Art seller’s stock completes bearish ‘double-top’ pattern, breaks below five-year uptrend line FactSetThis one chart sends two warningsSotheby’s stock selloff suggests billionaire art collector Liu Yiqian is likely to take a bath on the $170.4 million painting he just bought, if he hasn’t already. But that’s not all. The technical breakdown in the art seller’s stock chart also suggests investors in the broader stock market could get rained on soon, some analysts say. The mind-numbing price Liu Yiqian paid for a work of art not painted by someone named Gauguin, Cezanne or Picasso—it was for Italian artist Amedeo Modigliani’s “Reclining Nude”--had many questioning whether the art market was in a bubble. With Sotheby’s BID, +4.53% stock breaking below two key technical levels, there’s a good chance that not only is the art market in a bubble, that bubble is probably just about to pop. The stock completed a long-term bearish “double-top” pattern—the November 2013 high was one top, the June 2015 high was the other—when it fell in August below the September 2014 low. That also created a pattern of lower highs and lower lows that the century-old Dow Theory of market analysis suggests defines a downtrend. Soon after, the stock closed below a five-year rising trendline, supporting the notion that the previous uptrend had ended, and a new downtrend had begun. Based on data provided by Jason Goepfert, chief executive of Sundial Capital Research, the breakdown in Sotheby’s stock suggests a similar drop in art sales is likely. Sundial Capital Research “We can see that investors in [Sotheby’s stock] tended to anticipate peaks in large art sales,” Sundial analysts wrote in a note to clients. “By the time Sotheby’s lost a quarter of its value or more, it was a sign that art sales were about to cool.” Sotheby’s stock climbed 4.5% Thursday, to bounce off a three-year closing low in the previous session, but had still tumbled 36% from its June high. Art collectors aren’t the only ones that might be in danger. FactSet “Some investors watch Sotheby’s stock as a canary in a coal mine for the broad [stock] market,” Goepfert said, as previous sharp declines have acted as a “tip-off” of waning risk appetites. More from MarketWatch