BALTIMORE (Stockpickr) -- Sure enough, data is the name of the game this week. With big-name earnings going full blast for the next month or so, investors are finally getting a good gauge of how businesses actually performed in the last quarter.
It's about time, too. Stocks have rallied hard in the last couple of months, and without the fundamental support for those seemingly inflated levels, stocks would otherwise be facing trouble. Rest easy for now: Following a few key releases, first-quarter 2010's early numbers look overwhelmingly positive.
But while Wall Street focuses on the fundamentals, we're eschewing those numbers in favor of short-term technicals.
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.
That's why, 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 potential trades.
While the increasingly competitive search engine business has proved challenging for
in the past few years, the $26 billion company continues to hang in there. Investors would do well to pay extra attention this week; earnings could prove to be the perfect spark for a bounce off of a key support level.
Yahoo! has taken its knocks recently at the hands of an underwhelming revenue infrastructure and continuous partnership setbacks. But those issues haven't had much of an impact on the company's most valuable resource: Web traffic. Yahoo's Web properties continue to be some of the biggest destinations on the internet, and until that changes, its commercial future should be well in tact.
Shares of Yahoo! broke above resistance at $18 late last week, with strong volume and moving average confirmation to back up the move. Right now, the stock is testing support at $18, but with earnings slated for today, good numbers could be the catalyst for a bounce.
Wait for investors' reactions before going long shares. The technical set-up ensures that there will be plenty of opportunity to jump onboard.
also announces numbers this week, and in the case of the nation's biggest cellular provider, a potentially bearish technical pattern is in the wings. Unless the company can make a significant impact on Wall Street, a sharp sell-off could be in store.
Verizon is vying to be the jack-of-all-trades data provider for consumers. From Internet to phone to television service, the company has its hands in every imaginable medium. As with many of the company's competitors, mobile is becoming an increasingly significant component of Verizon's product mix -- and a higher margin contributor to its bottom line.
Although the fundamentals look strong for Verizon, the technicals are telling a different tune right now. Shares are in the middle of forming a bearish head-and-shoulders pattern, a sign that shares could be on the verge of a sizable selloff if they break below shoulder level. Don't consider betting against this stock unless it actually breaches shoulder level.
may be best-known for games, its shares have been anything but fun lately, falling hard following an underwhelming earnings release. But while most sellers were happy to get out at discounted levels last week, traders could be piling on this week thanks to a bullish switchover.
Shares caught themselves right above the 50-day moving average last Friday, a key level that should act as strong support now. Downside risk is relatively limited on this trade, still wait for a close today above yesterday's end price before putting your money to work on this play.
To see these plays in action, check out the
-- Written by Jonas Elmerraji in Baltimore.
Follow Stockpickr on
and become a fan on
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.