BALTIMORE (Stockpickr) -- Wednesday marked the first official day of fall. The question now is whether the "summer doldrums" that have harangued stock prices since mid-July will extend to the final stretch of the year.
The big S&P 500 index is down 5.8% since the calendar flipped to January, putting U.S. stocks on track for their first meaningful annual decline since 2008. It's not all bad, though. Despite the correction in the broad market, a big chunk of the S&P 500 is still clawing higher here. 37% of the individual stocks are still up year-to-date -- and some are up quite a bit.
More important, a handful of big-name stocks look primed to move higher in the weeks ahead. To figure out which stocks to trade for gains this fall, we're turning to the charts for a technical perspective.
First, a little on the technical toolbox we're using here: Technical analysis is a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.
Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five big stocks to trade.
Up first is e-commerce giant Amazon.com (AMZN) - Get Report . 2015 has been a spectacular year for Amazon. Shares are up more than 72% since the beginning of the year, making this $251 e-tail stock one of the few major winners in a market that's been nothing if not challenging for most investors. But don't worry if you've missed the move so far; Amazon looks ready to kick off a second leg higher this fall.
Amazon is currently forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance up above shares at $550, and uptrending support to the downside. Basically, as shares of Amazon have bounced in between those two technically-important levels since the start of the summer, this stock has been getting squeezed closer and closer to a breakout above our $550 price ceiling. When that move happens, we've got our buy signal.
Relative strength, (not to be confused with RSI at the top of the chart) adds some extra confidence to the upside in Amazon right now. That's because relative strength is holding its uptrend from the start of the year, indicating that this stock is still outperforming the rest of the market long-term. As long as that uptrend in our side indicator stays intact, Amazon should keep on outperforming the rest of the market.
We're seeing the same setup in shares of natural gas transportation stock Oneok Partners (OKS) , albeit with one significant twist. Like Amazon, Oneok has spent the summer forming an ascending triangle pattern; the difference here is that Oneok's price pattern is showing up at the end of a downtrend rather than an uptrend. Either way, the trading implications are the same here; Oneok becomes buyable once shares move above $34.
Why all of that significance at that $34 level? It all comes down to buyers and sellers. Price patterns, such as this ascending triangle pattern in Oneok, are a good quick way to identify what's going on in the price action, but they're not the actual reason a stock is tradable. Instead, the "why" comes down to basic supply and demand for Oneok's shares.
The $34 resistance level is a price at which there has been an excess of supply of shares; in other words, it's a spot where sellers have previously been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $34 so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.
Remember to be reactionary with this trade. It's not a high-probability buy until the breakout actually confirms our buying pressure.
It's been a rough couple of quarters for Chinese stocks, and $35 billion direct sales firm JD.com (JD) - Get Report has been no exception. Shares of this Beijing-based commerce company have shed more than 35% of their market value since they peaked back in June. But long-suffering shareholders could be in store for a reprieve in shares of JD.com.
JD.com is currently forming a rounding bottom, a bullish reversal pattern that looks just like it sounds. The rounding bottom signals a gradual shift in control of shares from sellers to buyers. For JD.com, the buy trigger comes on a breakout above the pattern's resistance level up at $28, a price level that's held technical significance going all the way back to July. If JD.com can shove its way back through $28, we've got a very good indication that buyers are back in control.
Momentum, measured by 14-day RSI, provides some confirmation to the "bottomy" setup in JD.com. Our momentum gauge has been moving higher since the pattern started forming last month, signaling that buying pressure is building here. Still, price is the only thing that matters in terms of signaling an actual trade. If shares break out above $28, JD.com becomes buyable again.
Payment giant Visa (V) - Get Report is another big stock that's actually "working" in this market; shares are up more than 8% since the start of the year. In fact, Visa has been a "buy-the-dips stock" going all the way back to last fall. The good news here is that shares still look buyable this September -- and you don't need to be an expert technical trader to figure out why.
The price action in Visa is about as simple as it gets. Visa has been bouncing its way higher in a well defined uptrending channel since last November, ricocheting higher on every test of the bottom of its channel. This month, as Visa grinds along that lower bound of its long-term price channel, we're looking at a low-risk, high-reward opportunity to buy the next bounce higher.
Waiting for that bounce is important for two key reasons: It's the spot where shares have the most room to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before the channel breaks, and you know you're wrong).
Remember, all trend lines do eventually break, but by actually waiting for a bounce to happen first, you're ensuring Visa can actually still catch a bid along that line before you put your money on shares.
Last up on our list today is beaten-down energy stock EOG Resources (EOG) - Get Report . It shouldn't come as a big surprise that an oil and gas stock is looking pretty rough this fall, down more than 20% from the beginning of 2015 as energy prices cratered. What might be more surprising is that fact that EOG is starting to look like a buying opportunity from a technical standpoint.
EOG's reversal pattern is an inverse head and shoulders setup. You can spot the inverse head and shoulders by looking for two swing lows that bottom out around the same level (the shoulders), separated by a bigger trough called the head; the buy signal comes on the breakout above the pattern's "neckline". That's the $80 level in EOG.
EOG is another stock where momentum is adding a secondary bullish indicator for investors to pay attention to. 14-day RSI, our momentum gauge, has been in an uptrend since late July, making higher lows during each of EOG's three price lows. That's a bullish divergence that indicates that buyers are quietly stepping back into this stock. When $80 gets taken out, upside in EOG becomes a high-probability trade.
Of course, that's not the same as saying it's a "sure thing." Just be sure to keep a tight stop in place if you decide to buy the breakout.
Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.