BALTIMORE ( Stockpickr) -- Considerable overnight action in Europe is pointing toward a volatile day Tuesday following news that Japan's expanding its euro holdings by buying EU debt.

Specifically, Japan plans on buying 100 billion yen worth of bonds from the European Financial Stability Facility (EFSF), a purchase that rings in at around 20% of the total issue. The announcement did a good job of boosting the euro overnight -- that's because the EFSF debt is being used to provide emergency loans to the PIIGS countries.

Portugal, which is set to auction 1.25 billion euros of its own debt this week, added to the news mix after its own central bank announced that it'd be willing to seek external support. Ultimately, both of these actions should do a good job of calming at least some of the anxieties that have lingered over the markets since spring 2010.

To play into the upswing in sentiment, we'll take a look at three new technical setups this week.

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Remember, 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.

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

Crown Holdings

The last year has been kind to Crown Holdings ( CCK), a $5.3 billion consumer packaging firm. Shares of the company's stock are up nearly 27% thanks to a series of strong quarters and exposure to some of the most attractive markets in the world. Now, with shares sitting right around their 52-week high, this stock still has legs to move higher.

That's because of the pattern that shares were able to maintain during their ascent. Since early summer, Crown Holdings has been locked in an uptrending channel that's clearly bounded the stock's action. And with shares sitting right at trend channel support right now, Janaury 2011 could be a perfect time to buy for a short-term rise in shares.

When trading a trend channel setup at support, the key is to wait for a bounce before going long. That means that we'll need to see a solid white bar at support before it makes sense to buy shares -- that white bar could very well happen today. If you do decide to take on this play, I'd strongly suggest keeping a stop right below $33.


In the same way that Crown has been trading within a predictable channel, shares of health insurer Amerigroup ( AGP) have had a similar uptrending resistance level that's acted as an upside barrier when shares attempted to rally in 2010. But things have changed -- and now a series of analyst upgrades have spurred a rally in shares. That rally is causing a breakout in AGP right now.

Shares broke above trend line resistance in yesterday's trading, a level that held up by the close. If shares can provide confirmation of a sustained move above resistance in today's trading, that breakout looks to be a strong signal that higher ground is in store for shares of Amerigroup.

With the strong push this stock has taken lately, I'd expect some consolidation right around that trend line in the short-term. The key to watch is going to be whether shares can hold up above that level while they consolidate and bleed off overbought momentum. Smart traders will wait for a second leg higher off of the trend line before buying.

Amerigroup is a top holding of the T. Rowe Price New Horizons Fund (PRNHX), along with FactSet Research ( FDS) and Panera ( PNRA). With an A- buy rating, it's one of TheStreet Ratings' top-rated health care provider stocks.

Lockheed Martin

Defense contracting giant Lockheed Martin ( LMT) made it above a critical resistance level late in last week's trading, a move that's spiked the volume significantly on this already popular issue. Now, with shares approaching a retest of another staunch upside barrier at $75, it'll be interesting to see whether the stock can break above that price.

Until it does, however, I wouldn't recommend buying shares. That's because now, with Lockheed's current pricing sitting in between two key levels (resistance to the upside and S1, the nearest support level, below), shares could easily churn in that range for the foreseeable future without any predictability.

Remember, as a trader, you're looking for high-percentage moves -- that is, setups that suggest repeatable, predictable price action. In the case of Lockheed right now, the best high-percentage setup is a buy on a sustained break above $75. If it happens, keep a stop below S2 to protect against this trade going against you.

Holders of Lockheed include Renaissance Technologies, which increased it's position in the stock by 1,617.5% in the most recent reporting period, and Tiger Global Management, at 2.8% of the total portfolio.

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 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