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5 Toxic Stocks You Should Sell in February


Don't let yesterday's price action (or the new ticker symbol, changed from Research In Motion's RIMM) fool you, BlackBerry (BBRY - Get Report) is still the same stock it was last week. The $6.8 billion cell phone maker spent most of the last year in a downtrend, dropping like a rock as competing handsets shoveled market share away from the firm. And even though the oversold stock bounced hard in the last quarter, it still looks toxic at this point.

>>3 Big Tech Stocks to Trade (or Not)

That's because BBRY is currently in the early stages of forming a head and shoulders top, a price pattern that indicates exhaustion among buyers. The head and shoulders is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head. The sell signal comes on the breakdown below the pattern's "neckline" level, currently at $11.50.

Momentum, measured by 14-day RSI, had been in an uptrend following this stock's lows back in the Fall -- but that uptrend broke at the turn of the new year. Now momentum is trending lower. Since RSI is a leading indicator of price, that doesn't bode well for BBRY. This is still a volatile stock, and it's likely we'll see big swings in both directions for a while now; if the neckline gets broken, though, look out below.
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BBRY $6.80 -4.09%
MHO $16.29 -3.84%
NOK $5.84 -2.01%
NUS $33.45 -0.80%
TLLP $40.01 -8.09%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

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