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JD.com Inc. (NASDAQ:JD) stock has entered bearish territory, with a Death Cross signaling a potential downturn. The e-commerce giant is down 1.16% year-to-date and 20.51% over the past year, though it saw a slight uptick of 2.6% in the past month.
The recent sell-off by Walmart Inc. (NYSE:WMT) only adds to the uncertainty, as the retail behemoth announced plans to offload its stake in JD, aiming to raise up to $3.74 billion. This strategic move comes as Walmart shifts focus to its own operations in China, leaving JD to grapple with the market’s reaction.
Walmart’s decision to sell its JD stake follows a stellar earnings report.
Exceeding expectations on both earnings per share (reported 67 cents vs. 64 cents expected) and sales ($169.33 billion vs. $168.56 billion), Walmart has captured analysts’ attention with market share gains and improving gross margins.
In contrast, JD now faces the challenge of maintaining investor confidence amid this significant stakeholder exit.
Chart created using Benzinga Pro
JD stock’s Death Cross, where the 50-day moving average crosses below the 200-day moving average, suggests bearish momentum ahead.
Technical indicators further confirm the bearish trend. The stock is currently trading below its five, 20 and 50-day exponential moving averages, signaling strong selling pressure.
Chart created using Benzinga Pro
The share price of $26.79, below the 8-day simple moving average of $27.55, generates a clear bearish signal.
However, the stock is trading slightly above its 20-day SMA of $26.50, hinting at a brief bullish opportunity.
Yet, 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.
Chart created using Benzinga Pro
The Moving Average Convergence Divergence (MACD) indicator at 0.16 suggests a bullish sentiment, but 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 having traded mostly in the lower band. The stock did jump briefly to the upper band on the earnings beat, however, it appears to be now 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.
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