Last up is Lennox International (LII - Get Report), a small-cap heating and air conditioning maker that sells climate control solutions to both the consumer and commercial markets. It doesn't take an expert market technician to see what's going on in Lennox's chart right now -- this stock has been trading higher for all of 2012, climbing more than 54% year-to-date. But is the fact that the rally has been orderly that makes this stock tradable.
That's because LII is currently bouncing higher within an uptrending channel, a price range that's bounded by trendline resistance overhead and trendline support below. Since the start of the year, the channel has done a good job of identifying the likely extent of this stock's moves. Any stock in an uptrending channel presents a buying opportunity, but for risk-averse investors, the best time to buy comes after a bounce off of support.
That bounce is important because it shows that LII can still catch a bid at support before you buy -- support levels do eventually fail, and when they do, you don't want to be left holding the bag. The fact that support has held up on the last seven tests of that price level bode well for more upside. If you decide to be a buyer, I'd recommend keeping a stop just below that support line.To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.
Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet . Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily , and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts