Dow theory is a theory which says the market is in upward trend if one of its averages (industrial or transportation) advances above a previous important high and is accompanied or followed by a similar advance in the other averages. It helps in arriving at what trend prevails in market i.e., Bullish or Bearish. Higher bottom and higher top with high volume indicates bullish trends. Lower top and Lower bottom with high volume indicates Bearish trend. Dow theory uses line chart for analysis.
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