Some stock investors and renowned analysts have been waiting for a price recession in the stock market, as the Federal Reserve continues to increase interest rates in the United States. In this context, three stocks indicate they could be affected by a longer downtrend, in case a ‘Death Cross’ gets confirmed.
Interestingly, a Death Cross is one indicator for technical analysis (TA) and it happens when a short-term moving average (50-day MA) crosses a longer-term moving average (like the 200-day MA), indicating a bearish trend reversal or trend validation downwards.
In this context, Finbold turned to some of the most traded stocks in the market and found out that three of them have either already crossed long-term moving averages, or are threatening a reversal. These three are:
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Ford stocks death cross
Ford stocks are changing hands at $12.13 per share by press time, having performed a death cross one month ago on September 22, at $12.70 per share. This death cross happened with the 50-MA crossing the 200-MA in the daily chart.
Notably, Ford had seen a golden cross just a few months ago on July 3, as it was reaching a local high at $15.42 per share. This golden cross was not enough for an uptrend continuation, with the price reverting right after, to its current situation.
Fotor Motor Company reportedly struggles with contract negotiations with the United Auto Workers (UAW) union, hinting that it may have hit its maximum limit for financial concessions.
Tesla stocks death cross
Differently from Ford, Tesla stocks are again testing a death cross with the 50-day MA against the 100-day MA, which is a less reliable crossing than the one against the 200-day moving average. TSLA is trading at $254.95 per share.
It is important to say that on June 8, TSLA’s 50-day MA crossed the 100-day MA for a death cross that was invalidated just two weeks later with a golden cross driving the prices to $299.29 per share.
Additionally, the company is expected to report a sharp drop in margins and Earnings Per Share (EPS) in its Q3 reports, according to Tokenist.
Marathon stocks death cross
Meanwhile, Marathon stocks performed a death cross on October 3 within the 50-day and 100-day moving averages. MARA is trading at $8.46 per share and its death cross happens seven months after a golden cross that was proven as a reliable indicator in March 2023, starting a short-term bull run to $19.88 per share in July 2023.
Marathon is a Bitcoin mining company with its stocks being highly correlated to Bitcoin (BTC). Besides the struggles from the leading cryptocurrency in the speculative market, Bitcoin miners are also struggling as the mining difficulty reaches its all-time highs — creating meaningful challenges do the mining industry.
The Senior Macro Strategist at Bloomberg Intelligence, Mike McGlone, also believes that Bitcoin will be the leading indicator towards a “great reset” that will negatively impact the stock market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.