Simple Technical Analysis of the Volume on the Dow Jones Utilities Chart

The Dow Jones Utility Average index was introduced in 1929 and is the youngest of the three major Dow Jones Averages. According to analysts who study averages, the DJU index not only covers the Utilities sector of the US economy, but also reacts to interest rates as well. Thus, a price advance in the utility stock may indicate the anticipation by investors of falling interest rates.

Chart 1: DJU index charts - analysis of volume indicators.

The DJU intraday chart above demonstrates the relationship between the Index Price and the Volume Moving Average (VMA). On this chart we have several volume signals that indicate when to make a trading decision. However, for our purpose, we will only explain the two in the circles. The first signal shows us that, just before the index dropped substantially, there was very large increase in the VMA. Because the index was only on a small downward trend before this VMA surge, we assume that the index was still trending up. Because the index is in an upward trend when the VMA surge occurred, this is a signal that professional investors are selling and that the index will soon drop substantially. It is just after this peak in the VMA that we would make a trading decision.

In the second signal we see that, once again, the index is in an upward trend, and that the increase in the VMA can only mean that investors are once again selling and that the index will begin a new trend downward. Since the second signal is not as substantial, we know that the index will not decline as much or as quickly as in the first signal.

In the table below you see the possible profit that could be achieved by trading DJU volume signals on the chart above. One of our exclusive institutional investors used this signal for the index to maximize profits by trading the DJU index derivatives:

The table below lists DJU index derivatives that could be used to trade signals generated by the DJU analysis. The derivatives below were developed to track the performance of the DJU index and because of that, only the DJU index indicators may provide correct analysis and generate profitable trading.

Table 2: List of the Dow Jones Utilities index derivatives.

By trading DJU index securities instead of stocks from this index basket, you gain stability and predictability that stocks do not have. Our volume-based technical analysis may help you to see the mood in the DJU market sector. The DJU index is far more logical and far more consistent in its actions than the individual stocks of the DJU index basket.

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