BALTIMORE (Stockpickr) -- With stocks continuing to underwhelm in yesterday's trading session, the attention is turning toward trading. After all, technical cues can give investors a glimpse of what type of movement to expect from stocks, regardless of which way the market's moving. This skill is becoming increasingly valuable as a slew of economic fundamentals weighs in on already anxious investors.
Technical analysis is a way for investors to quantify qualitative factors such as investor psychology based on a stock's chart patterns and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
But all too often, investors don't know where to start. So every week, Stockpickr takes a look at stocks that could be staging a technical move soon and compiles a portfolio of promising
Here's a look at this week's stocks.
Unlike most broad-based indexes, food processor
is seeing a strong start to 2020, with shares of the company up more than 8% year-to-date. That rally has been thanks in part to the fact that Ralcorp enjoys one of the top slots in the private-label food industry, one that's benefited greatly as consumers looked to stretch their grocery dollars the last couple of years.
Shares of the company broke out on the company's Feb. 4 earnings news, which exceeded Wall Street's expectations thanks largely to increased production efficiency at the company's facilities. But that breakout might not be the end of Ralcorp's gain potential. With shares currently sitting right under a key resistance level at $64.60, a close above the horizontal blue line could spell a significant rally for shares.
That resistance level could also prove to be a significant stumbling block if stocks don't start to regain momentum this week. Wait for a sustained break above the $64.60 level before considering going long.
Another food company that's forming a potentially bullish pattern is
Del Monte Foods
. The company, which manufactures a number of fruit and vegetable products as well as a burgeoning pet product line, just ended the week on a high note after the successful refinancing of its $1.1 billion credit facility.
But fundamentals aside, an ascending triangle should catch traders' attention for the coming week.
An ascending triangle, a bullish pattern of rising prices amid a fixed resistance level, is a key long-side pattern that we turn to for our technical set-ups. With resistance currently at around $11.79 for DLM, a breakout above that level sends a strong buy signal for shares of the company.
A breach of the horizontal blue line could spell a new 52-week high for the $2.3 billion food company.
Regency Centers Corporation
is a real estate investment trust that owns and operates community shopping centers in 29 states. And while the beleaguered real estate market has acted as a significant black cloud for investors until now, the technicals are showing some potential.
With shares currently right below its 50-day and 200-day moving averages, which chart out REG's average price over the trailing 50 and 200 days, respectively, a significant resistance level is currently presenting itself -- normally not the most bullish signal.
But with the 50-day about to cross over the 200-day, and the potential for upward pressure from the broad market this week, the chance of a breakout puts profits in sight. Currently, Regency's short-term price target stands at $37.90 -- a respectable amount of upside potential if this play works out.
Again, the chance for a bounce lower is real, so our trigger to take the trade is a close above both moving averages.
To see these plays 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.