Sell These 5 Toxic Stocks Before It's Too Late

Regeneron Pharmaceuticals

Last up on our list of toxic-looking names is Regeneron Pharmaceuticals (REGN), a stock that's currently forming a classic double top pattern in shares.

A double-top pattern is formed by two swing highs that come in at approximately the same price level. They're separated by a swing low that's the breakdown level for the pattern - a move below that low triggers the sell signal in shares. For REGN, that sell signal comes on a move below $165.

As a shareholder, it's important to remember that it doesn't matter why selling pressure is coming into this stock right now -- the two tops on this chart show us that it is. Now, it's just a question of whether that newly introduced selling pressure can overcome the holdout buyers sitting below that $165 level. If they do (with a breakdown), then it's time to exit this stock -- or even bet against it.

If you decide to take the short-side, I'd recommend keeping a stop on the other side of the 50-day moving average.

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

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>>5 Stocks Insiders Are Scooping Up

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>>4 Breakout Buys for January -- and One Sell

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

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