A Divergent Look at the Dow

Dec 16, 2007: 8:40 PM CST

With 2007 nearing its close, I thought it would be interesting to look at the #1 best performing, and the #30 worst performing stock in the Dow Jones Industrial Average so far:

Can you guess what the #1 stock was? The result may surprise you.

McDonalds (MCD), up from $42 to $62 this year (a 47% increase):

McDonald’s weekly chart spanning 2 years (price has doubled from $30 to $60):

And what, might you ask, was the worst performing Dow Jones stock this year?

It was a financial stock named Citigroup (C), which declined from $54 to $30, a 44% plunge:

Citigroup’s Weekly chart spanning 2 years:

Notice how, on both weekly charts, the key moving averages helped support (or resist) price moves, even if doing so temporarily. That is another discussion, however.

What would have happened had you bought McDonalds and shorted Citigroup as a strange ‘hedge-play?’

Unsurprisingly, your relative position (hedge) would have more than doubled in value.

Hindsight is always wonderful, of course, but it’s always great to know what happened this year so that you can study and see if you can catch next year’s big Dow winner and avoid (or hedge with) next year’s big Dow loser.

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