Must-See Charts of the Week

BALTIMORE (Stockpickr) -- Successful debt sales in Spain and Portugal, two of the eurozone's beleaguered PIIGS countries, are sending positive signals for investors this morning, as most European indices sit in positive territory for the day. Yesterday's price action showed continued strength stateside, as solid earnings results blended with strong economic data to send the Dow 83.6 points higher for the day.

That makes this the seventh week of consecutive bullish market action that the broad market has seen -- the last time stocks moved lower on a weekly basis was back in early November. That bullishness is manifesting itself in investor sentiment readings. At present, the Consensus Bullish Sentiment index is ringing in at 72%, a number that suggests that an overwhelming number of professional analysts and advisers are bullish right now.

While that number doesn't yet indicate that the market is overbought (investor sentiment readings are often used as contrarian indicators), it is worth watching at stocks set their pace for 2011. Also worth watching are the technical outlooks for three of the biggest-name stocks on Wall Street right now.

Related: Earnings Trades: Intel, Commerce, Sealy

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.

America Movil

America Movil ( AMX) has had a fairly strong showing in the last year, resulting in a 17% gain in the stock overall. That financial success has come as a result of the firm's positioning as the leading telecom firm in Latin America -- an enviable market to be a key player in. While shares hit a bit of a ceiling back at the beginning of November, technical indicators point to a potential breakout in January.

In November, shares of America Movil hit a 52-week high of $59.63, then quickly moved lower, setting $59 as a staunch resistance level. This week, shares made a second attempt at breaking above $59 only to be rebuffed again with heavy selling in yesterday's trading session. But while resistance at $59 looks like a challenge for America Movil's shareholders right now, the truth is that a developing cup-and-handle pattern in shares could spell a breakout in the near future.

A cup-and-handle is a parabolic move that occurs when shares of a firm fail to break above a strong resistance level twice. While the cup-and-handle pattern in America Movil isn't the prettiest I've seen, it's a tradable setup nonetheless. Currently, support at the 50-day moving average should reduce some downside risk from the stock as well. I'd recommend going long if and only if shares hold above $59 on their next attempt.

America Movil is one of the top holdings of the world's richest man, Mexican billionaire Carlos Slim Helu, as well as of the Bill and Melinda Gates Foundation.

TheStreet Ratings rates America Movil a buy.


U.S. banking behemoth Citigroup ( C) has been getting a lot of attention lately -- and for good reason. Shares of the company gained nearly 3% in yesterday's trading, the result of traders' interest over the pattern forming right now as shares approach their previous highs from April.

Back in April, shares of Citigroup hit a 52-week high of just above $5 per share, a price that's a key psychological level. As of yesterday, shares surpassed that high, if only tentatively. That brings about the very real chance of a sustained breakout in one of the largest, most heavily traded stocks on Wall Street. Last week, my colleague Roberto Pedone highlighted Citigroup as one of three financial stocks with great breakout potential.

Shares are pointing higher this morning as well, a move that should be considered confirmation if shares can hold above $5.05 throughout today's trading.

Citi's earnings call next Tuesday could throw a major stick in the spokes of this breakout. For that reason, I'd recommend acting quickly if you want to take advantage of the move higher. Plan on closing out the trade ahead of the Jan. 18 earnings call unless you're willing to add substantial event risk (and potential reward) to your portfolio. Keep a tight stop on this trade.

Citigroup has attracted some high-profile shareholders lately. As of the most recent reporting period, the stock comprises 7.2% of John Paulson's portfolio and 8.4% of Bruce Berkowitz's. When the stock was still under $5, Robert Holmes recently named it one of the top stocks under $5 for 2011, a list of stocks with the most buy ratings from analysts. Jim Cramer's been a fan lately, too, flagging it one of several big bank stocks with long legs.

TheStreet Ratings rates Citigroup a sell.


The U.S. mobile phone industry has been abuzz this week following news that Apple's ( AAPL) iPhone will finally be available on Verizon's ( VZ) network. But despite the equity-moving power of that news, the revelation is doing little for Sprint Nextel's ( S) share price. Sprint has been locked in a downward channel for the last few weeks -- and the stock is showing few signs of changing that. Still, that provides traders with a nice downside trade right now.

Sprint's been trading in an incredibly predictable range since early Summer 2010, hitting its head on resistance and catching itself at support. Now, with shares within reach of resistance, traders looking for a short-biased setup could find themselves in good company.

If you decide to bet against Sprint right now, I'd strongly recommend placing a stop at around $4.70. With the bullish sentiment that's currently in the market, this trade will need to be watched carefully by those who play it.

Sprint, which makes up 2.7% of Private Capital Management's portfolio as of the latest reporting period, was also on the list of top stocks under $5 for 2011. It was one of Morningstar's five stocks that could double on fundamental improvements, and Credit Suisse included it as one of its 18 best stock picks for 2011.

TheStreet Ratings rates Sprint a sell.

-- Written by Jonas Elmerraji in Baltimore.


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

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

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