BALTIMORE (Stockpickr) -- A string of better-than-expected earnings numbers -- including a couple of this week's Rocket Stock plays -- managed to push stocks higher yesterday, a much-needed boost that's sure to give more than a few distraught investors hope that things can still turn around in 2010. But we're not waiting for an upswing in stocks to make a move; we've got the technicals on our side.
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.
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has had a tough run in the past couple of years. Like most other companies intimately involved in the real estate market, homebuilders got shellacked in 2008 amid a virtual business halt. And although 2009 brought a jump in share prices, sales are still far from 2006's highs. But things are starting to look up technically for investors.
Despite a fair amount of hemming and hawing in the last few months that has essentially left share prices at September levels, a bullish ascending triangle is forming in D.R. Horton right now. With resistance right around the $13.25 level, a break above should result in a serious rally in the next week or so.
As usual, wait for the buy trigger -- the breach of the horizontal blue line -- to happen before considering going long on this play.
provides risk-management solutions to financial institutions, a very in-demand product offering right now as regulators focus on decreasing risks in the global financial system. Shares have already rallied hard this year, but the technicals suggest that RiskMetrics could be headed higher in the next week.
RiskMetrics broke out to a new 52-week high back in the beginning of 2010. While fundamental investors often shy away from new highs, afraid that they've missed the boat, a new 52-week high is actually a bullish signal for technical analysts because it means that the stock is devoid of selling pressure from investors who bought at a higher cost basis.
RiskMetrics has made its way to higher levels slowly and with pauses, an upward pattern that reduces downside risk. Consider going long on after a period of horizontal consolidation this week.
Small-cap biotech developer
is having a stellar 2010, with shares up more than 22% since the first trading day of January. With price movement like that, you can bet that traders have made a pretty penny thus far this year on the Brisbane, Calif.-based company. But there's potentially more to be made in the next week.
Unlike most of our weekly technical setups, which offer a distinct trade trigger and a single way to play, InterMune's presenting us with an interesting upside
downside trade right now. With current resistance right around $18 per share, how the stock behaves at that level will dictate which way to make the trade.
A bounce off of resistance -- and a close lower after making contact -- signals a short-side trade, whereas a break above $18 followed by at least two closes above that level suggest that a long-side rally is getting set up.
To see these plays in action, check out the
-- Written by Jonas Elmerraji in Baltimore.
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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
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Investor's Business Daily