BALTIMORE (Stockpickr) -- The big stock indices hit a new all-time high water mark on Wednesday, tacking another handful of basis points onto the S&P 500 and the Dow before the books close for 2014. But the performance we're seeing from the indices isn't the same as the performance we're seeing in the individual stocks.
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Only 93 S&P 500 components made new 52-week highs yesterday, which means that the bullish price action in the S&P is being propelled by just 20% of its component stocks. That's consistent with the story all year long. Despite a double-digit rally in the S&P 500 index, nearly a third of the individual names that make up the index are actually down on the year. The gains in the S&P are being driven by a handful of big, prominent stocks.
The key takeaway is this: Stock selection still matters quite a bit right now.
And with bullish price action creeping into some of the biggest names on Wall Street this week, it's time to turn to the charts to figure out which names to trade.
First, a little on the technical toolbox we're using here. 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.
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 big stocks to trade this week.
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