Technical Setups: Winn-Dixie, Regal-Beloit

BALTIMORE (Stockpickr) -- Details on GM's IPO are the day's big market news, attracting attention from major financial outlets and from retail investors eager to get in on an offering of the Detroit auto giant's shares. On Thursday, shares of GM will begin trading again on the NYSE and TSX in one of the highest-profile IPOs of the year.

It's also one of the most popular. Estimates suggest that GM's share offering is 8 times oversubscribed and that the company is offering 30% more shares as a result.

>>Also: Car Stocks That Could Surge Ahead of GM IPO

That bullish anticipation could be a good thing for the market overall, given the S&P 500's current positioning right above key support levels. Thursday could help spark the next leg of this sentiment rally. For that reason, it makes sense to look at three technical setups that could benefit from increased market action.

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.

>>Also: 3 Stocks Setting Up for a Breakout

Here's a look at this week's potential trades.

2010 has provided a year of volatile stock performance for Regal-Beloit ( RBC), a $2.2 billion maker of electric fans used in HVAC systems and industrial applications.

While shares of the company are up around 8% year-to-date, those gains have come after a number of larger price swings that have taken RBC from large gains to losses and back in the last several months. Now, a move lower looks possible.

>>Also: 10 High-Yielding Industrial Electrical Equipment Stocks

Shares of RBC are setting up a bearish descending triangle pattern right now -- a setup that suggests shares will move lower on a breakdown below the stock's current support levels. Right now, that support level is $55, a level that's already been tested more than five times since the summer, indicating that share prices are extremely averse to moving lower.

If they do, however, a much larger downside move could be to come. Wait for that crack of the $55 level before betting against shares.

>>Also: 3 Stocks to Bet Against

On the other end of the spectrum is Winn-Dixie ( WINN), a stock that's fallen nearly 30% from price levels seen earlier this year.

Many of this grocery retailer's woes have been predicated on poor earnings guidance - the result of continued economic lag in the chain's geographic base. But shares could soon be headed much higher before 2011.

>>Who Owns Winn-Dixie?: Leucadia

Winn Dixie hit a double bottom back in the beginning of November, a signal that a stock's trend is due to reverse course. Since then, Winn-Dixie has moved to just below a major resistance level, consolidating as the 50-day moving average moves in as a newfound support level.

As things stand, Winn-Dixie looks well suited for a push above resistance, which currently sits right above $7.25. If shares can make a sustained move above that level, a price target of $8 seems realistic in the short-term.

>>Also: Cramer's Retail Winners

Chilean power generation and distribution company Empresa Nacional de Electricidad ( EOC) holds generation capacity of 13,000 megawatts for customers in Chile, Brazil, Argentina, Colombia and Peru.

Even though the stock -- like many other electric utilities -- has traditionally garnered the attention of income investors, traders should be paying attention to the short-term upside potential in its share price.

At present, shares of EOC are consolidating at trend channel support. That means we're looking for a bounce higher off of the lower blue line that should signal a move back higher to the top of that trend channel. Watch support levels very closely on this trade; if shares fall below the channel, I'd suggest staying away from this stock.

>>Also: 5 Brazilian Stocks to Watch in 2011

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

Jonas Elmerraji, based out of Baltimore, 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.

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.

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