These stocks including an industrial giant are close to forming a dreaded 'death cross' chart pattern

Several prominent companies, including industrial giant Honeywell, American Tower, Waste Management, and Pinnacle West Capital, are nearing a "death cross" technical pattern, a bearish indicator where the 50-day moving average falls below the 200-day moving average. This development, which typically signals future price declines, emerges amidst broader S&P 500 pressure and questions surrounding the AI trade, with Honeywell's situation particularly notable given its recent strong Q2 earnings but concurrent share price decline and upcoming business spin-offs.

Analysis

Several large-cap stocks across diverse sectors are exhibiting bearish technical signals, specifically approaching a "death cross" formation where the 50-day moving average is set to fall below the 200-day moving average. This development coincides with broader pressure on the S&P 500 and concerns over the sustainability of the AI-driven rally. Honeywell (HON) presents a particularly complex case; despite reporting strong second-quarter results with an 8% year-over-year sales increase to $10.35 billion and an adjusted EPS of $2.75 that beat expectations, its stock has declined 8% year-to-date and is on the verge of a death cross. This negative price action may be influenced by uncertainty surrounding its plan to spin out three businesses by 2026. Similarly, American Tower (AMT), Waste Management (WM), and Pinnacle West Capital (PNW) are all nearing this bearish crossover. For AMT, its 50-day average of $206.38 is nearing its 200-day of $205.78, despite being up over 5% in 2025, but down 16.2% over the past year. WM and PNW also show their short-term averages ($225.36 and $90.03, respectively) precariously close to their long-term averages ($224.92 and $89.99), signaling a potential loss of upward momentum despite positive year-to-date performance for WM.

Key Decisions for Investors

• Investors should monitor Honeywell (HON), American Tower (AMT), Waste Management (WM), and Pinnacle West Capital (PNW) for a confirmed death cross, as this technical event could trigger further downside pressure from momentum-driven funds.
• For Honeywell, the current divergence between strong Q2 fundamentals and negative technical momentum warrants caution; the uncertainty related to the planned 2026 corporate spin-offs appears to be a significant headwind overshadowing recent earnings strength.
• The appearance of these bearish signals across multiple non-tech sectors could indicate a broadening of market weakness, suggesting a review of portfolio risk and a potentially more defensive posture may be prudent.
• Traders may consider establishing short positions or buying protective puts on these names should the death cross pattern be confirmed, particularly given the negative sentiment and broader market fragility.