BALTIMORE (Stockpickr) -- The Christmas holiday should help turn the focus away from trading to end this week, though not necessarily by choice for many traders. Since Christmas falls on a Saturday this year, the bond and equity markets are closed tomorrow in observance.
But come Monday, with a full trading week to close the month of December, expect ample opportunities for a
volatility spike. As is our fashion, we'll attempt to make heads-or-tails of the market going into that action with another technical take on Wall Street's biggest names.
In case you're not familiar,
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.
UK-based cellular carrier
is the second-largest mobile phone service provider in the world, with massive customer numbers in Europe, the U.S. (through its 45% stake in Verizon Wireless) and Asia-Pacific. And while this firm has enjoyed relatively strong performance in 2010 -- approaching 18% when Vodafone's generous 5% dividend yield is factored in -- lower share prices could be on the road ahead for the stock.
Vodafone is starting to form a bearish head-and-shoulders top in shares right now, a reversal pattern that suggests this stock's
is due to come to an end. While the head-and-shoulders is probably one of the least reliable technical setups out there, its notoriety among new traders makes it an important one to monitor nonetheless. If this downside pattern triggers, it could spark significant selling pressure.
For that trigger to happen, we'll want to watch out for a break below the "shoulder level" line in the chart above. At present, that level looks to be around $25. This setup is still relatively nascent, so it's unlikely we'll see any sort of action until the New Year. Regardless, this is a pattern worth watching, especially if you own Vodafone shares.
Current big bets on Vodafone include
, whose portfolio also includes
has been having an active year thanks to its high-profile acquisition plans with
( MFE) and a major push toward designing chips specifically for mobile devices. While this stock's price has been relatively tepid in the last 12 months, a bounce off of support could bring some short-term gains for shareholders' portfolios.
Intel has been enjoying a strong uptrend since early September, a trend that apparently topped of at the beginning of this month. But shares are sitting right above a fairly significant support level right now, the convergence of an organic previous support level and now the positioning of the 50-day moving average. That dual support could act as a springboard for shares in the short term.
For traders thinking about taking advantage of a short-term rally, the key will be to wait for a bounce off of support before going long. For downside protection, I'd recommend placing a relatively aggressive stop just above the 200-day moving average.
As of the latest reporting period, Intel made up 1.1% of
and 0.8% of
. Jim Cramer recently highlighted the stock as an
, and it was one of
selected by Scott Kessler, equity analyst at Standard & Poor's, and Joel Achramowicz, analyst at Blaylock Robert Van.
Brazil's economy has been on fire in 2010 -- and so too has
, the region's biggest beer brewer and bottler of
products. Shares of the company are already up 47% in the last year, but I'd expect a bigger
for this firm.
Shares of AmBev paused their uptrend in October, consolidating between $130 and $145, to bleed off what had become extremely overbought momentum. Apparently, the pause was long enough for buyers, who bid shares above $145 for a
last week. Now, with a stock price that's well clear of that consolidation channel, there aren't any obvious upside barriers to this stock's price action in the near-term.
If you opt to go long shares of AmBev, place a protective stop just under that newfound $145 support level.
-- 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.