Shares of $Avis Budget(CAR.US)$ have increased around sevenfold this year, helped by a bounceback in travel and popularity with the online day-trading crowd. The company's stock has accounted for around one-third of the 2021 gains of the $Dow Jones Transportation Average(.DJT.US)$, according to Dow Jones Market Data. It has made up more than half of the index's gains since the start of September.

That is muddling signals from the 137-year-old index. Investors track it as a gauge of the broader economy because it includes railroads, shipping companies, and others that carry goods and raw materials to people and businesses. That sector has been hammered throughout the coronavirus pandemic by supply-chain constraints like port congestion, a truck-driver shortage and rising costs for raw materials.

Avis, on the other hand, is riding high. When the pandemic first hit and travel grounded to a halt, its shares fell below $10. But demand for rental cars has boomed this year. People are eager to vacation after months of staying home, and many view driving as the Covid-safe option over flying. Traders on Reddit's WallStreetBets forum also like the stock, particularly the company's plans to add more electric vehicles to its global rental fleet. On Thursday, Avis shares rose $16.32, or 6.4%, to $270.20.

The divergence means that the Dow Theory, a century-old tool for analyzing the stock market, might not be too helpful to investors right now. The theory holds that fresh highs in the Dow Jones Industrial Average must be accompanied by new highs in transports for the rally to last.

I do think 2021 might be the year that the Dow Theory takes a bit of a break." 

-said Mike Bailey, director of research at FBB Capital Partners.

In one example of the company's outsize influence, Avis shares more than doubled on Nov. 2, the day after it reported record profits. That lifted the transports index to a nearly 7% gain and its first record close since May. Without Avis, the index would have settled lower.

The DJIA is up about 17% so far this year. The transportation index has gained roughly 34%.

Morgan Stanley analysts likened Avis's operating profitability to that of some mature software companies, saying management is capitalizing on the strong rental environment.

But the run-up in Avis's stock price could also make it a risky bet. Options activity tied to Avis surged to the highest level in at least a decade on Nov. 2, according to Dow Jones Market Data. Some traders bet that the stock would keep soaring, others that it would plunge. Avis shares have fallen nearly 25% since their Nov. 2 record.

I'm nervous for investors chasing price action like that.

Don't chase those stocks. You want to be really careful."

-said AdvisorShares Chief Executive Noah Hamman. 

AdvisorShares' Dorsey Wright Alpha Equal Weight ETF portfolio has held Avis since Oct. 1.

Another factor possibly lifting Avis: 

Data showed mounting bets against the stock heading into November. Traders "short" a stock by borrowing shares and then selling them -- a wager they can buy them back later at a profit. Reddit traders have previously rushed to buy stocks that have large numbers of short-sellers.