This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Toxic Stocks to Sell Now


It's not exactly time to run for the hills in shares of heavy equipment maker Caterpillar (CAT - Get Report), but we're not far off now. CAT has been getting plenty of attention (and not the good kind) after lowering guidance, announcing a price hike, and cutting jobs from its factory line. But early signs point to more bad news for shareholders. That's why I'm recommending that you stay away from this stock.

>>5 Big Stock Charts You've Got to See to Believe

Right now, CAT is in the early stages of forming a head and shoulders top, not a particularly good sign, especially since shares of the $56 billion firm are a lot closer to their near-term lows than their highs. The head and shoulders indicates exhaustion among buyers, so it tends to be a particularly difficult setup for longs to overcome.

While CAT still hasn't formed its right shoulder, the trading implications are the same as long as shares fall through their $82.50 neckline. That's the signal the CAT is set to make a move lower.

Lest you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant."

Don't get caught on the other side of shorts on this trade.
4 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
CAT $77.84 0.00%
CTXS $82.67 0.00%
GM $31.75 0.00%
SPLS $10.38 0.00%
VNO $97.43 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs