BALTIMORE (Stockpickr) -- Mr. Market has been in correction mode this month, a long overdue changeup in the trajectory for stocks. The last time the S&P 500 made a meaningful price correction was back in February.
So far, this correction is looking pretty meaningful. Since the calendar flipped to August, the S&P has shed 3.48% -- which means that, in just two weeks, the big index has returned approximately half of its performance year-to-date. But there's an important distinction between a correction and a crash. Even though stocks are retracing in August, the primary uptrend in the S&P 500 is very much intact right now.
The same can't be said for many of its individual components, though.
Right now, some of the biggest names on Wall Street are looking toxic. And there's a pretty good chance you even own one or two of them. That's why, today, we're taking a technical look at five toxic stocks you should sell.
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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.