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TheStreet Open House

5 Big Stocks Set to Slingshot Higher

Stocks in this article: AAPLCBRLALLTRVSYK

Travelers

First up this week is Travelers (TRV), the $25 billion insurance company. Travelers has spent much of 2012 forming a bullish ascending triangle setup -- a trade that broke out in early August. Now, though, a throwback in shares is giving investors a second low-risk chance to buy this stock.

Put simply, an ascending triangle is a pattern that's formed by a horizontal resistance level and uptrending support. The buy signal comes when shares push up above resistance. While that obviously already happened for TRV when shares moved above $64, the return back to test that former resistance line (the throwback I mentioned a minute ago) is a good thing for traders.

>>5 Rocket Stocks Worth Buying This Week

That may seem surprising -- after all, shares have been sliding -- but a throwback gives TRV the chance to confirm the strength of its newfound support level at $64.

The ideal entry point comes on a bounce off of $64. While the bounce means that you're sacrificing a few points of profits, it also greatly reduces the risks that TRV will slip through $64.

If you decide to be a buyer here, I'd recommend a protective stop just below the 50-day moving average.

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