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5 Toxic Stocks You Should Sell

Stocks in this article: JPM LTD NSANY PRU CCG

L Brands

Retail stocks have turned out some strong performance so far this year, and L Brands ( LTD) has been no exception -- the $17 billion specialty retail name is up more than 26% since the calendar flipped over to January. But that's all in the past. Now, LTD looks "toppy."

>>5 Big Trades to Take as the Fed Hits the Gas

L Brands is currently forming a double top, a price setup that's formed by two swing highs that peak at the same level. Those two tops happened in early August and then again in the middle of this month. A move through $56 is the signal that it's time to be a seller in LTD.

Momentum adds some extra evidence to downside in LTD. 14-day RSI had been in an uptrend for most of the year, but that uptrend broke when this stock made its first top in August. Since momentum is a leading indicator of price, that doesn't bode well for shareholders right now. Still, to avoid a false positive, I'd recommend waiting for $56 to get taken out before cutting LTD loose.

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