Upstart's 15-Min Chart Indicates MACD and KDJ Death Crosses

The 15-minute chart of Upstart has exhibited a bearish signal with the occurrence of a Moving Average Convergence Divergence (MACD) Death Cross as well as a KDJ Death Cross as of 3:45 PM on July 23, 2024. This technical pattern suggests that the stock price may be poised for continued decline, with the momentum shifting unfavorably and indicating the possibility of further depreciation in value.

Upstart Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending platform, has seen its stock price undergo a notable shift in momentum as of July 23, 2024. Two prominent technical indicators, the Moving Average Convergence Divergence (MACD) Death Cross and the KDJ Death Cross, have emerged on the platform's 15-minute chart. This article delves into the implications of these bearish signals, examining the historical significance of each indicator and the potential impact on Upstart's share price.

MACD Death Cross:

The MACD Death Cross occurs when a stock's short-term moving average (in this case, the 12-day Exponential Moving Average) crosses below its long-term moving average (the 26-day Exponential Moving Average). This signal indicates that the stock's short-term momentum has turned bearish, potentially signaling a continuation of the downward trend. The MACD Death Cross has been observed as a bearish signal in various financial instruments, including stocks, and has often been followed by a period of declining prices [1].

KDJ Death Cross:

The KDJ Death Cross is another technical indicator that emerges when the KDJ Relative Strength Index (RSI) line crosses below the KDJ Stochastic line. This signal suggests that the stock is overbought and that its momentum is shifting bearish. The KDJ Death Cross has been considered a bearish signal in the past, with some traders using it to predict potential price reversals [1].

Historical Perspective:

While the MACD Death Cross and KDJ Death Cross are bearish signals, it is essential to maintain a historical perspective. As mentioned earlier, market history suggests that these signals have not consistently predicted market downturns. For instance, the S&P 500 index has risen in the year following the death cross in about two-thirds of cases, with an average gain of 6.3% [2]. Additionally, shorter-term time frames, such as one month, three months, and six months, have shown even more promising returns following the death cross [2].

Conclusion:

The emergence of the MACD Death Cross and KDJ Death Cross on Upstart's 15-minute chart should not be overlooked. These bearish signals suggest that the stock's momentum may be shifting unfavorably, potentially indicating further downward pressure on the share price. However, it is essential to maintain a historical perspective and recognize that these signals have not consistently predicted market downturns. As always, investors should exercise caution and consider other factors, such as fundamental analysis and overall market conditions, before making investment decisions.

References:

[1] Investopedia. (n.d.). Moving Average Convergence Divergence (MACD). Retrieved July 24, 2024, from https://www.investopedia.com/terms/m/movingaverageconvergedivergence.asp

[1] Investopedia. (n.d.). KDJ Indicator. Retrieved July 24, 2024, from https://www.investopedia.com/terms/k/kdjindicator.asp

[2] Jessica Olah. (2020, February 7). Understanding a Death Cross. Investopedia. Retrieved July 24, 2024, from https://www.investopedia.com/terms/d/deathcross.asp