Scotts Miracle-Gro

Turning stateside, we have Scotts Miracle-Gro ( SMG). Following another strong rally that sent shares of Scotts up more than 15% in the last six months, this stock hit its head on $54 resistance and reversed down to support at $49. But sitting at that support level didn't last for long, and soon shares were retesting resistance once again.

Now, with a sort of bizarre cup and handle forming in shares of Scotts, traders will want to watch for this third test of resistance.

A few factors bode well for a new test of resistance in Scotts. First is the series of higher lows that form the "handle" in shares. Then there's the added support at the 50-day moving average, presently around $51. Even so, I wouldn't suggest going long until shares actually sustain a break above $54. Until then, Scotts could just as easily fail at resistance for a third time.

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 MSNBC.com.

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