BALTIMORE (Stockpickr) -- The big indices gave back nearly a full percentage point each on average yesterday, reminding investors that the sideways churn isn't over yet. Just when the broad market was grasping at new highs, it got swatted lower in a move much like the one back at the start of April.
That prolonged sideways price action is frustrating, but it's not particularly ominous -- unless you own some toxic names in your portfolio. Frankly, the biggest gains this year haven't come from picking the right stocks; they've come from not owning the wrong ones.
Today, we're taking a closer look at five large-cap names that look toxic in May.
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.