BALTIMORE (Stockpickr) -- We closed the books on April with yesterday's closing bell, raising the question of whether the whole "new month, new market" situation for stocks will keep holding true as we enter May. After yesterday's second straight day of selling, most investors would probably admit that they sure hope so.
April was basically a nonevent for stocks. In the last month, the big S&P 500 dropped 0.03%. In other words, investors got left with a big old goose egg for the month performance-wise. The last two days of selling didn't help either. Between Wednesday and Thursday, a whopping 80% of the stocks in the big S&P 500 index ended lower. Some ended a lot lower.
On average, the worst 10 S&P components dropped about 7% in that two-day stretch. Obviously, doing well in this market has less to do with owning the right names than it does with not owning the wrong ones.
Today, we'll turn to the charts to spot the next round of potentially "toxic" stocks.
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 entry and exit points.
So without further ado, let's take a look at five toxic stocks you should be unloading.