BALTIMORE (Stockpickr) -- Stocks still haven't settled on a direction to move this summer, a setback for trend-traders hoping to ride investor sentiment in either direction. But while that decisive trend hasn't yet set itself up, a number of appealing trade setups are taking place right now in the biggest names on Wall Street.
Those setups are most likely to be set off by a barrage of fundamentals that are hitting the market as the second quarter of 2010 draws to a close, but traders will get a preview of how to place their trades by focusing on the technicals.
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.
at how some of the biggest names on Wall Street are trading technically.
has been in the news this month thanks to the announcement of the company's new iPhone 4 and impressive early sales numbers on the just-released iPad. Even more appealing is the potential for the company's new iAds platform, which offers advertisers the opportunity to reach more than 100 million iOS devices using better-integrated ad experiences. Apple has already captured more than half of the estimated mobile ad spending for the second half of 2010. and its potential to become a new cash machine is certainly there.
Technically, the company has been forming a bullish ascending triangle pattern for the last month, suggesting that shares are only a breakout away from a major upward move. The buy signal for this company is a sustained move above $270.
Fundamental factors that could trigger that jump center around the iPhone 4, including new scuttlebutt that a Taiwanese manufacturer is building a CDMA version of the iPhone 4 to be shipped to
customers in the fourth quarter of this year. Watch shares closely for a break of that $270 price level.
It's been a mixed year so far for
, better known to U.S. investors as Petrobras. The Rio de Janeiro-based energy company is just now starting to see its extensive investment in Brazilian energy exploration pay off, but that hasn't stopped shares from dropping nearly 20% year to date. That said, now's still a risky time to pick up shares of this stock.
The situation unfolding with
in the gulf has affected all deepwater oil companies lately, including Petrobras. That hasn't stopped many investors from piling in, however. Last week, the Brazilian government announced that it was picking up as many shares as it could in Petrobras' latest capital raise, an announcement that surely played a part in the stock's turnaround from $32 lows. But with shares approaching the 50-day moving average right now, a bounce lower is likely.
Without any nearby support, Petrobras could continue churning for a while. Don't even think about buying this stock until it cracks the 50-day moving average.
is having a strong week following the company's announcement that they were reaffirming a 4-6% jump in revenues thanks to strong growth in Latin America and China. But that doesn't necessarily mean that shares are headed higher in a meaningful way.
Wal-Mart is currently forming a pennant pattern, a continuation pattern that suggests shares are temporarily consolidating before staging a second leg downward. That's not to say that lower ground is inevitable for the $189 billion company. A break above the upper line suggests that a change of trend is actually taking place to the upside.
Barring any sort of fundamental catalyst, however, the most likely scenario is a spillage of shares out of the end of the pennant to lower ground. For a potentially more bullish retail play, check out shares of smaller competitor
. The stock could make a break upward if it goes above $55.
To see this week's trades in action, check out the Here's
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