JD.com Inc. JD The stock has entered bearish territory, with a Death Cross a sign of a possible downturn. The e-commerce giant is down 1.16% year-to-date and 20.51% over the past year, although it has posted a slight uptick of 2.6% over the past month.

The recent sell-off by Walmart Inc. WMT Adding to the uncertainty is the retail giant’s announcement of plans to sell its stake in JD to raise up to $3.74 billion. This strategic move comes as Walmart shifts its focus to its own operations in China while JD struggles with the market reaction.

Walmart’s exit shakes JD shares

Walmart’s decision to sell its JD stake followed a stellar earnings report.

Walmart beat expectations on both earnings per share (reported 67 cents versus expected 64 cents) and revenue ($169.33 billion versus $168.56 billion) and has attracted analyst attention with market share gains and improved gross margins.

In contrast, JD now faces the challenge of maintaining investor confidence despite the departure of numerous shareholders.

Also read: Alibaba rival JD.Com plunges over 7% in premarket trading after largest shareholder Walmart sells shares, reportedly raising $3.74 billion

JD Stock Chart – Ads signal problems

Chart created with Benzinga Pro

JD stock’s “death cross,” where the 50-day moving average crosses below the 200-day moving average, suggests future bearish momentum.

Technical indicators further confirm the bearish trend. The stock is currently trading below its 5-, 20- and 50-day exponential moving averages, indicating strong selling pressure.

Chart created with Benzinga Pro

The stock price of $26.79, which is below the 8-day moving average of $27.55, sends a clear bearish signal.

However, the stock is trading just above its 20-day SMA of $26.50, indicating a short bullish opportunity.

However, with the 50-day SMA at $26.92 and the 200-day SMA at $26.92 both above the current price, the overall outlook remains bleak.

Chart created with Benzinga Pro

The Moving Average Convergence Divergence (MACD) indicator at 0.16 suggests 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 rather than indicating an oversold or overbought market condition.

The Bollinger Bands also paint a pessimistic picture, with JD shares trading mostly in the lower band. The stock briefly jumped into the upper band after the earnings forecasts were exceeded, but now seems to be returning to the lower band, reinforcing the pessimistic signals.

What’s next for JD shares?

Given Walmart’s exit and warning signs from technical indicators, JD stock could face a difficult road ahead.

Investors should brace for potential volatility as the company navigates these bearish waters.

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