The sole bearish setup we're looking at today comes from UK-based bank
. HSBC has enjoyed some impressive price performance in the last few months, buoyed by huge strength in the financial sector as a whole. But now, a topping pattern in this stock could mean the end to its run higher.
HSBC formed a double top in February, which broke down at the start of this month. The double top, formed by two swing highs that hit resistance at the same level, is a common sign that a change-in-trend is about to occur for a stock that's been performing well. That said, I wouldn't recommend being short HBC here. Shares have already reached their downside objective last week, and I think sideways churning is a more likely outcome. The breakdown level at $55 and change is likely to remain an important resistance price for shares in March.
With the broad market continuing to make new highs, you won't want to short this stock here, but I wouldn't recommend buying it either.
To see this week's trades in action, check out this week's
Must-See Charts portfolio
-- Written by Jonas Elmerraji in Baltimore.
Follow Stockpickr on
and become a fan on