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Just three stocks are responsible for almost half of the Dow’s huge one-month rally

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The Dow Jones industrial average has gained about 1,200 points over the past month. And interestingly, nearly half of that advance has been produced by just three stocks.

Leading the field by a wide margin is Goldman Sachs: That stock's 26.5 percent rally over the past month has added about 320 points to the Dow. In second place is UnitedHealth, which is up about 15.7 percent, and has consequently tacked about 150 points onto the 30-stock index. Finally, Caterpillar's 17.3 percent run had added about 95 points, just ahead of JPMorgan's 90-odd point contribution.

As it happens, these four stocks, including JPMorgan, are the best performers over the past month. But their contributions could be seen as oversized due to their high share prices.

Unlike the or the Russell 2000, the Dow is a price-weighted index, meaning that its performance is congruent to that of a portfolio that owns a single share of each company contained in the index.

If one owned such a portfolio, the move by a $223 share of Goldman Sachs would impact overall performance almost 10 times more than the same percentage-sized move in $29 Cisco.

The Dow has been fortunate, then, that some of its largest dollar-priced stocks have also been its best performers, while some of its smallest stocks (such as Cisco, as well as Coca-Cola and Intel) have been laggards. As a result, the Dow is up 6.7 percent in the past month, while the market cap-weighted S&P 500 has risen just 4.5 percent.

The Dow's rally is "not at all" sustainable, said Eddy Elfenbein, editor of the Crossing Wall Street blog.

The effect of price-weighting is to give stocks like Goldman Sachs "outsized influence. So I'm not a buyer here — I don't think these stocks are going to lift the Dow any higher," Elfenbein said Friday on CNBC's "Power Lunch."

On the other hand, Oppenheimer technical analyst Ari Wald says that while the source of the price gains may be concentrated in a few stocks, "the rally has nonetheless been broad based," with 22 of the Dow components rising over the past month, and 77 percent of the index trading at about their individual average closing price over the past 200 days.

Wald found that in the six months following points at which 75 percent or more of the Dow components have been trading above their 200-day moving averages, the index has risen by an average of 4.1 percent.

"Historically speaking, the numbers argue for more gains for the Dow Jones industrial average," Wald said Friday on "Power Lunch."