Dow Theory: Why Stocks Could Go Higher in 2014

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The Dow Jones Industrials have soared in 2013, producing big gains for many investors and their stock portfolios. Yet as the end of 2013 approaches, investors want to know whether 2014 has more gains in store for the Dow and the broader stock market, or whether they should take their money and run. For answers, many have looked to what's known as Dow Theory.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks more closely at Dow Theory and its implications for the market in 2014. Dan notes that the technical indicator looks at both the Dow Industrials and the Dow Transports, both of which have hit new records recently. In particular, transports have benefited from the strong performance for airlines Southwest Airlines and Delta Air Lines , riding falling fuel prices and higher fee income to big share-price gains. Dan also looks at FedEx and its impact on the Transports. Dan concludes that if you believe Dow Theory, you have to wait for a clear reversal of the market's upward trend before concluding that the bull market is over.

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The article Dow Theory: Why Stocks Could Go Higher in 2014 originally appeared on

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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