Small-cap insurance name Enstar Group (ESGR) has been missing out on the S&P's rally since all the way back in the summer -- and with price action coming to a head this month, ESGR could be in store for a big drop to start 2014. Here's why.
Enstar is currently forming a descending triangle pattern, a bearish price setup that's formed by a horizontal resistance level below shares and downtrending support pressing to the upside. Basically, as shares of ESGR bounce in between those two technical price levels, they're getting squeezed closer and closer to a breakdown below support at $133. A move through that $133 price level is the signal to sell (or short) this name.Relative strength is showing no signs of improvement in ESGR right now, which means that even after shedding almost 10% from its highs, this stock is still failing to keep up with the S&P's performance. Keep a close eye on this name while shares remain within reach of $133.
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