Wait. How does a flat trading day spell potential gains as we approach year-end?
Even though the S&P 500 gained a paltry 3.17 points yesterday, as far as I'm concerned, the key to yesterday's market action was the fact that stocks held above support and bled off more of their overbought momentum. Those two attributes will be key as major indexes lay a foundation for further gains in 2011.
Economic data is always an important factor, but market fundamentals are less important right now. Ultimately, the market's driven by supply and demand, and investor sentiment is going to be the main driver of price action in the next few weeks. Now, as investors surmount their anxieties over the rebound that stocks have enjoyed since 2009's lows, the bulls could have an opportunity for another rally leg in the first quarter of 2011.Let's hope for another quiet week for Wall Street in the mean time. Related Article: 4 Stocks Poised for Breakouts That's not to say, of course, that there won't be more immediate opportunities for technical-analysis-driven gains. As always, this week we're taking a look at three more promising technical setups. Technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's chart patterns 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 planning their stock execution. Here's a look at this week's potential trades.
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