The Dow theory is a theory which says the market is in an 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 average.
The basic idea of Dow Theory is that market price action reflects all available information and the market price movement is comprised of three main trends.
Bullish/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.