JD.com Inc. (JD) stock has entered bearish territory, with a significant technical indicator, the Death Cross, signaling a potential downturn. The e-commerce giant is down 1.16% year-to-date and 20.51% over the past year, although it saw a slight uptick of 2.6% in the past month. This bearish sentiment is further fueled by Walmart Inc.’s (WMT) recent decision to sell its stake in JD, aiming to raise up to $3.74 billion. This strategic move by Walmart, which follows a stellar earnings report, sees them shifting their focus to their own operations in China, leaving JD to navigate the market’s reaction to this significant stakeholder exit.
Walmart’s exit comes after exceeding expectations on both earnings per share (reported 67 cents vs. 64 cents expected) and sales ($169.33 billion vs. $168.56 billion). The company’s market share gains and improving gross margins have captured analysts’ attention, highlighting their success in the retail sector. Meanwhile, JD faces the challenge of maintaining investor confidence amid this significant change.
Looking at the technical indicators, JD stock’s Death Cross, where the 50-day moving average crosses below the 200-day moving average, is a strong indicator of bearish momentum. Further solidifying the bearish trend, the stock is currently trading below its five, 20, and 50-day exponential moving averages, signaling robust selling pressure. The share price of $26.79, below the 8-day simple moving average of $27.55, further reinforces this bearish signal. However, the stock is trading slightly above its 20-day SMA of $26.50, suggesting a brief bullish opportunity. Despite this, with the 50-day SMA at $26.92 and the 200-day SMA at $26.92, both above the current price, the broader outlook remains grim.
Analyzing the Moving Average Convergence Divergence (MACD) indicator at 0.16 indicates a bullish sentiment. However, the Relative Strength Index (RSI) of 48.80, indicates that JD stock is in a neutral zone, reflecting a lack of clear momentum, instead of pointing to an oversold or overbought market condition. Bollinger Bands also paint a bearish picture, with JD stock trading mostly in the lower band. While the stock briefly jumped to the upper band following a strong earnings beat, it appears to be treading back to the lower band, reinforcing the bearish signals.
With Walmart’s exit and technical indicators flashing warning signs, JD stock could face a challenging road ahead. Investors should brace for potential volatility as the company navigates these bearish waters. The company’s future success will depend on its ability to maintain investor confidence, navigate the Chinese market, and address the concerns raised by the bearish technical indicators.
