5 Big Trades to Take for 'Data Thursday'
On the deck for today, we've got everything from housing and jobs numbers this morning to Federal Reserve stats slated to hit Wall Street this afternoon. And since it's earnings season, there's an even bigger pile of data that could impact market prices for this trading session.
I think that Mr. Market's current position looks unabashedly bullish - but I won't belabor the point today (you can get my longer-term take here ). Instead, I want to let the stocks speak for themselves with a technical look at five big tradable charts that could pad your portfolio this month...
If you're new to technical analysis , here's the executive summary.
Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.
Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at the charts of five high-volume stocks to trade for gains .
First up is home improvement retailer Lowe's (LOW) , a stock that's been on a tear lately. Shares of the $40 billion firm have rallied more than 36% in the last year, besting the broad market by a big margin. But more recently shares have been posting less impressive numbers, essentially sliding sideways. Here's why that's a reason to buy...
Right now, Lowe's is forming an ascending triangle pattern, a setup that's formed by a horizontal resistance level to the upside at $36.50 and uptrending support below shares. As LOW bounces in between those two technically important levels, it's getting squeezed closer and closer to a breakout above that resistance level. When the breakout happens, we've got a buy signal in this stock. The support level is in a shallow uptrend (it's nearly flat), but ultimately the trading implications are exactly the same.
With any technical pattern, it's critical to think in terms of buyers and sellers - not shapes. After all, triangles, wedges, and the like are a good way of describing what's happening on a chart, but they're not the reason why it's tradable. Instead, it all comes down to the supply and demand caused by those buyers and sellers.