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5 Huge Stocks Ready to Slingshot Higher

IBM

There's a similar setup shaping up in IBM (IBM - Get Report) right now -- it's just not quite as far along.

Right now, IBM is forming an ascending triangle bottom, with resistance at $200 and uptrending support right at the 200-day moving average. While the ascending triangle typically occurs when shares are in an uptrend (as with CVS), IBM has been in a downtrend since the start of May. Ultimately, the particulars of the pattern are a whole lot less important than what's causing it. And for an ascending triangle, what's causing it is horizontal resistance and uptrending support.

$200 is an important psychological level because it's a large round number. For that reason, it's a price level that investors tend to notice, and a place where there's an increased likelihood of sellers looking to take gains and exit their trades because IBM looks "expensive". But psychological resistance levels like that also have a tendency to get broken easily.

When $200 resistance in IBM breaks, we've got a buy signal on our hands.

IBM, one of Ken Fisher's holdings, shows up on a recent list of 10 Century-Old Blue-Chip Stocks Still Earning Their Keep. To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
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SYM TRADE IT LAST %CHG
AAPL $128.70 -0.19%
BRK.B $146.15 1.95%
CVS $100.16 -0.30%
IBM $173.97 0.17%
XOM $89.11 0.29%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

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