Microchip Technology Inc. MCHP finds itself at a critical juncture, with its stock inching closer to a noteworthy technical indicator known as the Death Cross.
Having witnessed a 6.22% decline year-to-date and an 8.5% drop in just the past month, the once stalwart chipmaker faces a formidable obstacle.
Approaching Crossroad of Moving Averages
The current stock price of Microchip Technology stands at $80.85, with the 50-day simple moving average (SMA) at $87.91 and the 200-day SMA at $87.33. These moving averages are on a collision course, hinting at a potential Death Cross.
The intertwining of these SMAs paints a bleak future for Microchip stock, with technical indicators pointing towards an extended bearish phase. At present, the 20-day SMA at $81.71 looms above the stock price, accentuating the pessimistic outlook. In a glimmer of hope, the eight-day SMA of $77.65 indicates a bullish signal, although it fails to overshadow the prevailing downward trend.
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MACD, RSI: Bearish Influence Prevails
The Moving Average Convergence Divergence (MACD) indicator, currently at a negative 3.05, reinforces the bearish momentum gripping Microchip stock. Coupled with an RSI of 46.42, placing the stock in a neutral territory, the signals suggest that an imminent reversal is unlikely.
Further exacerbating the bearish sentiment are the Bollinger Bands for Microchip Technology, with a range of $76.97 to $90.47, showing the stock price veering towards the lower boundary. This alignment indicates a potential further decline in Microchip’s stock value.
As the specter of a Death Cross looms over Microchip Technology, investors are advised to exercise caution. The convergence of technical indicators signals a rough path ahead for the stock.
Despite the company’s robust fundamentals in microcontrollers, the market sentiment seems to forecast challenging times ahead.
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