Microsoft formed a “death cross” – a bearish chart pattern this week that’s broadly seen as a sign of a continued decline ahead.
A death cross is when a stock’s 50-day MA slides below its 200-day MA.
MSFT printed a death cross at a time when escalating trade tensions, geopolitical uncertainties, and elevated valuations have been weighing on major averages.
Amidst the ongoing weakness, several other names seem headed for a death cross in the coming weeks. These include Caterpillar and Trane Technologies.
Here’s what these two companies have in store for investors in 2025.
Caterpillar Inc (NYSE: CAT)
Caterpillar is right at the cusp of forming a death cross with its 50-day moving average at $365 currently and the 200-day moving average at $361.
Shares of the engineering equipment company have already been struggling amidst uncertainty related to the rising trade tensions.
CAT is not doing all that well financially. In late January, it reported a 5.0% year-on-year decline in quarterly revenue to $16.22 billion – materially below $16.61 billion that analysts had called for.
More importantly, the New York listed firm said its revenue this year will be slightly lower than 2024, making Bernstein analyst Chad Dillard reiterate his neutral stance on CAT shares.
Dillard’s $360 price target, however, indicates about a 6.0% upside from current levels. Additionally, Caterpillar stock pays a dividend yield of 1.65% as well, which makes it a bit more attractive for those interested in setting up an additional source of passive income.
Trane Technologies Plc (NYSE: TT)
It’s been a while since Trane Technologies printed a death cross. The last time was in mid-2022.
But now its 50-day MA looks headed for a drop below its 200-day MA at $366. Shares of the company that specializes in heating, ventilation, and air conditioning have been struggling under the new US government.
That’s because President Donald Trump has been vocal against climate solutions and green investments. Recent weakness in Trane Technologies stock is all the more noteworthy considering the company came in ahead of Street estimates in its latest reported quarter.
“We expect continued strong performance in 2025 and are well positioned to deliver differentiated shareholder returns over the long term,” Dave Regnery, chief executive of the HVAC firm told investors at the time.
While TT shares may form a death cross in the near term, analysts remain bullish on them for the longer term. They see upside in Trane Technologies stock to $420 on average, that indicates potential for a close to 25% upside from current levels.
Much like CAT, the heating, ventilation, and air conditioning company is attractive for income investors as it’s a dividend stock that currently yields more than 1.0%.
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