Stocks are seeing pressure on Monday morning as investors digest stories that North Korea is moving what may be a nuclear tipped ICBM towards its shore, preparing for another test. The news has futures trading lower again and it will help to push a few stocks that were already walking a thin line between long-term bullish and bearish trends.
Today’s three big stock charts review the technicals of Hershey Co (NYSE:HSY), Juniper Networks, Inc. (NYSE:JNPR) and Medtronic plc. Ordinary Shares (NYSE:MDT). All three of these stocks have been threatening to break into longer-term technical trends, which should have investors moving them out of their portfolios now! The next few days will act as the make-or-break for these companies and others as additional volatility starts to hit stocks.
Hershey Co (HSY)
Consumer staples companies have been falling out of favor as the implications of higher interests rates continue to fall. These stocks were attracting investors for the last two years as they looked for alternatives to low yields from bonds, but with the Federal Reserve holding out on future hikes, stocks like Hersey have lost their spark.
- HSY shares are colliding with resistance at their 50- and 200-day moving average, which is likely to hold the stock at a new short-term low. This will force short-term traders back out of the stock and target another move lower.
- The aforementioned 50- and 200-day moving averages are preparing to form a “Death Cross” as the faster moving 50-day moving average is crossing below the 200-day. Historically, this signals that a stock is falling deeper into a long-term bearish trend.
- The MASD and RSI for Hershey shares are both signaling that a move lower from this pressure point has potential to careen shares lower. Also, HSY is now trading in a long-term bear market trend with the stock having closed below its 20-month moving average.
Juniper Networks (JNPR)
The networking space is a stock picker’s game as the sector has been splintered by companies that are performing and those that are falling behind. Juniper Networks finds itself in the latter camp as shares are trading at a loss for the year.
Now, JNPR stock is moving into a long-term bearish pattern that investors should be taking note of and avoiding.
- Juniper Networks shares are now working on their second month below their 10-month moving average with momentum building to the downside. JNPR stock last made a similar move in September 2016 ahead of a decline from $30 to $21.
- Like Hershey’s, Juniper Networks shares are seeing a bearish “Death Cross” technical pattern forming. The last of these patterns was in January 2016, after Juniper Network’s earnings results sent shares tumbling. JNPR traded in a volatile range after this, losing another 15%.
- The RSI readings for Juniper Networks, on all increments, do not indicate a pending bounce from being oversold. This suggests that the stock has further to run lower before opportunity traders buy the stock on a dip.
Medical device stocks have seen increased volatility through 2017 as the regulatory environment has turned hot and cold towards the industry. The uncertainty over where the industry is headed is likely to continue as the stalemate in Congress shows no sign of letting-up.
As such, the technicals are more decisive, forecasting a negative trend for Medtronic stock.
- After showing relative strength against the rest of the market and health care stocks, MDT shares are now losing momentum and breaking key technical levels that have traders shifting into sell mode.
- The 50-day moving average has just reversed its trend and is now moving lower. This is the first bearish reversal in this trend since October 2016 when the stock moved from $85 to $70, despite the “Trump Rally” strength.
- Currently, MDT shares are testing their 200-day moving average. A break below this trendline will bring more technical sellers into the market and force pressure on the shares. Over the short-term, the oversold indication from the stock’s RSI may provide a dead cat bounce, but from there, a break of the 200-day moving average will target prices in the 70’s.