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5 Toxic Stocks to Sell Now

Commercial Metals

We're seeing the exact same setup in shares of Commercial Metals Company (CMC - Get Report), a mid-cap steel manufacturer. Like Nissan, CMC is forming a descending triangle pattern, in this case with a support level at $18.50. A breakdown below that $18.50 threshold is our sell (or short) signal for shares.

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Whenever you're looking at any technical price pattern, it's critical to keep buyers and sellers in mind. Descending triangles are a good way to quickly describe what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That horizontal $18.50 support level in CMC is the spot where there's previously been an excess of demand for shares; in other words, it's a price where buyers have been more eager to step in and buy shares at a lower price than sellers were to sell. That's what makes a breakdown below support so significant -- the move means that sellers are finally strong enough to absorb all of the excess demand at the at price level. So if $18.50 gets taken out, you'll want to join them in exiting shares.

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SYM TRADE IT LAST %CHG
NSANY $19.75 0.00%
CMC $15.03 0.00%
JBLU $22.35 -1.70%
LNKD $220.66 0.00%
NOK $6.66 0.00%

Markets

Chart of I:DJI
DOW 17,568.53 -127.94 -0.73%
S&P 500 2,079.65 -12.01 -0.58%
NASDAQ 5,088.63 -48.8540 -0.96%

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