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5 'Toxic Stocks' to Sell in 2014

 

 

BALTIMORE (Stockpickr) -- With yesterday's modest retreat in stock prices, 2014 officially starts things off as the worst year for stocks since 2008. Not so fast, though -- the sky isn't falling just yet.

>>5 Hated Earnings Stocks You Should Love

After all, the S&P 500's paltry 1.09% decline year-to-date isn't exactly threatening the multi-year rally that we've ridden this far. Instead, that stat speaks more to the strength that the post-2008 rally has enjoyed.

When a 1.09% drop is a notable move, you know you're looking at a pretty good time to own stocks.

But that doesn't mean that it's a good time to own all stocks. The laggard names in the market right now could be downright toxic to your portfolio. And the time to unload them is now.

>>5 Dogs of the Dow to Buy in 2014

That's why we're taking a closer look at five toxic stocks you should be selling in 2014. To be fair, the companies I'm talking about today aren't exactly "junk."

By that, I mean they're not next up in line at bankruptcy court. 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 summer. 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.

>>5 Ways You Can Trade Like a Hedge Fund in 2014

So, without further ado, let's take a look at five toxic stocks you should be unloading.

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