BALTIMORE ( Stockpickr) -- Just a month into 2014, and it's already been a rocky road. Since the calendar flipped over to January, the S&P 500 has shed just under 3%. With today's close, January will be the first month since August that closed lower than it started.
The important question now is whether February will bring a return to rally mode -- or whether this is just the start of the selling.
If the last year's price action is any indication, this is nothing new. The S&P's rally over the past year has been nothing if not orderly, and it's come with manageable corrections all the way up. But that doesn't mean that we're still in a "buy everything" market. Corrections, like this one, are your opportunity to unload the junk in your portfolio.
Or worse, the names that are looking "toxic" as we head deeper into 2014.
That's why we're taking a closer look at five "toxic stocks" you should be selling in 2014. To be fair, 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, they're some of the worst positioned names out there 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 this summer. 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.