Time to Sell These 5 'Toxic' Stocks

BALTIMORE (Stockpickr) -- The S&P 500 and the Dow made new closing highs yesterday, but don't let that fool you into thinking everything that markets are in "up, up, and away mode." Stock selection matters more than ever in 2014, and that's not likely to change with the calendar in the next few months.

Must Read: Hedge Funds Hate These 5 Stocks -- Should You?

Even though the S&P 500 Index is up double digits year-to-date, nearly a third of the individual stocks in the S&P 500 are actually down this year. It's the exact same story in the Dow. In other words, it hasn't been hard to own stocks that are toxic to your portfolio in 2014.

Today, we're taking a closer technical look at five new names that are looking "toxic" this fall.

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.

Must Read: Sell These 5 Stocks Before It's Too Late

AstraZeneca

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Up first is $93 billion pharmaceutical firm AstraZeneca (AZN). AstraZeneca has been a stellar performer so far in 2014, rallying more that 22% since the calendar flipped to January. But that long streak of outperformance is starting to show some cracks this fall. Now, a bearish price pattern is threatening a drop in shares of AZN.

AstraZeneca is currently forming a descending triangle, a bearish price setup that's formed by horizontal support to the downside at $67.50 and downtrending resistance above shares. Basically, as AZN bounces in between those two technically significant price levels, it's getting squeezed closer to that $67.50 support line. If that level gets broken, then AZN is open to a lot more downside risk. This is a long-term price setup, and that means it comes with equally long-term trading implications if and when the breakdown does happen.

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

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji