Stock Quotes in this Article: BAC, CNI, TM, WFC, XOM

BALTIMORE (Stockpickr) -- Never confuse genius with a bull market. Oh, sure.

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With the S&P 500 testing out new highs lately, that old nugget of wisdom has been popping up more and more. Everybody looks like Warren Buffett or Jim Simons when the market's going up, right? Wrong.

The thing is, stock market participation is at a generational low right now, and lots of investors have been left out of 2013's rally. And plenty of professional investors have managed to trade their way out of the upside in stocks, building equity exposure late in the game and then exiting their stock positions in late June when the market corrected. That makes it a little harder to shrug off performance for investors who've been hanging on all the way up.

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But stocks are moving up. And with the S&P now clear of 1,700, there are still considerable trading opportunities popping up this summer. Today, we'll take a technical look atfive 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.

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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.

Toyota Motors

2013 has been a good year for Toyota Motors (TM) year-to-date, the Japanese auto giant has rallied more that 44%, buoyed by an international car market that's been on fire. But Toyota could be due for some bigger gains this summer thanks to a bullish price setup in shares.

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Toyota is currently forming an ascending triangle pattern, a setup formed by horizontal resistance to the upside at $130, and uptrending support below shares. Basically, as TM bounces in between those two technical levels, it's getting squeezed closer and closer to a breakout above $130. When that happens, we've got a buy signal in this stock.

The 50-day moving average has been a pretty good proxy for support over the course of this pattern. After the breakout happens, the 50-day is where I'd recommend parking a protective stop.

Wells Fargo

Investors are getting a second chance for a low-risk entry in shares of Wells Fargo (WFC). Wells has been in a well-defined uptrend for the better part of the year, bouncing in between trendline support and resistance that had been in place since November -- until last month, that is.

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That's when Wells Fargo broke out above its trendline resistance level, triggering a buy signal in shares.

Wells' breakout is a big signal for traders, indicating that buyers have gotten eager enough to take on shares that they've overwhelmed the gains-taking that's consistently acted like a price ceiling all the way up. But now a throwback in this stock is giving traders a second chance at a low-risk entry.

A throwback happens when a stock moves back down to test newfound support at its former breakout level -- in this case at $44. 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.

Now looks like a good time to build a position in WFC -- just keep a tight stop.

Bank of America

All of the same can be said for Bank of America (BAC) -- that's because the $160 billion banking stock is showing traders the exact same pattern right now. That shouldn't come as a huge surprise. BofA and Wells Fargo operate in the same business, so it makes sense that they correlate highly with one another; what's more surprising is just how strongly they correlate right now.

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Like Wells, BofA broke out above its uptrend last month, and also like Wells, Bank of America is throwing back to retest newfound support. BAC's uptrend wasn't as longstanding as the one in WFC, but that doesn't really change the trading implications here: it still makes sense to build a position with a stop in place.

Momentum adds some extra confirmation to BAC that Wells doesn't have. 14-day RSI pushed into overbought mode on the breakout, a sign that this move has strength behind it. That's right -- "overbought" momentum can actually be a good thing. Looking back statistically, stocks that go overbought tend to go higher in the short-term, not correct. That's worth keeping in mind if you're watching BofA this week.

Canadian National Railway

Large-cap railroad stock Canadian National Railway (CNI) is getting close to a breakout of its own. The $42 billion Quebec-based firm has been trading sideways in a wide-ranging rectangle pattern since mid-February, bouncing in between resistance at $102 and support down at $94.

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Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles, rectangles and other price pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That resistance line at $102, for example, is a price where there's an excess of supply of shares; in other words, it's a place where sellers have been more eager to take recent gains and sell their shares than buyers have been to buy. That's what makes the move above it so significant -- a breakout indicates that buyers are finally strong enough to absorb all of the excess supply above that price level.

Wait for that signal to happen before you jump into this stock. It's already close.

Exxon Mobil

Last up is Exxon Mobil (XOM), the $400 billion oil and gas supermajor. Luckily, you don't need to be an expert technical analyst to figure out what's been going on lately in XOM .Shares are headed up and to the right. It's an uptrend.

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XOM has been trading higher in an uptrending channel since the middle of April. And while that trend channel is still relatively new, it's been well defined by tests on both sides -- that's what makes it tradable. I'd recommend buying XOM on its next bounce off of trendline support.

Buying off a support bounce makes sense for two big 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). The energy sector has been trailing the broad market for the last few months, but now it looks like it's playing catch-up. XOM is one of the best-positioned ways to trade the trend.

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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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

 

Follow Jonas on Twitter @JonasElmerraji