BALTIMORE ( Stockpickr) -- Earnings season is drawing to a close - that should help to yank some of the headline risk out of the stock market for the next month or two. And it's setting the stage for upside for the rest of the summer. Over the course of this rally, earnings seasons have been a chance for the market to hold its breath. That's not hugely surprising; after all, this has been one of the most-hated equity rallies in history, so it makes sense that investors have braced for a smack-down each quarter during earnings. >>5 Big Stocks to Trade Now Thing is, it hasn't happened. So as the broad market fuels up for another big move, it makes sense to take a technical look at the breakout trades forming in five of the biggest names on Wall Street. These are five must-see charts. If you're new to technical analysis, here's the executive summary. Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time. >>5 Rocket Stocks to Buy Before They Blast Off Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.
SPDR S&P 500 ETF
Green Mountain Coffee RoastersLast up is Green Mountain Coffee Roasters ( GMCR), a stock that I wrote about yesterday as a potential short squeeze name. Besides the hefty shorting in GMCR (the short interest ratio sits at 11.4), this stock is also showing some technical strength right now, a combo that could magnify this stock's upside potential in the near-term. >>5 Stocks With Big Insider Buying GMCR has been forming an inverse head and shoulders pattern, a setup that's formed by two swing lows that bottom out at approximately the same price level (the shoulders), separated by a deeper swing low (the head). Typically, inverse head and shoulders patterns show up at the bottom of a stock's recent price action -- not the case here. Instead, GMCR's setup is showing up at the top of its recent price action. But as I mentioned, whether or not the pattern is "textbook" matters a whole lot less than the supply and demand forces causing it. Either way, the trading implications look good in GMCR right now. The buy signal for Green Mountain comes on a breakout above its neckline at $82.50. When that level gets taken out, this stock becomes a high probability trade. From a risk-management standpoint, it makes sense to keep a protective stop just below the right shoulder. To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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