Most Influential Stocks of Dow & Nasdaq

[carltonp]

Hello Traders,

I have style of trading that monitors the components of the DJIA to trade YM and the components of Nasdaq 100 to trade NQ.

I was advised the best approach would be to monitor a select few stocks of each index rather than the whole set of components. It was suggested that a select few will dictate which direction the whole index takes.

I was wondering if someone could advise on the best approach to selecting the most influential stocks of each index?

I believe one approach is to monitor the stocks with highest weighting for each index, but I would love to hear your opinions.

Cheers

Carlton

 

[soccerscott]

I would monitor either the highest weighted or pick the one with the highest beta as it should be more sensitive to price movements.

 

[Cranfordd]

I think shares of the retailer Home Depot and the telephone company SBC but
Communications are also being added to the 103-year-old Dow, replacing Sears
Roebuck, Goodyear Tire & Rubber, Chevron and Union Carbide.
I hope this would help.