BALTIMORE (Stockpickr) -- Stocks have been steamrolling their way to new highs this week, finally breaking out of the sideways slump that's plagued markets since March. But while most investors pull out the champagne, not everything is headed for higher ground.
In fact, some big-name stocks look downright toxic as we head into June.
To make the most of the restarted rally in stocks, it's critical to unload the names that aren't working right now. So today, we'll take a closer technical look at five stocks that are starting to look toxic -- and exactly what conditions need to get hit for the sell signal to trigger.
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.