No doubt about it, three full months into 2017, and this year is shaping up to be a "stock picker's market." In other words, despite the steady climb higher in the S&P 500 this year, a big chunk of this market isn't participating in the move ...

As I write, nearly one in three S&P components are actually down this year--and of those, most are underperforming the big stock market index by 10% or more. That's some pretty nasty underperformance from a huge subset of stocks.

Even more problematic, plenty more are teetering on the edge of breakdown territory as we head deeper into April ...

That's the bad news.

The good news is that the secret to crushing the S&P 500 this year isn't necessarily in picking out the very best stocks for the year ahead; instead, all you have to do is avoid the very worst ones.

So, to find the stocks to avoid this month, we're turning to the charts for a technical look at four you should consider selling here ...

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.

Just so we're clear, the companies I'm talking about today are hardly junk.

By that, I mean they're not next up in line at bankruptcy court--and many of them have very strong businesses. But that's frankly irrelevant to what happens to their stocks; 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.

Without further ado, let's take a look at four "toxic stocks" to sell--and when to sell them.

American International Group Inc.

Leading things off is $61 billion insurance giant American International Group (AIG) . AIG has been under pressure so far in 2017, losing about 5.2% of its market value since the start of the year. That means AIG is underperforming the S&P by a whopping 10.6% in the past three months--and shares could be ready to add to that performance gap this spring ...

AIG has spent the past two months forming a descending triangle pattern, a bearish continuation setup that's formed by horizontal support down below shares at $60.50, and downtrending resistance to the downside. Basically, as AIG pinballs between those two technically important price levels, shares have been getting squeezed closer and closer to a breakdown through that $60.50 support level.

Relative strength, the indicator down at the bottom of AIG's price chart, adds an extra red flag to this trading setup. That's because AIG's relative strength line has been stuck in a downtrend of its own since shares peaked in January, indicating that this stock's underperformance is continuing into the spring. If shares violate $60.50, look out below.

What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold.

Crescent Point Energy Corp.

We're seeing the exact same chart pattern right now in shares of $8 billion oil and gas E&P stock Crescent Point Energy Corp. (CPG) . Crescent Point has been forming an ascending triangle of its own for most of 2017, shedding 20% of its market value in the process. For CPG, the big breakdown level to watch is support down at $10.50.

What makes that $10.50 level in particular so significant for CPG? It all comes down to buyers and sellers. Price patterns, like this descending triangle, are a good quick way to identify what's going on in the price action, but they're not the actual reason it's tradable. Instead, the "why" comes down to basic supply and demand for shares of Crescent Point Energy itself.

The $10.50 support level in CPG is a place where there has been an excess of demand for shares since last November; in other words, it's a spot where buyers have been more eager to step in and buy shares than sellers have been to take gains. That's what makes a breakdown below $10.50 so significant--the move means that sellers are finally strong enough to absorb all of the excess demand at that price level. Put simply, if Crescent Point's share price violates $10.50, you don't want to own it anymore.

What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold.

Credit Acceptance Corp.

Meanwhile, things aren't looking good for the price trajectory in shares of $3.6 billion consumer auto finance stock Credit Acceptance Corp. (CACC) . This midcap car lender peaked back in late December, and it's been pointing lower ever since. Importantly, the nearly-14% selloff we've seen year-to-date has been extremely orderly. Translation: CACC is still stuck in a downtrend for the foreseeable future ...

CACC's downtrend is defined by a pair of parallel trendlines that have identified the high-probability range for shares to stay stuck within. In other words, every time this stock has rallied up to test trendline resistance, shares have been swatted lower in reaction. If you own this stock, it makes sense to sell the next bounce off of trendline resistance.

Waiting for that bounce lower before clicking "sell" is a critical part of risk management for two big reasons: it's the spot where prices are the highest within the channel, and alternatively it's the spot where you'll get the first indication that the downtrend is ending. Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're confirming that sellers are still in control before you unload shares of Credit Acceptance Corp.

What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold.

Southern Co.

Last on our list of potentially toxic trades is $50 billion electric utility Southern Co. (SO) .

SO is a holding in our Dividend Stock Advisor portfolio. Learn more now.

Southern hasn't done much of anything in 2017--while shares have failed to keep up with the S&P so far this year, they haven't plummeted either. As I write, this stock is up just shy of 2017 year-to-date. But the problem comes from the price action this stock has carved out as its meandered sideways: shares look "toppy" in the near-term.

Southern is forming a head and shoulders top, a classic bearish reversal setup that signals exhaustion among buyers. The pattern is identified by two swing highs that top out at approximately the same level (the shoulders), separated by a higher high (the head). The sell signal triggers when SO's neckline gets materially violated--that happens at the $49.50 price level, a line in the sand that's within spitting distance this week.

The side-indicator to watch in shares of Southern Co. is price momentum, measured by 14-day RSI at the top of this stock's chart. Our momentum gauge has made a series of lower highs since the pattern started forming, signaling that buyers are losing control of things as shares track sideways this spring. If $49.50 gets materially violated here, a whole lot of downside risk opens up.

What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold.

At the time of publication, author had no positions in the stocks mentioned.

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