BALTIMORE (Stockpickr) -- The market was predictably calm in yesterday's trading, a sign that the market is waiting in anticipation of more "headline worthy" economic news today and tomorrow. That said, things aren't completely silent for market participants right now. With bearish pressure weighing on banking stocks, it's clear that investors are willing to sell now and ask questions later with respect to the financials (more on that in a few).
While bets against such a broad sector ultimately left major indices down for the day yesterday, there's a lot more to the market than meets the eye right now, with interesting technicals setting up in some of Wall Street's biggest stocks.
uses a stock's price movements to determine where shares are headed in the future. Technical charts are used daily 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.
Wondering how some of Wall Street's biggest names are shaping up right now? Let's
has been a Wall Street darling in recent years, traders have come to learn that this stock isn't infallible -- particularly given the cyclical nature of technology firms. With so much attention on one stock, it's no surprise that millions of investors are wondering where shares of Apple are headed. So what do the technicals tell us?
Right now, Apple isn't looking very appealing for long-side investors -- or on the short-side, for that matter. Shares topped out on Monday, hitting a 52-week high before closing below the open. They closed lower still on Tuesday, following a scary high-volume flirtation below $280 intraday.
Though Apple's chart isn't bullish right now, it's not really screaming "sell" either. Instead, it's cautioning that shares could fall further before turning back toward the upside.
With support right around $280, shares could drop approximately $7 per share before making any kind of retest of their 52-week highs. If you're hoping to buy up shares of Apple right now, wait for the pullback first; it could put an extra 3% in your pocket.
2010 continues to be an interesting year for
, the beleaguered oil company that became infamous for the Deepwater Horizon disaster, which killed 11 of the rig's crew and caused billions of dollars in damages to the Gulf Coast.
While the ultimate financial liability to BP won't be known for some time, shares of the firm have fallen 31% this year as anxious investors try to tally the costs. They could be getting some relief next week.
That's because shares of BP look to be prepping for a move higher, a gap trade between current support at the 50-day moving average and overhead resistance at the 200-day. Shares of this stock have been resting perfectly on the 50-day for the last month, consolidating as the company corrected from oversold status following the oil spill.
Now, with shares lifting up from their support level, a move up to resistance at around $45 seems like a likely scenario. While one bit of roadblock resistance lies above (the horizontal grey line), that level is unlikely to pose much of a problem barring bearish news on the stock. If you decide to trade this firm, place a protective stop right below the 50-day.
For a play in the other direction, let's divert our attention to those battered banking stocks.
opened underneath support yesterday, a bad sign for investors who are long shares right now. Simply put, the last two times this stock broke below that 50-day moving average support level, they tumbled all the way down to the next level at around $35.50 before hitting the brakes. That makes the likelihood pretty high that we'll see a return to that price.
To play this trade, consider betting against JPMorgan as it trades down that predictable path. Cover yourself on the upside with a stop loss right at $39 -- just a bit above current resistance.
To see this week's trades in action, check out the
-- Written by Jonas Elmerraji in Baltimore.
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At the time of publication, author had no positions in stocks mentioned.
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 Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.