Sonoco Logistics Partners
2013 has been a stellar year for Sonoco Logistics Partners ( SXL); shares of the $6.5 billion pipeline business are up more than 26% since the first trading day in January. But it looks like SXL is getting ready to give back some of those gains now.
That's because shares have been forming a descending triangle pattern since early March. The descending triangle is a price pattern that's formed by a horiztonal support level to the downside and downtrending support above shares. Basically, as SXL bounces in between those two technical levels, it's getting squeezed closer and closer to a breakdown below the support level that's been a floor for shares. That happens on a drop through $60.The relatively fast pace of SXL's uptrend at the start of this year could prove problematic for shareholders if a breakdown below $60 does happen. The stock didn't establish any support between $60 and $50, making the downside potential of the pattern significant. While SXL is trying to shake off the sellers by pushing through resistance, it's been unsuccessful so far. This stock becomes toxic on a print below $60.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts