Frontier Communications

Finally, let's take a look at mid-cap communications firm Frontier Communications ( FTR), a stock that's forming a textbook example of a classic technical pattern. Right now, Frontier is forming a double bottom, a setup that's identified by two swing lows that occur around the same level following a downtrend.

Those two bottoms tell us that there's a glut of demand for shares of Frontier below the $4 mark.

The buy signal for Frontier comes on a push above resistance at $4.70. At that point, Frontier's downtrend is broken, and the high probability trade turns to the bulls' side. Besides the appearance of this pattern, there are a couple of other factors that make this setup a textbook double bottom: first, volume has been declining throughout the pattern - while that sounds like a negative, it actually lends confirmation to the pattern.

On the breakout, we'll want to see volume spike as more buyers participate in the move. The other factor is momentum -- RSI has been uptrending since the first bottom in shares back in February. That provides bullish confirmation of a move higher in April...

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 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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