Given the market's recent weakness, it has become an increasingly difficult task to find stocks that are positioned to make a move higher. As many of you know, it can be hard to feel confident about a certain entry level when the market is in a slump. The trick is to only take a position in a stock that is near an established level of support, to minimize the risk of taking a major loss. This is undoubtedly easier said than done, but let's examine three companies that are nearing support levels and could be candidates for some short-term buying pressure.

VeriSign Inc. (Nasdaq:VRSN) - Taking a look at the daily chart of VRSN, you'll notice that it has been pushed dramatically lower since the beginning of the week. The recent weakness may cause many traders to remain on the sidelines, but for others, it could provide an interesting buying opportunity. As you can see from the chart below, which includes the Relative Strength Index, the RSI crossed above the 30 level today. In general, readings below 30 suggest that the stock is oversold and a cross above this level is often used as a buy sign. The nearby trendline strengthens the RSI buy signal because it has been able to prevent the stock from being pushed lower in the past. Many bullish traders will likely protect themselves from further weakness by setting a stop-loss order below the nearby support level because it offers an interesting risk/reward ratio.

Carrizo Oil & Gas Inc. (Nasdaq:CRZO) - CRZO is another company that is nearing an influential level of support. As you can see from the chart below, the 200-day moving average (pink line) has been able to prop up the price since early 2007. This chart is a good example of how a move toward a level of support can provide a series of strategic entry levels for technical traders. We've also added the RSI to this chart because the current reading of 28.21 suggests that the stock is oversold and that it could be setting up for another move higher like it has done in the past (shown by the black arrows).

Research In Motion Ltd. (Nasdaq:RIMM) - Taking a look at the daily chart of RIMM, you'll notice that it looks eerily similar to that of CRZO. Notice how the price has moved lower over the past couple of weeks, but has failed to drop below the support of its 200-day moving average (pink line). Some technical traders will use the recent weakness as an opportunity to take a position. These traders will watch for the stock to bounce off the support like it has done in the past (shown by the black arrows). It wouldn't be surprising to see these traders protect their positions by setting stop losses below the nearby moving average because a close below this level will suggest that the trend has reversed and that the longer-term direction will be lower.

Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.