Microchip Technology On The Brink: Looming Death Cross Raises Bearish Concerns

Microchip Technology Inc. MCHP is teetering on the edge of a significant technical breakdown as its moving averages hint that the stock may be nearing the dreaded Death Cross.

With the stock down 6.22% year-to-date and a steep 8.5% in the past month alone, the once-strong chipmaker is now facing a formidable challenge.

Moving Averages On A Collision Course

The stock price of Microchip Technology currently sits at $80.85, with the 50-day simple moving average (SMA) at $87.91 and the 200-day SMA at $87.33.

Chart created using Benzinga Pro

The looming convergence of these two SMAs suggests a Death Cross could be on the horizon, signaling a potential prolonged bearish phase.

The technical indicators paint a grim picture for Microchip stock. The 20-day SMA of $81.71 is currently above the stock price, reinforcing the bearish outlook. Meanwhile, the eight-day SMA, which stands at $77.65, provides a faint glimmer of hope as it offers a bullish signal. However, this is overshadowed by the broader trend.

Also Read: Applied Materials Navigates A Bearish Trend With Bullish Hopes Ahead Of Q3 Earnings

MACD, RSI: The Bears Are In Control

The Moving Average Convergence Divergence (MACD) indicator, sitting at a negative 3.05, underscores the bearish momentum gripping the stock. With an RSI of 46.42, the stock is in a neutral zone, suggesting it’s not yet oversold and that a reversal may not be imminent.

Adding to the bearish sentiment, the Bollinger Bands for Microchip Technology stock range between $76.97 and $90.47, with the stock price hugging the lower end. This alignment further suggests that Microchip stock may continue to slide.

As Microchip Technology inches closer to a potential Death Cross, investors should tread cautiously. The technical indicators are aligning in a way that could signal more pain ahead for the stock.

While the company's fundamentals in microcontrollers remain strong, the market seems to be pricing in a rough road ahead.

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