By Roberto Pedone

WINDERMERE, Florida ( Stockpickr) -- Technical analysis can be a great asset to investors who want to determine what the trend of the market or a stock is before they throw down hard-earned money. Consulting the charts can help you spot important market action before it happens, preparing you to follow the trend and make the right trade.

Technical analysis is a method of evaluating securities by relying on the assumption that market data, such as charts of price and volume, can help to predict future market moves and trends. Technical analysis will help guide you to discovering the chart patterns that offer the highest probability of success. By consulting the charts and using technical analysis, plus combining those methods with fundamental analysis, you will truly have an edge over a majority of market participants.

From a technical perspective, the S&P 500 has put in a triple bottom pattern at 1040 which is now viewed as major support for the markets. The next area of significant resistance that traders should be watching is at 1100. Also, the 100-day moving average at 1107 is another area of major resistance that market players need to keep an eye on. If the S&P 500 can get above those resistance levels, then a move towards 1130 could be in the cards.

Keep in mind that as long as the S&P is under the 200-day moving average (1115.56), things could remain dicey for the bulls in the short term. True bull markets don't get confirmed until all the major indices are trading above both the 50-day and 200-day moving averages. Also keep in mind that every decent rally in the S&P since June has been met with sharp selloffs. A move above the 200-day that can hold would help to change that trend.

Here's a look at some compelling charts that are piquing the interest of the Stockpickr community.
More Technical Analysis

Stockpickr member shawnmks submitted Emulex Corporation ( ELX). This company is a provider of a range of storage networking infrastructure solutions that connect servers, storage and networks within the data center.

This stock formed a triple-bottom pattern at around $8.30 to $8.50 a share and has subsequently rallied back above the 50-day moving average of $9.22. You can see on the chart that as soon as Emulex broke above a key downtrend line that started back in late April, the stock quickly surged from around $8.50 to current levels near $10. This demonstrates why watching how stocks act at key trendlines is so important.

If you like this stock from the long side, now you're going to want to watch how it acts at two key levels: previous resistance at $10.63 and the 200-day moving average of $11.16. If it can manage to trade above those levels, then a run toward $13 to $14 a share could be in the cards. However, failure to get above either resistance level will make it very hard for Emulex to see any further upside from current levels.
Who Owns Emulex?

Stockpickr member shawnmks also submitted ProShares Short S&P 500 ETF ( SH). This ETF seeks daily investment results that correspond to the inverse of the daily performance of the S&P 500 Index. This ETF is very popular among day traders and short term trend traders who are interested in betting against the S&P 500.

You can see on the chart that every time this ETF has traded up toward $54 to $56 a share, it has not marked a good time to get in from the long side. That is simply because the S&P 500 has found a ton of support at around the 1040 area. However, whenever this ETF has traded down toward the $49 to $50 levels, it has found support and been a good buying opportunity as the S&P 500 hits its resistance levels around 1100 to 1130.

As I write this, the S&P is hitting some resistance at 1100. With that in mind, you might want put this ETF on your radar to see if it can start to find some support at two key areas: around the downtrend line below $50.50 a share and near $50 to $49 a share. If you think the S&P is going to pull back and fail at 1100, then those areas could make for good entry points.
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Stockpickr member Michael Morse submitted SPDR S&P 500 ETF ( SPY). This ETF generally corresponds to the price and yield performance of the S&P 500 index. This ETF is used by traders who want to trade the S&P 500 but don't want to trade the cash market futures.

You can see on the chart that the SPY found massive support at 1040 and subsequently formed a triple-bottom chart pattern. Since that bottom, the index has soared back up to some key resistance near the 200-day moving average of $111.15 a share. If you're a bull on the S&P 500, then you're going to want to see the SPY get above heavy resistance, so it can make an attempt at trading up towards $113.20 a share.

If I was a bull, I would want to see volume pick up as the stock makes an attempt to break above $111.15. If you don't see volume above the 3-month average daily volume of 228 million shares, then I would be very cautious of getting long the SPY. Keep in mind, that the S&P 500 has been basically trading in range from around $113 on the upside and $104.20 on the downside since June. A major move either way will not happen until we manage to break out of this channel on the S&P 500.
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Finally, Stockpickr member kjp712 submitted LSI ( LSI), which designs, develops and markets storage and networking semiconductors and storage systems.

LSI was able to find some solid support down around the $4 level as the stock formed a triple bottom at those prices in the last couple of weeks. Now LSI is moving into a key resistance level near downtrend line that started back in late April. If the stock can manage to trade above that downtrend line, then a run towards the 200-day moving average of $5.42 could be in the cards.

Keep in mind that the overall technical picture for LSI remains bearish. The stock is still trading below both the 50-day and 200-day moving averages. So if you can catch a nice trade in the short term it's worth taking, but be more cautious from a longer-term perspective until LSI can move above those key moving averages.
Who Owns LSI?

To see more technical analysis on stocks such as Xyratex ( XRTX) and iPath S&P 500 VIX Short Term ( VXX), check out the Charts of the Week portfolio on Stockpickr.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

Stockpickr is a wholly owned subsidiary of TheStreet.com.

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