BALTIMORE ( Stockpickr) -- It's been hard to miss the Santa Claus Rally that's filled investors with holiday cheer in the second half of December -- the big S&P 500 index hit a new all-time closing high on Christmas Eve, adding onto more than 5.7% gains booked since December 17.
To put that in perspective, the big index is up 12.6% since the start of 2014. That means that nearly half of the broad market's one-year performance has come in just the last six trading sessions.
So while the market stats might look attractive now, 2014's rally has been a whole lot more hit-or-miss than most folks realize. Own the wrong stocks, and you've underperformed the S&P 500 dramatically this year. That's precisely why we're taking a closer look at Mr. Market's naughty list: five names that look "toxic" today.
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
So, without further ado, let's take a look at five "toxic stocks" you should be unloading.