Beware these stocks forming the feared death cross — including 2 major consumer brands

Published Tue, Apr 16 20241:36 PM EDTUpdated Tue, Apr 16 20243:43 PM EDT

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. Using data from FactSet to screen for stocks that are approaching a death cross, CNBC 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. McDonald's has been under pressure in 2024 as tensions in the Middle East weighed on its fourth-quarter results. The company said earlier this month that it would purchase all of its franchises in Israel from local licensee Alonyal Ltd . Market sentiment toward McDonald's is somewhat sour heading into quarterly results later this month, according to Deutsche Bank analyst Lauren Silberman. However, she said concerns tied to "global strength and value leadership are overblown," and she thinks "the brand is well positioned for outperformance over time, particularly in a more challenging consumer backdrop." The analyst also lauded the company's positioning as a defensive stock in a more challenging macroeconomic environment and highlighted its favorable risk-to-reward skew. Lululemon is also nearing a death-cross chart pattern. The sportswear retailer has plummeted nearly 34% in 2024, but analyst sentiment remains high. Nearly 70% of those polled by FactSet maintain either a buy or overweight rating on Lululemon stock, and their average price targets imply about 39% upside ahead. Shares have struggled in recent months after the company issued soft guidance in March, underpinned by slowing U.S. sales and weaker demand. "While a fresh cloud of uncertainty now hangs over LULU, underlying growth dynamics for the brand appear intact, improved innovation and marketing should bolster sales expansion, at least somewhat, nearer-term, and share valuations are tracking close to historic troughs," Oppenheimer analyst Brian Nagel said in a report earlier in April. Other stocks flashing the death-cross signal on the list include telecom-focused real estate investment trusts Crown Castle and American Tower , as well as health-care tech name Teleflex . — CNBC's Nick Wells contributed to this report.