Market action over the past week has been volatile, and at times, downright scary. With the major indices threatening short-term breakdowns, I like to look for stocks that have yet to make a downside move but sport chart patterns that show they’re on the edge. 

I also like to stick to slower-moving, large-cap stocks that offer a bit more predictability, albeit with smaller profit potential. I’ll take that trade-off in a risky market.

Consumer products giant Procter & Gamble (NYSE: PG) is one such stock. 

On this blue chip’s chart we see a variation of a head-and-shoulders top. This pattern is marked by a central peak flanked by two smaller peaks, and the lows between the peaks are roughly equal. 

This tells us the stock pulled back harder the last time than it did the time before, and then the ensuing rally failed to set a higher high to drive home the point that the trend was in danger.

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The sell signal happens when the support line connecting the lows, called the neckline, is broken to the downside. 

PG is holding up better in January than the broader market.

Relative performance analysis helps identify stocks that are the last ones investors are selling as the market falls. That suggests underlying demand to own them, so if and when the market rebounds, these stocks should be the strongest out of the gate.

But in a market that looks to be heading for a deeper correction, the effect can be just the opposite. When investors finally get around to selling them, the mood in the market has soured substantially. These stocks can quickly play catch-up to the downside since they have further to go before reaching respective support levels. 

Right now, PG is sitting just above its neckline and 50-day moving average, both near $89.50. A break of these features would be self-reinforcing, as investors following one or the other get their sell signals.

Should this break occur, then a simple measuring technique can be used to forecast a downside target. The height of the pattern from the top of the head down to the neckline is projected down from the break point to give us a target of $84.70, more than 5% below current prices.

It is interesting to note that there is a breakaway gap in October at that target price. Some people say stocks like to return to prior gaps to “fill them.” I don’t hold that view, but I do believe that they act as support and resistance for later moves. Reinforcing that support zone, the 200-day average is nearing that level as it rises from below.  

Recommended Trade Setup:

— Sell PG short on a break below $89.50
— Set stop-loss at $91.50
— Set initial price target at $84.70 for a potential 5% gain in four weeks

Note from the editor: We’re taking down our special report on the Top 10 Picks for 2015 tomorrow at midnight. 

Each pick was tagged by an indicator that can spot stocks right before they soar. In 2014, it identified many of the market’s best-performing stocks. Stocks that soared 80%… 119%… even 266% — all in less than a year.

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This article originally appeared on ProfitableTrading.com: This Blue Chip is Just 50 Cents Away From a Technical Breakdown