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5 Toxic Stocks That Are Poisoning Your Portfolio

Foot Locker

Up first is shoe and apparel retailer Foot Locker (FL). Foot Locker has actually managed to more or less keep pace with the S&P this year, turning out gains of 7% since the first trading session of 2013. But it's the trading setup in shares that gives this stock its toxic status.

Right now, Foot Locker is forming a bearish descending triangle pattern, a price setup that's formed by a downtrending resistance level above shares and horizontal support below them. Essentially, as FL bounces in between those two technically significant price levels, it's getting squeezed closer and closer to a breakdown below that support level at $31.50. When that happens, we've got a sell signal for shares.

It's worth noting that FL's sell signal is conditional. Toxic though this stock may be, if buyers can take control of FL, it could avoid generating a sell signal. That said, momentum, measured by 14-day RSI, is on the side of sellers. The momentum gauge has been in a downtrend since August. Since momentum is a leading indicator of price, that doesn't bode very well for FL.

Stock quotes in this article: FL, HEI, USAP, FTR, TEN 

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