BALTIMORE (Stockpickr) -- The big-name stocks are ruling the market once again in April as traders pile into "high-percentage trades," the short-term bets that offer a relatively high degree of success for day traders. This week, the big-name plays are even more significant than they were last month as Wall Street digests fundamental data from a relatively small set of companies.
But even though earnings season is a ways away, there's still enough going on with the technical charts to fuel some more high-percentage trades this week in the high-volume stocks.
Stockpickr Tools Technical Analysis Forum
Technical analysis uses a stock's price movements to determine where shares are headed in the future. Technical charts are used every day by proprietary trading floors, the street's biggest financial firms and individual investors to get an edge on the market. And according to some sources, skilled technical traders can bank gains as much as 90% of the time.
Every Thursday, Stockpickr analyzes the technicals for some of Wall Street's highest-volume stocks and takes a look at how to trade them. Here's
at how some of the biggest names on Wall Street are trading technically.
We're now less than six months away from the two-year anniversary of
American International Group's
initial $85 billion bailout in September 2008, but shares of the once-great insurance giant remain a considerably risky play. AIG was one of the most glaring examples of how individual companies could have systemic effects on the U.S. economy -- and today, the stock is an excellent example of an issue that's heavily traded on its technicals.
And right now, those technicals are putting AIG's shares at a very key level for a potential upside play. AIG is presently bumping its head on a long-standing $40 resistance level after gaining double digits intraday on Wednesday. With a breakout within reach and bullish support behind it, this stock could potentially see even higher ground in the next week.
But AIG's still a very conditional upside play. As the media rails on some of the riskier behavior AIG took part in, shares could easily loose their steam (more on that in a minute). But the trade's a fairly simple one to make nonetheless. If shares break above $40 and then make a second consecutive open above that level, consider support stable enough to go long.
One of the key players in AIG's increase yesterday was
. That's because AIG was a key focus of the investment bank's letter to shareholders released yesterday.
, which offers Goldman's lengthy account of 2008's financial collapse, discusses the ways that the firm bet against the U.S. housing market and the relationship it had with fellow bailout recipient AIG.
Analysts don't appear to be pleased with the letter at first glance, a fact that could affect shares of Goldman tomorrow. But if the stock can shake off the bears a little while longer, traders could be able to take advantage of an ultra-bullish head -and-shoulders pattern that's forming in shares right now.
Typically, we'd expect to see shares move above the shoulder level line, reverse to test it, then bounce back up; that bounce is the buy signal for shares of Goldman Sachs. Don't forget about the company's approaching earnings date on April 20. That could seriously affect the trajectory of the company's shares.
We're sticking with financial giants to round out this week's list of Must-See Charts by turning to perennial favorite
. Although Citigroup has been a long-time choice for traders, long-term investors in the $124 billion bank haven't been so lucky. Shares are down nearly double digits since October 2009, largely a result of the devaluation TARP repayment has meant for existing shareholders. But that could change thanks to an emerging bullish pattern in Citi's stock.
Shares have been rebounding hard since February and have been forming a bullish ascending triangle pattern for the last month. While this ascending triangle isn't the strongest, Citi's visibility to traders magnifies the chances that gains can be made off of this trade. Wait for a break above the horizontal leg of the triangle before going long.
To see this week's trades in action, check out the
portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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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
, and has been featured in
Investor's Business Daily