GlaxoSmithKline (GSK)

SELL £15.77 TARGET £13.80 STOP LOSS £16.50

Market value: £77.2 billion

Prospective PE 2014: 12.5

Prospective PE 2015: 11.4

1-month price change: -5.1%

12-month price change: 10.3%

Dividend yield 2014: 5.3%

The chart for pharmaceuticals giant GlaxoSmithKline (GSK) has an unsettling look to it and the stock may be about to prove a bitter pill for investors' portfolio.

After a run that has seen the FTSE 100 firm's shares surge by 35% from last November's £13.18 low, a pull-back of some kind looks healthy. The appearance of a double-top pattern targets a retreat to £14.78, the 38.2% retracement of the rise from April 2009’s 987p trough to May’s £17.82 peak. The next stop would be £14.30, which sits close to both the top of a sideways congestion range that dominated throughout much of 2012 and also the 61.8% retracement of the last main rise. Should that level give way then the market will start to focus on £13.85 and the 50% retracement of the rise from 987p, a zone which a bull trend line is rapidly approaching.

Taking a broader perspective, the drug firm had languished in a large trading range for fully 11 years. The prospect of renewed weakness so soon after what might have been a new upward trend does not offer much encouragement. Perhaps the shares will prove to be slow burners as they first ease back to test support from the long-term trajectory of the bull trend line that is beckoning only to then regain momentum. For this to happen GlaxoSmithKline ultimately needs to make a decisive move above £16.45 and then stay there.