A group of stocks are about to form a chart pattern that suggests investors are bearish: the worrisome death cross. A death cross encompasses a price chart pattern that emerges when a stock's 50-day moving average slips below its 200-day moving average. This can signal that momentum is weakening or that investors' sentiment over a particular stock is souring. Moreover, a death cross is also touted as a predictor of a forthcoming bear market pattern.
used data from FactSet to screen for stocks that are approaching a death cross, and found four names including fast-food giant McDonald's and athleisure brand Lululemon . McDonald's is once again flashing a death cross signal. Shares have slipped 10% in 2024, while analysts polled by FactSet remain optimistic with 67% issuing either a buy or overweight rating. Average analyst price targets call for 21% upside for the stock moving forward.
's Nick Wells contributed to this report.