BALTIMORE (Stockpickr) – The S&P 500 closed at another new all-time high yesterday (well, technically anyway), ending a mostly sideways session up 5 basis points by the closing bell. That constantly higher price tag for stocks is ramping up investor anxiety this summer -- and between earnings season here at home and geopolitical tension overseas, investors are right to be nervous.
As I write, the S&P 500 is pressing up against the top of its long-term price range, a fact that makes a correction look a lot more likely than materially higher highs this summer. And that's just in the broad market. Some individual names are due for a whole lot more than a correction this month. In fact, some stocks could be downright toxic to your portfolio's health.
So today, we're taking a technical look at five big stocks you should sell.
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.