Golden crosses and death crosses are common signals in technical analysis and refer to the relationship between short-term and long-term moving averages. The golden cross typically is seen as a bullish sign, perhaps a stock that has or is about to break out. The death cross, on the other hand, can be a bearish sign, perhaps warning investors to get out of the way or signaling that it may be time short the stock.
Here are five top technology stocks that recently saw their 50-day moving average cross below the 200-day average, a death cross, and could be considered contrarian plays or short opportunities.
Cypress Semiconductor Corp. (NASDAQ: CY) saw its death cross this week, its second this year, though in July the short-term average was below the long-term one for only about 10 days. Cypress announced a collaboration with Alibaba earlier this month. Shares are almost 9% lower in the past three months, and analysts on average recommend buying shares, though the sentiment is weak.
Facebook Inc.’s (NASDAQ: FB) death cross occurred last week, and the gap between the two averages was about 3% of the share price on last look. Friction among the management team is among Facebook’s woes, but it is still a top pick at Baird. The shares are down about 14% from three months ago, and analysts recommend buying shares.
Micron Technology Inc.’s (NASDAQ: MU) death cross came this past week, and the gap is up to a little more than a buck. It is one of the most shorted Nasdaq stocks but still a top Merrill Lynch pick. In the past 90 days, the shares are down 14% or so, and here too analysts recommend buying shares.
Nokia Corp. (NYSE: NOK) saw its death cross last week as well, as the 50-day moving average has retreated more than 9% since peaking in June. Analysts seem split on what to expect from Nokia, but its shares are only down fractionally from three months ago. The consensus recommendation is to hold shares.
Seagate Technology PLC (NASDAQ: STX) last week also saw a death cross, and the gap between the two averages has widened to more than 3% of the share price. Goldman Sachs recently warned about weakness at Seagate and its peers. The shares are down more than 17% in the past 90 days. Here too analysts recommend holding the shares.