A handful of stocks are heading straight for the death cross. A death cross is a price chart pattern that forms when a stock’s 50-day moving average crosses below its 200-day moving average. It can be viewed as a sign that investors are bearish on a stock or that a stock’s momentum is weakening and will continue to decline, potentially making it a good time to pick up shares. The death cross is also used as a bear market predictor. CNBC Pro found just under 20 stocks, from financial giants to restaurant operators, that are close to forming a death cross. Take a look at the names below: One of them is McDonald’s , which has fallen 3% since the start of this year. Analysts surveyed by FactSet are confident in the stock, assigning an average rating of overweight and a price target that implies shares could rally more than 28% from Tuesday’s close. McDonald’s announced in late September that it will hike royalty fees for the first time in nearly three decades. Franchise royalty fees for U.S. restaurants will rise from 4% to 5% for operators opening new locations, the company said. Wells Fargo upgraded the fast-food chain earlier last month, saying the company is an “innovation engine firing on all cylinders.” MGM Resorts , which operates more than a dozen casino hotels in the U.S., has gained about 5% this year, on the other hand. The average analyst has an overweight rating, with a price target that indicates shares could pop more than 61%, according to FactSet. The casino operator last month experienced a cyberattack for a few days that disrupted its domestic properties. The incident represents a material risk to the company, MGM Resorts said, and could also hurt its credit rating, according to major credit rating agency Moody’s. Deere also made the list. The agricultural equipment maker has plunged 12% this year. Analysts covering the stock have assigned an average overweight rating and $444.26 price target, suggesting roughly 19% upside. Piper Sandler recently said in a note that it views Deere as a potential beneficiary of the next agriculture technology boom, which is getting supercharged by artificial intelligence and automation, farm digitization as well as other technologies. “DE views an inflection point in [agriculture], and believes advancements in [machine learning], computer vision, and compute can enable its vision to transform precision ag with tech such as self-propelled sprayers, autonomy, and a connected software platform,” analyst Clarke Jeffries wrote in a late September note. Wells Fargo is also close to forming a death cross and is down 5% so far this year. According to FactSet data, analysts covering the stock have an average overweight rating and $50.18 price target.
Source: www.cnbc.com