3 Dow Jones Stocks Looking for Comebacks: HPQ, AA, T

Since the advent of equity trading, investors have always tried to look for an edge in the markets, no matter how slight or seemingly spurious. It may surprise some investors to learn that the incomparable Charles Dow — whose innovative market research inspired the creation of the Dow Jones Industrial Average — originated the thesis that forms the backbone of the modern discipline of technical analysis.

The godfather of the markets would undoubtedly be amused that the entrance and particularly the exit of companies from the venerable Dow Jones index would become its own contrarian indicator.

A relatively new phenomenon labeled by some experts of the markets as the “index effect,” it proposes that the stock getting the boot from a major index — such as the Dow Jones — will eventually find greener pastures, many of them sooner rather than later. (more)

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