Charts counsel traders ought to wager on “workhorses” within the Dow Jones Industrial Common, says Jim Cramer

CNBC’s Jim Cramer on Friday told investors to stay away from Nasdaq Composite stocks and instead invest in names listed in the Dow Jones Industrial Average.

“Even though tech started the new year strong and was insanely good today, the charts as interpreted by Larry Williams say you have to be a bit wary of the show horses on the Nasdaq and bet on the work horses in the Dow “, he said.

Shares rose on Friday to end a positive week for all three major indices. The Nasdaq is up 11% this year as investors bet on less aggressive rate hikes from the Federal Reserve.

To explain Williams’ analysis, Cramer examined the daily chart of the Nasdaq 100, which dates back to November 2021.

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While some technicians believe it’s a bullish sign that the index broke above its 200-day moving average over the past two days, Williams notes that the Nasdaq-100 has fallen again after falling in the had broken through the level in the past, according to Cramer.

He then checked the daily chart of the Dow going back to February 2022.

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Unlike the Nasdaq-100, which Williams believes is a “show horse” index due to the high interest, the Dow is more representative of Main Street, Cramer said.

He added that the blue-chip index broke above its 200-day moving average in November and has stayed above it since.

“Williams finds this chart much more compelling,” he said.

For more analysis, see Cramer’s full statement below.

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