BALTIMORE (Stockpickr) -- "It's a market of stocks, not a stock market." Yes, that's a trite, overused saying, but never has it been more meaningful than this week. While the S&P 500 has been pressing up against new highs in recent days, market internals have been weakening. In other words, the big index is making higher ground on the strength of fewer and fewer stocks.
If you're continuing to use what's been working in this market for the last 15 months, then buckle in -- it's not working anymore. The biggest momentum names of late are rolling over, and money is flowing into the laggards of last year. Put simply, a lot of big name stocks are starting to look toxic to your portfolio right now.
And you might even own some of them.
So which stocks are set to drag your portfolio the lowest in the next few months? Today, we're taking a technical look today at five toxic stocks you should start selling.
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.