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If you do, those names could be sabotaging your returns just as the market comes off a correction this month. Take a quick look at any chart of the S&P 500 over the last few months, and it's clear that we've been in a pretty significant rally since the start of the summer --toxic stocks are the names that aren't participating anymore. That lack of upward mobility should be a big red flag for investors right now.
That's why, today, we're taking a technical look at five names that could be toxic for your portfolio this Fall...
To be fair, the companies I'm talking about today aren't exactly "junk."
I mean, they're not next up in line at bankruptcy court -- and, in fact, I even like a couple of this week's names fundamentally. But that's frankly irrelevant; from a technical analysis standpoint, they're some of the worst positioned names out there right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms this Fall. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.
For the unfamiliar,
technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
So, without further ado, let's take a look at
five "toxic stocks" you should be unloading in November.