One of the companies facing potential trouble in the market is Northrop Grumman, an aerospace and defense stock that has experienced a 9% pullback in 2024. Despite recent positive news such as being awarded a $119 million U.S. Navy contract and increasing its quarterly dividend by more than 10%, Northrop Grumman is closing in on a death cross chart pattern. This pattern occurs when a stock’s 50-day moving average falls below its downward-trending 200-day counterpart, signaling potential losses ahead.
Another company on the list is Zimmer Biomet Holdings, a medical device firm that has struggled this year with an 11% loss in stock value. The stock’s 50-day moving average briefly showed signs of improvement by surpassing its 200-day counterpart earlier this year, but the momentum was short-lived. Recent concerns around Zimmer Biomet’s growth prospects emerged after the stock dropped more than 3% following management’s indication that quarterly results may not be consistent moving forward. This uncertainty has contributed to Zimmer Biomet being among the worst performers in the S&P 500 health-care sector this year.
IDEX Corporation, a laboratory equipment maker, is also facing challenges in the market. The stock is down approximately 5% and recently showed a golden cross pattern with its 50-day moving average surpassing its ascending 200-day counterpart. However, shares have plummeted more than 11% since April 23 when the company issued weaker-than-expected earnings guidance for the second quarter. This decline in stock value has put IDEX Corporation on the radar for potentially forming a death cross chart pattern.
Aside from Northrop Grumman, Zimmer Biomet, and IDEX Corporation, there are other stocks on the list signaling a potential death cross chart pattern. Companies such as Pool Corporation and Fortive Corporation are also facing challenges as their 50-day moving averages are slipping below their downward-trending 200-day counterparts. This trend signifies a loss of momentum and the possibility of further declines in stock value. Investors are cautioned to closely monitor these stocks as they navigate through a volatile market environment.
While the broader market may be trading near record highs, some individual stocks are showing signs of weakness. Whether it be due to company-specific issues, industry challenges, or broader market trends, investors should conduct thorough research and analysis before making investment decisions. The presence of death cross chart patterns and other warning signs should serve as a reminder of the risks that come with investing in the stock market.