"Sell in May and go away." We've all heard that market adage. Fact is, it's anyone's guess whether that's good advice in 2017.
Even though investors are starting to feel a little anxious about stocks, the fact of the matter is that, as long as the big S&P 500 index scrapes up against all-time highs, there's not a whole lot of reason to bet on a sudden shift in the broad market's trajectory right now.
But even if the S&P continues charging higher from here, we're likely to see a meaningful chunk of this market not participate in the rally. Some might even be downright "toxic" to your portfolio. Avoiding those laggards might be even more important for your portfolio's performance this year than picking out the leaders.
To find the stocks to avoid, we're turning to the charts for a technical look at three you should consider selling here ...
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.
So, without further ado, let's take a look at three "toxic stocks" to sell--and when to sell them.