BALTIMORE (Stockpickr) Stocks bounced big on Wednesday. The Nasdaq Composite managed to clear the 1% mark before the closing bell rang to end the session. The S&P 500 and the Dow Jones Industrial Average managed to climb a little more than half that. Put simply, it was a good day to be long.
But don't get drawn into the rhetoric. Yesterday's price action wasn't because of corporate earnings or the Fed or even the political world. Instead, the bounce was 100% technical. And that move is setting the stage for a lot more upside in August.
Just a week ago, stocks were in correction mode, and the S&P was closing in on its downside objective. So it shouldn't come as much of a surprise that the big index bounced hard when it hit long-term support. That's the exact same thing that's happened on every test of support?utm_source=inlinetst&utm_medium=cpc&utm_campaign=inlinetst" target="_blank">that support level over the last two years.
Even better, it's setting the stage for even bigger move in some of Wall Street's biggest names. Today, we're taking a technical look at five of them.
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.