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5 Huge Stocks to Trade in May

Stocks in this article: WMT ZNGA FB AAPL SPY

Wal-Mart

Wal-Mart ( WMT) is taking a breather this week, consolidating sideways after a swift rally from the mid-$60s. Even though WMT's recent price action hasn't exactly been riveting lately, there's still a trade to be made in this retail mammoth.

Wal-Mart's price action has been constrained within a rectangle pattern since the uptrend turned sideways. A rectangle is a pattern that's formed by two horizontal price levels: resistance above shares at $79 and support below at $77. Rectangles give traders a chance to catch their breath and figure out their next move after a big share price change. As a result, it makes sense to make a bet in the direction of the breakout from the channel.

>>5 Hated Stocks That Could Pop in May

Since this consolidation is coming after a prolonged uptrend, Wal-Mart looks likely to resume upside once this rectangle has run its course. Momentum backs that up -- 14-day RSI has been in an uptrend since November, and it looks like it's just starting to bounce off of its trend line. Since momentum is a leading indicator of price, that's a good sign.

I'd recommend keeping a close eye on $79 in May.

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