BALTIMORE (Stockpickr) -- No matter which way the broad market's trending, nothing moves stock prices like earnings season, and this week's no different. With some of the biggest issues reporting their quarterly earnings this week, including two of today's plays, the potential for profitable high-volume trades is very real right now.
Every Thursday, Stockpickr analyzes the technicals for some of Wall Street's highest-volume stocks and takes a look at how to trade them using technical analysis, which 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.
With that in mind, here's
at how some of the biggest names on Wall Street are trading technically.
Chinese search giant
released good earnings numbers this week, prompting a double-digit pop in yesterday's trading. The company has performed well in general this year, spurred on by Google's threats to leave the Chinese market, leaving top-dog Baidu.com with an even larger share of the country's search business.
But we're not concerning ourselves with Baidu.com's fundamentals today. Instead, the technicals are the thing to watch this week. The stock broke above a significant resistance level at $470 yesterday, pushing to a new 52-week high. That leaves Baidu.com with a technically unrestrained upside -- and makes the chances of a materially higher move in the next week pretty good.
Still, there's always the chance that the stock's new support level will be tested, given the poor market performance so far in 2010. Wait for a second consecutive close above the horizontal blue line before going long BIDU.
It's been an interesting ride for
Bank of America
. With a new CEO, a repayment of the government's TARP funds, and improving credit market, investors who have been hanging on as the stock shed double-digits in the last six months have been offered somewhat of a reprieve from losses in 2010 compared with the market. But right now the technicals point to lower ground for the banking giant.
For the last two trading sessions, shares of Bank of America have traded below significant resistance at the 200-day moving average. With three key resistance levels currently standing in the way of the $16 mark right now, it's not unlikely that a bounce off the closest of those levels could push Bank of America to lower ground in the next week.
Wait for a bounce off the 200-day moving average (the thin red line) before betting against BAC.
fell hard in yesterday's trading as management delivered guidance that was below analysts' estimates for 2010. But don't eschew shares so quickly -- the company's chart suggests that a bounce higher is in order in the next few trading sessions.
ArcelorMittal tumbled to the intersection of two key support levels yesterday, a strong spot that should hold shares higher as traders take advantage of the stock's drop. Normally, fundamental changes in a company's operations, such as new guidance numbers, can alter a stock's technical outlook, but when shares fall to a key support level and stop, it suggests that shares are obedient to the technicals -- a prime time to trade.
With a short-term price target of $42.92, wait for a bounce back up off of the 200-day moving average before going long.
To see this week's trades in action, check out the
-- Written by Jonas Elmerraji in Baltimore.
Q&A: David Peltier will be on Stockpickr Answers on Feb. 11 to answer your questions.
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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
, and has been featured in
Investor's Business Daily