There is a lot of buzz everywhere about the changes coming in the components of the Dow Jones Industrial Average (DJIA).
In case you missed it, due to Apple's (AAPL) upcoming stock split, Exxon Mobil (XOM) will be replaced by Salesforce.com (CRM) ; Pfizer (PFE) will be replaced by Amgen (AMGN) and Raytheon Technologies (RTX) will be replaced by Honeywell International (HON) .
Apple's 4-for-1 stock split takes effect at the end of the day on Friday, Aug. 28. The DJIA changes will become effective prior to the opening of trading on Monday, Aug. 31.
Some have complained about the fact that pretty much no one benchmarks to the DJIA. That the DJIA is very narrow. That the DJIA does not represent just industrial companies nor does it represent totally American companies with much of the earnings coming from overseas. And on and on.
As a technical analyst, Chartered Market Technician and former adjunct professor of the subject I take a different approach. I looked at the 30 stocks Tuesday morning to see how many were in uptrends, neutral or sideways trends and downtrends.
Before these changes I found, by visual inspection, 20 stocks in uptrends, five in sideways trends or neutral trends and just five in downtrends.
When Salesforce.com, Amgen and Honeywell are added to the mix the totals will improve to 22 stocks in uptrends and only four in sideways trends and another four in downtrends.
This should give a lift to the index going forward.
(Apple, Salesforce and Honeywell are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these shares? Learn more now.)
