BALTIMORE (Stockpickr) -- With stocks teetering on the brink of a key support level right now, there's been plenty of activity going on this week to keep the traders satiated. Earnings are still going full tilt, a weekly FOMC meeting decision yesterday, and President Obama's State of the Union address last night suggest that the biggest stocks on the market are bound to see interesting action today.
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.
at how some of the biggest names on Wall Street are trading technically.
in its post-market release on Tuesday, causing a surge in share prices at this morning's open.
The company, which has faced deteriorating fundamentals amid a soft advertising market and increased competition from the likes of
, managed to make good use of its highly trafficked web properties to rake in earnings of 15 cents per share, excluding one-time charges, on revenues of $1.73 billion.
But let's focus on what the technicals are telling us. Yahoo! gapped up this morning in a post-earnings pop all the way to find support at the 50-day moving average. Finding support at that level means that shares have some downside protection and are in a reasonably good position for a long-side trade.
With current resistance sitting at the $17.25 level, the stock currently has enough upside potential to warrant a trade. Don't consider going long on this stock until it stages a second consecutive open above the 50-day.
There's been a lot of trading in the
S&P 500 SPDR
lately -- no surprise given the S&P 500's momentous tumble in the last few trading sessions.
This ETF gives investors exposure to more than 80% of the market, making it a reasonably good proxy for stocks at large. So what do the technicals say about how the market should move in the coming days?
Last Friday the S&P broke down, blowing past a significant support level at its 50-day moving average. And while that sharp downward move had investors nervous, there are a few technical reasons why things should stabilize now. For starters, Friday's breakdown wasn't quite as severe as it seemed. The index stayed right around support for most of the day, only falling past it toward the end of trading. And while the S&P was fairly overextended early last week, two colossal down days have put full stochastics, a measure of momentum, in oversold territory.
It's still not quite time to go long SPY; with shares sitting slightly above a lower support level, there's still a little bit of downside risk. Wait for a bounce off of the red horizontal line above before thinking about buying the broad market.
made waves in 2009 when it spun off its Brazilian unit in the biggest initial public offering ever in Brazil.
But the multinational bank has seen more headwinds in the last few months. Could this stock be sending a buy signal now?
Shares of Banco Santander are fresh off of a bearish head-and-shoulders pattern that sent shares significantly lower at the onset of 2010. And they haven't stopped there. With a downside price target of around $14.75 and shares currently around $14.16, it's clear that the bearish momentum has been hard on long-side investors. But with the stock's 200-day moving average within sight, a key support level could provide a bounce worth buying on.
Wait for a bounce off of the red 200-day moving average line before considering going long shares of Banco Santander. That signal could come as early as this week.To see this week's trades 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.