Skip to main content

Can the 5 Worst Dow Jones Stocks Rebound in 2022?

It was a good year for the Dow Jones Industrial Average overall, which gained more than 18% in 2021. But not all stocks performed that well. Let's look at the losers.
  • Author:
  • Updated:
    Original:

The Dow Jones Industrial Average had a pretty good year, rising about 18.75% in 2021. The recent run to record highs certainly helped its year-end tally.

While better than its long-term average, the index lagged the S&P 500 and Nasdaq, which climbed 27.1% and 22% this year, respectively.

The Dow did outperform the Russell 2000’s 13.9% return, though.

In 2021, the Dow’s worst-performing stocks were Disney  (DIS) - Get Walt Disney Company Report, Verizon  (VZ) - Get Verizon Communications Inc. Report, Boeing  (BA) - Get Boeing Company Report, Merck  (MRK) - Get Merck & Co., Inc. Report and Honeywell  (HON) - Get Honeywell International Inc. Report, in that order.

I want to know if these stocks can make a recovery in 2022, so let’s look at the charts.

Trading Disney Stock

Daily chart of Disney stock.

Daily chart of Disney stock.

Disney was the worst-performer in the index, down 14% in 2021.

The stock went through a pretty rough stretch in the fourth quarter, falling in 13 of 16 sessions. The three “up days” in that stretch were gains of 0.25%, 0.10% and 0.21%.

Essentially, pauses before the next breakdown. Earnings didn’t help matters either.

Now the company is looking to dominate the box office in 2022 and it’s got investors hoping the stock is a dominant force next year too.

Disney is off to a good start, all things considered.

It’s putting in a higher low and a higher high. Now contending with the 10-week moving average and the prior gap-fill level near $157.50, bulls are looking for a continuation to the upside.

If they get it, bulls will no doubt be looking for a move to fill the gap from November near $174 and a tag of the 200-day moving average.

Trading Verizon Stock

Weekly chart of Verizon stock.

Weekly chart of Verizon stock.

Next is Verizon, which is lower by 11.4% so far this year. If we include the dividend, the losses drop to just 7.5%.

The stock had a nice rip earlier this month, bursting back through $52 and the 10-week moving average. From here, bulls want to see these two levels hold as support.

TheStreet Recommends

Should they fail, it puts the $50 area back in play. For multiple weeks in a row, this level was strong support. If it fails, we could see a retest of the March 2020 low just below $49.

A dip to this $48.50 to $50 area that holds as support could be a dip-buying opportunity.

On the upside, let’s see if Verizon can push through the 21-week moving average and rally to the $54 level. Over $56 and who knows, perhaps Verizon can see the $60 to $62 zone again.

Trading Boeing Stock

Daily chart of Boeing stock.

Daily chart of Boeing stock.

Boeing enjoyed a huge rally in late-2020 to its high of $278.57 in March 2021. Since then though, it’s been trapped in a brutal downtrend.

The stock recently bottomed just below $188 with strong divergence on the RSI (blue arrow) before rebounding in the latter half of December.

The key in the short-term will be $212.68 — the December high.

If Boeing stock can go monthly-up over this level in January, it could result in a quick move back up to the 200-day moving average. Above that and the $230 resistance zone is on the table.

On a break of the low near $185, Boeing stock could face more downside. Specifically, there is a pretty big unfilled gap down near $158.50.

Trading Merck Stock

Daily chart of Merck stock.

Daily chart of Merck stock.

Merck stock went through what many traders call a falling wedge (blue lines). Now breaking out and up from the formation, bulls are looking for more gains in 2022.

That’s particularly true as the stock was up 17% on the year less than two months ago. Now Merck stock is down 5.7% for 2021.

From the November high to the recent low, shares were down almost 22%.

A push over $77.50 puts the 50-day moving average in play, followed by the gap-fill near $82. On a move over $84.50, Merck stock could make another push up toward $90 and the gap-fill.

It also pays a 3.6% dividend yield for investors that are interested.

Trading Honeywell Stock

Daily chart of Honeywell stock.

Daily chart of Honeywell stock.

Last but not least we have Honeywell, which is down 2.6% on the year. With the dividend, the stock is down just 0.6%.

Like Boeing, Honeywell stock barely cracked the December low last week, but rebounded hard when it did — and did so with strong divergence on the RSI (blue arrow).

That said, Honeywell isn’t making a higher high yet.

On a rally, let's see how it handles the $212 area. Not only is this a key level, but it’s also likely where the declining 50-day moving average will come into play.

A push through this area likely puts the 200-day moving average on the table. Above the 200-day opens the door to the $235 resistance zone.

If shares dip below the 10-day and 21-day moving average, it’s possible the stock retests the $200 area.

A break of the low at $198.10 could put the low $190s and the 21-month moving average in play. Below that and there is a large unfilled gap down at $186.