BALTIMORE (Stockpickr) -- Stocks got shellacked yesterday, reversing the previous two days of upside in one fell swoop. Not surprisingly, the momentum-heavy Nasdaq got hit the hardest with a 3.1% drop. Yes, in case it wasn't already clear, Mr. Market is still in corrective mode this month.
And that's what makes it even more critical than ever to unload the toxic names from your portfolio. Today, I'll show you five big names you need to unload before the next leg down.
Must Read: 5 Stocks Poised for Breakouts
Just to be clear, 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, sellers are shoving around these toxic stocks 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 in the weeks and months ahead. 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.