- The Dow Jones Industrial Average ETF (DIA) is going to trigger a rare monthly buy signal at the close on January 31.
- Prior to the close on 1/31/24, this signal has only triggered 4 other times since (DIA) started trading, in 1998.
- The buy signal is a bullish monthly Price Momentum Oscillator (PMO) cross, after at least two consecutive months with a negative reading. The (PMO) is an oscillator based on a Rate of Change (ROC) calculation that is smoothed twice with exponential moving averages that use a custom smoothing process.
- The (PMO) is a slightly slower oscillator than the Moving Average Convergence/Divergence indicator (MACD) and often precedes a major trend move in the direction of the cross.
- While 4 signals is not a large sample size, it is the only available data to work with.
- Of the four prior occurrences, (DIA) was higher 12 months later, 100% of the time, with an average return of 17.31%, (full data below).
- The bullish monthly (PMO) cross, coupled with a monthly base breakout to new all-time highs, are two very strong trend buy signals.
- Disclosure: We are holding a long position in (DIA) at the time of this post.
(DIA) MONTHLY, SINCE INCEPTION IN 1998, WITH THE FOUR PRIOR SIGNALS
Larry Tentarelli
Chief Technical Strategist
Blue Chip Daily Trend Report, LLC
Blue Chip Daily Trend Report
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