Tenneco (TEN) is another stock that's looking "toppy" right now. Shares of the small-cap car part maker have rallied around 16% in the last six months, but shares look likely to give some of those gains back thanks to a double top pattern that's currently showing up in shares.
The double top is a setup that's formed by two swing highs that hit their heads at approximately the same price level. The sell signal comes on a breakdown below the near-term support level for shares, currently right at $35. If shares slip below that price, we've got a sell signal for shares. Here again, momentum adds some extra evidence to downside in shares. While TEN had an RSI uptrend while it was climbing in the fourth quarter, that uptrend has since reversed into a downtrend. That makes downside the likelier outcome for TEN from here.
If you own shares, consider setting a protective stop just below that $35 level.
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