Stock Trading Methods: 5 Big Stocks to Trade for Big Gains

BALTIMORE (Stockpickr) -- Feeling anxious about this market? You're not alone. U.S. equity markets stumbled yesterday, highlighting the nervous nature of investors as we kick off April trading. The big market averages ended the first quarter barely above breakeven, capping off the worst inaugural quarter for stock performance since the financial crisis. No, that's not a particularly compelling stat for investors who are thinking about buying stocks here near all-time highs. But it also doesn't tell the whole story. Must Read: Warren Buffett's Top 10 Stock Buys For example, it doesn't highlight the fact that nearly one in five S&P 500 components is actually up double-digits year-to-date. The averages may not look all that welcoming, but a big chunk of the broad market is generating meaningful returns right now. You've just got to know where to look. To do that, we're turning to the charts for a technical look at five big-name stocks to trade for gains. 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… Must Read: 10 Stocks Carl Icahn Is Buying Accenture Up first is Accenture , the $62 billion consulting firm. Accenture has enjoyed a pretty stellar run over the course of the last six months, rallying more than 17% while the rest of the market was barely breaking 5%. And just last week, shares broke out above a key resistance level at $92. But don't worry if you've missed that move. ACN looks ready to kick off a second leg higher from here. Accenture had been forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance above shares (in this case at our $92 level), and uptrending support to the downside. The buy signal came with last week's $92 breakout, but late-to-the-game traders are getting a second chance at a low-risk entry in ACN thanks to a throwback. A throwback happens when a stock breaks out, and then moves back down to test newfound support at that former price ceiling level -- in this case at $92. And while throwbacks look ominous, they’re actually constructive for stock prices because they re-verify the stock’s ability to catch a bid at support. For that reason, it’s best to think of a throwback as a buying opportunity in ACN, not a red flag. From a risk/reward standpoint, the optimal time to buy comes on the next bounce off of our price floor. Must Read: 10 Stocks Billionaire John Paulson Loves Nippon Telegraph & Telephone Japanese telco Nippon Telegraph & Telephone is another stock that's been in rally-mode lately. Since the calendar flipped to January, this $70 billion communications stock has rallied 20% -- a fact that's more indicative of the overall Japanese equity market in 2015 than of NTT's internal factors. And that rally could be about to continue here thanks to another ascending triangle pattern. The breakout buy signal comes on a move above $31.75. Why all of that significance at that $31.75 level? It all comes down to buyers and sellers. Price patterns, like this ascending triangle pattern in NTT, are a good quick way to identify what's going on in the price action, but they're not the actual reason a stock is tradable. Instead, the "why" comes down to basic supply and demand for NTT's stock. The $31.75 resistance level is a price where there has been an excess of supply of shares; in other words, it's a spot where sellers have previously been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $31.75 so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level. Wait for shares to catch a bid above $31.75 before you buy NTT. Must Read: Warren Buffett's Top 10 Dividend Stocks Home Depot Home Depot investors are feeling pretty good right now. In the last 12 months, this gigantic home improvement retailer has added 43.7% to its market valuation -- and almost 8% of that has come in 2015 alone. More recently, though, shares have cooled off. In fact, since the last week of February, this big retail stock has been churning sideways in a tight range. The thing is, that sideways consolidation isn't muddling the technical signals in HD right now; instead, it's the whole reason that this stock looks tradable. The sideways action in HD is called a "rectangle" pattern. The rectangle pattern gets its name because the pattern basically boxes-in shares between a pair of parallel support and resistance lines. For HD, the levels to watch are resistance up at $117.50 and support at $112. Rectangles are "if/then patterns," so it pays to be reactionary with this price chart. Put a different way, if Home Depot breaks out through resistance at $117.50, then traders have a buy signal. Otherwise, if the stock violates support at $112, then the high-probability trade is a sell. Since this stock's price action leading up to the rectangle was an uptrend, it favors breaking out above $117.50. The 50-day moving average has been a good proxy for support on the way up. That makes it a logical place to park a protective stop after HD breaks out. Must Read: 10 New Stocks Billionaire David Einhorn Loves Toyota Motor Let's go back to Japan for a minute -- more specifically to Toyota Motor , the massive $240 billion automaker that trades as an American Depositary Receipt here on the NYSE. It's not hard to see why Toyota has looked so attractive lately. You don't need to be an expert technical trader to figure out that this stock has been in a very well-defined uptrend since last October. The most important line on Toyota's chart is trend line support, which connects each of the swing lows in TM's price. Each of those lows has provided a low-risk high-reward buying opportunity for investors looking to build a position in TM, and so now, as shares test that support level for a sixth time since this past fall, it makes sense to buy the next bounce higher. Relative strength is the side-indicator to watch in shares of TM right now. Our relative strength line has been in an uptrend of its own during that same time, an indication that Toyota isn't just moving up, it's also outperforming the broad market. As long as that uptrend in relative strength remains intact, TM should keep beating the S&P. Must Read: 10 Stocks George Soros Is Buying Walgreens Boots Alliance Here at home, the health care sector has been a pocket of spectacular relative strength in 2015. A perfect example of that is drugstore chain Walgreens Boots Alliance . Like Toyota, WBA has been bouncing its way higher in a well-defined uptrending channel since last fall. The channel in WBA is formed by a pair of parallel trend lines that identify the high-probability range for shares to stay stuck within. We're testing support for an eighth time this week. Investors should wait for a bounce, then buy WBA. Waiting for that bounce is important for two key reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring WBA can actually still catch a bid along that line before you put your money on shares. Must Read: 10 Stocks George Soros Is Buying

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