This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Big Trades for a Ping-Pong Market

Chevron

First up is Chevron ( CVX), the $323 billion oil and gas supermajor. Chevron gets top billing today because it's had the highest correlation with the S&P 500 lately -- an unlikely pair given Chevron's hefty commodity exposure. But just like the broad market, Chevron is testing trendline support today, and there's a trade to be made in shares.

>>5 Stocks With Big Insider Buying

You don't have to be an expert technical analyst to figure out what's going on in shares of Chevron. The energy giant has been in an uptrend since mid-November (like the broad market), bouncing between well-defined trendline support and resistance levels all the way up. The ideal time to buy a stock in an uptrend is on a bounce off of support -- that's because trendline support is the spot where shares have the highest upside potential and the spot where downside risk (that is, how much you have to lose before you know you're wrong on the trade) is the smallest.

Notice that I said that it makes sense to buy on the bounce. Trendlines do eventually fail, so waiting for Chevron to actually bounce off of support confirms that shares can still catch a bid at that level. Yes, waiting does mean that you sacrifice some small upside, but it also materially increases the probability of a winning trade.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,155.74 +124.60 0.73%
S&P 500 2,000.62 +16.49 0.83%
NASDAQ 4,547.9460 +29.0440 0.64%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs