Clorox and others are on the verge of making a death cross chart pattern

A small group of stocks are on the verge of forming a worrisome chart pattern known as a “death cross .” The wider market has floundered this week, despite being on pace to end May with gains. The Nasdaq Composite posted its worst day of the month on Wednesday, while more than 400 stocks in the S & P 500 ended the session lower. One subset of stocks, however, may be on the verge of breaking down further. A death cross occurs when a stock’s 50-day moving average falls below its 200-day average. The move typically signals that the stock is losing momentum and could fall further. CNBC Pro screened FactSet data and found five stocks at risk, including bleach and Glad bag maker Clorox . Clorox Shares of Clorox have fallen more than 10% in 2024. In April, the company missed missed Wall Street’s third-quarter estimates for revenue, while earnings surpassed expectations. Clorox executives tied the revenue miss to lower volumes that were hurt by a cyberattack in late 2023 that affected operations. Following soft consumer data in April, Goldman Sachs analyst Bonnie Herzog said Clorox may suffer from softer spending from lower income consumers and from private label competition. Baxter International Stock in medical equipment maker Baxter International is also on the verge of a death cross. Shares have pulled back 14% in 2024. TD Cowen analyst Joshua Jennings downgraded Baxter to hold from buy earlier in May, noting that Wall Street was becoming “impatient” waiting for the company to achieve 4% to 5% revenue growth, which was initially expected after the acquisition of Hillrom in 2021. “We do not believe this dynamic will get better in the coming quarters,” Jennings said. Other stocks nearing a death cross chart pattern include Illinois Tool Works and Abbott Laboratories . Illinois Tool Works Illinois Tool Works stock ended 2023 with the desirable golden cross chart pattern , (the opposite of a death cross, when a 50-day moving average rises above a 200-day moving average). While the golden cross suggests a potential uptrend, ITW is now approaching the bearish death cross chart pattern only five months later. Shares have already fallen 10% in 2024. Abbott Laboratories Shares of the medical devices company have pulled back almost 8% in 2024. Earlier this month, the U.S. Food and Drug Administration issued a Class 1 recall on thousands of Abbott’s HeartMate left ventricular assist devices following a series of deaths. A Class 1 is the FDA’s most serious recall designation.