck, Amgen, and Walt Disney. These are the only companies in the red this year. The other worst performers are Coca-Cola and Procter & Gamble.

Dow Jones technical analysis

The four-hour chart shows that the Dow Jones index has been in a strong bullish trend recently. However, a closer look at this chart shows that a dangerous pattern is emerging. As shown in blue, the index has formed what looks like a rising wedge pattern. This is usually a bearish pattern. Worse, it seems like it is about to get to its convergence zone. 

Therefore, while the long-term view is bullish, I suspect that the index will likely have a major pullback in the coming days. If this happens, the index will likely retest the key support at $33,000.

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