BALTIMORE (Stockpickr) -- When the market becomes fundamentally unpredictable, it's time to turn to the technicals.
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.
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rallied hard yesterday, gapping up more than 21% after excellent earnings numbers sent Wall Street on a buying spree.
The online travel company, which had been hit hard of late by slashed retail travel spending, saw nearly 60% sales spikes in its international business, while simultaneously widening its operating margins to an all-time quarterly high. With shares at a high of their own right now, this stock could be primed for a sustained move higher in August.
By gapping up in yesterday's trading, shares broke through the stock's previous 52-week high, solidifying support at Priceline.com's former resistance level. That new 52-week high leaves substantial upside in shares right now from an investor psychology standpoint -- after all, nearly all of Priceline's post-2008 shakeout investors are sitting on gains right now, a fact that relieves significant selling pressure from shares.
Despite all of the bullish action taking place in Priceline.com, this stock is currently sitting right on support with little in the way of downside protection from a technical standpoint. If you want to ride the upside momentum, I'd recommend placing a stop loss right below the current $270 support level.
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Yesterday was a similarly dramatic day for
, the results of which prohibit the company from using bundled prices or threats to maintain advantages over their fierce competition in the semiconductor arena. A pre-announcement of the move sent shares into the red early in Wednesday's trading, but Wall Street ultimately deemed the settlement relatively unimportant.
Now could still be an interesting time for Intel's owners, though. Shares of the microchip giant are sitting right above the 50- and 200-day moving averages, key support levels that stand as a sort of price floor for the stock right now. But Intel has been testing support for the last several days, threatening to send share prices materially lower on a break below the thin red line.
That's a big change from the bullish twist Intel took in mid-July, breaking out of a downtrending channel to fund support at the moving averages. At present, Intel's offering an unimpressive risk/reward profile for mid-term traders. I'd recommend sitting this play out.
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continues to see its investment prospects dogged by concern over balance sheet troubled and underperforming loans.
But for all of the bad press this stock has been getting lately, investors are completely eschewing the bullishness that's kept shares from falling significantly earlier this summer. Now a key technical pattern could be leading to a rally for Citigroup in August.
Shares of Citigroup had formed into a head and shoulder pattern back in the second quarter of 2010, but the ultra-bearish pattern ended up not triggering, instead causing Citi's shares to bounce higher off of shoulder level. In the weeks and months since, Citi has pushed above two major moving averages and started to form a bullish technical pattern, an ascending triangle.
The bank's ascending triangle pattern could be just the catalyst needed to re-test long-standing resistance at $5. Still, wait for shares to break above the pattern's trigger point at $4.30 before making the long-side trade on this stock. Keep your stop tight just below $4.
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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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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.