5 Big Stocks to Trade for Gains
This morning, jobs, inflation and trade numbers have already hit Wall Street, with the trickle of information set to continue throughout the day. But economic stats are only part of it; a new earnings season is also underway this week. Those earnings numbers have the biggest potential to reignite the stock rally in April, particularly with the poor expectations analysts have laid out for the first quarter of 2012.
From a technical standpoint, Mr. Market is down but not out. While this latest pullback is deeper than the one we saw in March, the uptrend in the S&P 500 is still intact. That gives traders reason to get ready for another leg of this rally -- and reason for us to take a technical look at five of Wall Street's big-name stocks this week.
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, we take an in-depth look at large-cap stocks that are telling important technical stories. Here's this week's look at the technicals of five must-see stocks .
First up this week is Talisman Energy (TLM) , a $12 billion oil and gas company that's put up some less-than-impressive numbers so far this year. Since the first trading day of January, shares of Talisman have shed 5.4%, versus gains of close to 9% from the S&P.
But TLM is showing some signs of a potential turnaround in April.
Right now, Talisman is forming an ascending triangle bottom, a pattern that's formed by horizontal resistance to the upside and uptrending support acting as a sort of price floor for shares. As TLM's price bounces in between those two technical levels, shares are getting squeezed closer and closer to a breakout above $14.50 resistance.
That breakout is a buy signal for shares.
Momentum adds some extra evidence in favor of a breakout in TLM. With the uptrend in this stock's 14-day RSI still intact, Talisman is showing traders some upside bias right now.
Don't be early on the TLM trade. Wait for a breakout above $14.50 before becoming a buyer.