Review
On December 23, 2018 when the Dow Jones Transportation Average (DJTA) was at 8,874.79, based on the work of Edson Gould, we said the following in our closing paragraph:
“We have a range from as low as 6,465.65 to as high as 19,992.65 in period from 2019 to 2023. The Dow Jones Transportation Average is currently undervalued. It is best to expect that it will decline to the extreme level of 6,465.65.”
Since late 2018, the DJTA has had the following price activity:
On March 18, 2020, the DJTA declined as low as 6,481.20, falling short of our 2018 estimated low by 0.24%.
Because the DJTA is slightly above our fair value estimate for 2021 (made in 2018), we expect that even if the Index does not achieve the overvalued level in the current year, the historical precedent is for it to be able to achieve the upper range (overvalued level) that we’ve set for it between now and 2023.
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