Must-See Charts: Ford, Alcoa, Vodafone

BALTIMORE (Stockpickr) -- The calendar may have only just flipped over to 2011, but for hundreds of companies, one of the most crucial times of the year is just around the corner.

I'm talking about earnings season. Earnings season is the period four times a year when the majority of publicly traded companies release their earnings data to the public. As a result, it's often one of the most volatile times of the year thanks to the buying and selling frenzies that take place once investors get a handle on a company's performance.

That increased volatility across the board makes earnings season an especially good time to trade technically.

Related: Technical Setups of the Week

In case you're not familiar, technical analysis uses a stock's price movements to determine where shares are headed in the future. Technical charts are used every day by proprietary trading floors, the Street's biggest financial firms and individual investors to get an edge on the market. And according to some sources, skilled technical traders can bank gains as much as 90% of the time.

Here's this week's look at how some of the biggest names on Wall Street are trading technically.

Alcoa

The official kickoff for earnings season comes when aluminum giant Alcoa ( AA) announces its numbers to Wall Street on Jan. 10. But this firm's reputation as a bellwether for earnings isn't the reason that we're taking a look at shares right now -- instead, it's the bullish pattern that's showing itself in the stock's chart.

Shares of Alcoa have been locked in an uptrending channel for the last several months, moving higher in price but within a well-defined range. That buying accelerated on Tuesday following an analyst upgrade from Deutsche Bank, and speculation that the $17 billion aluminum producer could become an acquisition target if demand for the metal meets expectations.

But with shares trading in the middle of their trend channel right now, it's not the best time to buy. That's especially true with earnings on the horizon for Monday -- an unexpected quarterly report could break shares out of their range.

With that in mind, the best play for this stock right now is to wait for earnings. If we're able to see shares pull back to support in the short-term, a good long-side trade could be taken.

Alcoa bulls include Renaissance Technologies, which increased its position in the stock by almost 700% in the most recent reporting period, and Moore Capital, with a new position in the stock. Alcoa was one of Dan Dicker's top commodity stocks for 2011 and one of Stephanie Link's top three metal stocks. It's been on Jim Cramer's radar, too, making a list of his favorite Dow stocks for the new year.

Ford

Meanwhile, no waiting is required to trade shares of Ford ( F), the $62 billion Detroit automaker that's made considerable fundamental progress in the last several years. An upside ascending triangle breakout could mean higher share prices in the near-term.

Ford had been battling a tough resistance level just above $17, coupled with the higher lows that make this setup a textbook ascending triangle. Shares broke out on Tuesday following the release of strong December sales numbers, and traders accelerated their buying in yesterday's market session.

With a confirmed breakout in play for this auto giant right now, Ford could be presenting an excellent swing trade opportunity to start 2011. I'd recommend placing a stop right below $17.

Ford is a top holding of Ken Heebner at Capital Growth Management, making up 12.2% of the total portfolio as of the most recent reporting period, as well as D.E. Shaw, which increased its position in the stock by 660.2%. Cramer was bullish on Ford in a recent "Mad Money" episode, saying it could become the No. 1 automaker in the world, and it was one of Morgan Stanley's eight best stock ideas for 2011.

Vodafone

Vodafone ( VOD) has been a frequent guest on our weekly Must-See Charts list in the last few months. That's thanks in large part to the potentially actionable technicals that this mobile communication behemoth has been sporting. Now, though, with a major change since we last visited this stock, it's time for an update.

In late December, shares of Vodafone had been exhibiting a nascent bearish head-and-shoulders pattern that looked to send shares considerably lower. But the head and shoulders never triggered -- instead, VOD rallied to end the year and has continued to show a bullish bent in early 2011.

Now shares are trading in a tight consolidation channel and could potentially post new 52-week highs in the short-term. To do that, traders will want to see Vodafone regroup in its newfound consolidation channel, and bleed off some overbought momentum. Wait for a break above the channel before going long.

Major holders of Vodafone include Mason Hawkins at Southeastern Asset Management.

To see this week's trades in action, check out the High Volume Technicals portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author was long Ford calls.

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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