Perrigo Company

Last up is Perrigo Company ( PRGO),the $11 billion pharmaceutical and nutritional firm. Like Kimberly Clark, Perrigo is forming a double top, but unlike the paper giant, things don't look quite as bleak for this OTC pharma company. Most significantly, while shares are forming a textbook double top, the uptrend (the dashed lower line) is still intact in shares. That doesn't mean that PRGO isn't a toxic stock, but shares may get a reprieve.

That said, it's important to know when that outlook changes -- and for Perrigo, it won't take long for this stock to give investors an answer one way or the other. From the standpoint of the double top, the sell (or short) signal comes on a break below $105. A breakdown below the downtrend would happen well before that, with shares testing trendline support this week.

If Perrigo is able to catch a bounce off of support, I'd recommend staying away until it can clear $120 -- those two tops show that there's considerable selling pressure up there right now, and the risk-reward doesn't make sense until it gets absorbed by less discerning buyers. Otherwise, the drop through $105 looks like a solid short-side trade setup for the next month.

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

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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 Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

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