It's one of the oldest theories on the market and so far in 2014, it's been very good for investors.
The Dow Theory holds thata bullish trend is confirmed when the Dow Jones Industrial Average and the Dow Jones Transportation Average are both making new highs.
And, right now, both industrials and transports are at their records. But, while the industrials are up 2 percent year-to-date, the transports have returned more than 10 percent.
"When you have a lot of economic activity, you're going to have transportation activity," explained Gina Sanchez, founder of Chantico Global.
Underlying the gains, particularly in the transport index, is the persistent low-rate environment, according to Sanchez, a CNBC contributor.
"The low and benign interest rates environment has been a big key behind the outpaced performance of this sector," said Sanchez. "If you want to continue to have a very strong view on this sector, you're going to have to take that interest rate view into account."
Sanchez believes investors generally are expecting steady interest rates. "But, if you expect rates to rise, then that could make it more difficult for this sector to continue to outperform in the same way."
Ari Wald, head of technical analysis at Oppenheimer & Co., is bullish on the transports as well as the iShares Transportation Average ETF (IYT), which tracks index.
"We like transports," Wald said. "More importantly, we continue to like transports."
Wald likes the IYT because of its exposure to airlines (about 15 percent), "which are in the middle innings of what we see is a very long-term secular turnaround that we think continues," he said.
Investors looking to buy shares in the IYT should be tactical, Wald said. "I'd be looking to buy on a pullback to its 50-day moving average," he said. "In particular, I'm looking at $142. I think that's going to be good support. I'd look to buy that ETF right there."
"We like stocks here," added Wald about the markets as a whole. "You want to play the parts of the market that are working well. Transports are doing well – very strong trend there. I think that's an area that continues to do well."
To see the full discussion on the Dow Jones Transportation Average, with Sanchez on the fundamentals and Wald on the technicals, watch the above video.