China Southern Airlines

Last up is China Southern Airlines ( ZNH), a Gangzhou-based airline that carried more than 11 million passengers last year. Shares of ZNH have been trading in a triangle of a different sort for the past few months: a symmetrical triangle.

Unlike the ascending triangles in LFC and YZC, a symmetrical triangle is a setup that's formed by trendlines that are converging at approximately the same rate. The trading strategy is essentially the same as they'd be in an if/then setup. You want to be a buyer if shares breakout above trend line resistance, or a seller if they break down below trend line support.

A symmetrical triangle is unique because it shows us that there's a volatility squeeze taking shape in shares of ZNH. Because volatility is cyclical, moving from periods of high volatility to periods of low volatility, the implication is that a break outside of ZNH's channel will come in the form of a sizable move. That's why it's crucial to keep a close eye on shares now. When the breakout does happen, the 50-day moving average is a strong place for a protective stop.

To see these plays in action, check out the Technical Setups for the Week portfolio at 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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