Last up is $1.3 billion cosmetics name
). Despite a 72% rally since the calendar flipped over to January, Revlon is looking "toppy" from here in the long-term. That means that shareholders should start thinking defensively as REV moves lower into this week.
Revlon is currently forming a head and shoulders top, a bearish reversal setup that indicates exhaustion among buyers. The setup is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head; the sell signal comes on the breakdown below the pattern's "neckline" level, which is right at $23.50 at the moment for REV. If this stock can't catch a bid at $23.50, unload it.
REV's outperformance up to this point has been a byproduct of stellar relative strength for the first three quarters of the year. But that uptrend in relative strength broke back at the end of October, and shares have been giving points back ever since. The break in the relative strength line is a big signal that you don't want to own this stock anymore.
To see this week's trades in action, check out the
Technical Setups for the Week portfolio
-- Written by Jonas Elmerraji in Baltimore.
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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
Investor's Business Daily
, and on
Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.
Follow Jonas on Twitter @JonasElmerraji