Technical Setups of the Week

While the market's recent volatility has been tough for most investors, the past few months have been a bull market for technical traders. Here are this week's technical plays.
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BALTIMORE (Stockpickr) -- While the market's recent volatility has been tough for most investors, the past few months have been a bull market for technical traders who make plays on short-term price movement. But don't think that you need to be an expert on the technicals to take advantage of the market's setups. If you've been wondering how to put charting to work for your portfolio, here's this week's look at a few select stocks that could be poised for a technical setup.

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.

Here are

this week's technical plays


Progress Energy


is one of the largest regulated utilities in the world -- and as such, it may seem like an interesting candidate for a technical play. After all, utilities are renowned for their consistent earnings, recession resistance and high dividend yields -- not exactly an appealing profile for stock speculators. But that doesn't mean that you should ignore this company's technical prowess on its face.

Shares of Progress Energy have been locked in a slow forming ascending triangle pattern since the end of 2009. This bullish pattern looks like it's finally paying off for investors thanks to a breakout in shares last week.

Right now, shares look poised to pull back and test support. If support holds, and if shares start to move higher in response, then it's time to make a move to the long side. I wouldn't recommend buying shares barring that bounce.


Banco Macro

(BMA) - Get Report

has been all over the place this year thanks to inconsistent earnings and no shortage of anxiety over investing in foreign banks. Still, that added volatility hasn't kept shares from gaining nearly 10.5% year-to-date. But there could be bigger gains in this financial stock's future.

For the last several months, Banco Macro's price ceiling seemed to be solid at $32; try as they might, investors weren't able to bid shares up past that resistance level. That changed this past week when Banco Macro pushed into 52-week high territory, levels that the company hasn't seen since last November. Bullish action in the 50-day and 200-day moving averages is solidifying the gain potential in place right now.

If the company can manage to make it to $34, shares of the South American bank could see much higher prices in the coming months.

There's a similar situation unfolding in another South American banking stock,

Banco de Chile

(BCH) - Get Report

. To be fair, geographic location is pretty much the only thing these two stocks have in common. From a size and performance perspective, Banco de Chile sits head and shoulders above Banco Macro. But ultimately, we're more interested in what's going on with this company's price chart.

Shares of Banco de Chile have been trading inside an uptrending channel for the last few months, bouncing back and forth between well defined resistance and support levels. But shares staged a breakout on Tuesday, potentially catalyzing a much bigger move in this stock.

With yesterday's market action completely above support, now looks like an attractive time to make a move on this financial stock. If you're going to take the trade, I'd suggest placing a stop right under the top of that channel.

To see these plays in action, check out the

Technical Setups for the Week portfolio

on Stockpickr.

-- 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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