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.
Steve Ricchiuto, MZUHO Securities chief economist, and Bob Michele asset management global CIO with JP Morgan (JPM), joined BloomberTV's 'Bloomberg GO' to discuss the economy and the Fed raising rates.