While many economic pundits trip over each other’s heels in an attempt to accurately read the market’s signals, I’m about to show you how to make a quick buck and have fun doing it.

Okay, so I can’t literally guarantee that you’ll come out with stellar returns on the play I’ve zeroed in on, but I can promise that in the current choppy market waters, this one have the technical DNA of a champion over the next several days or so.

Sherwin Williams (SHW:NYSE) has been on a steady upward trajectory over the past week or so. Today’s pullback is only natural, given that the overall markets are struggling under the unimpressive leadership of a Bank of America 77% profit plunge.

But if we were to zoom in on 5-day, 15-minute chart of Sherwin, you’d notice an all too familiar setup developing. During this period we’ve seen two rallies and two slightly downtrending consolidation phases. While both the bulls and bears have racked up two wins in their respective columns, it’s the bullish crowd who seems to be scoring the more impressive gains, taking the stock from around $53 to where it currently sits near $55.48. That’s a net price gain of $2.80… and it appears that gap will widen further.

Let me explain….

In the chart below we have three specific buy points, all marked by a green dot at the end of a pointer on the MACD technical indicator below the plotted price. Without getting into too much technical garble, I will tell you that anytime you see the blue line cross above the red, you should consider it a time to buy. The reverse holds true as well with regards to a sell signal.

Advertise here.

If you pan up on the chart, you’ll also see that I have drawn two lines of resistance. These are areas where the stock tends to continually be battered down. Once this line is broken, you can expect a good rally to unfold. The one exception being the spike to $57, which resulted in a quick collapse back below the line. This was somewhat predictable when you consider the fact that $55.60 barrier that was broken previously was never even tested.

Now that we have tested major support and gained much needed momentum, you can be sure that over the next few days or so, this stock will likely climb into the $56.50-$58.50 range. Once again, we’ll head back to the MACD indicator below to find out why.

Notice how every time the indicator scrubs the bottom of its range and finally begins to work its way back up, the stock gets bullish? We’re once again at that point of being extremely oversold.

I’m also seeing the same developments occur with the Dow Jones Industrial Average. The stars are aligning on all fronts…there’s only so many hours left before the jump occurs. If you decide to take the plunge, be sure to place a protective stop loss near $55.30.

Be sure to drop us a line after you take those quick profits to the bank

Good investing,
Stephen