When it comes to deciding which are the best stocks to buy, many traders glom onto the big, household names – Bank of America (BAC), Facebook (FB), General Motors (GM) and the like – but that can mean they overlook some of the hidden gems in the nano- and small-cap arenas.

Every pundit and their mother has an opinion about big-name stocks, but when it comes to finding the best stocks to buy in lesser-known names, technical analysis can give you an unbiased outlook. At its core, technical analysis is really all about identifying patterns and relationships in the price and volume histories of stocks that can tell us about the attitudes of buyers and sellers.

There are hundreds of patterns within the study of technical analysis that traders can use to estimate the duration and scale of upside or downside moves; suffice to say, fully understanding technical analysis can take a lot of study.

If you’re new to technical analysis, along with using the Profit Scanner, Recognia’s Vice President of Client Services, Peter Ashton, recommends Technical Analysis of Stock Trends by Robert D. Edwards, John Magee and W.H.C. Bassetti as a great reading for anyone who wants to learn more about this topic.

Fortunately, traders have developed many systems over the years that can identify these patterns and tell you exactly how to profit from them, and the Profit Scanner powered by Recognia is one of the most powerful. While it can certainly give you insight into big-name stocks – including identifying a short-term bullish Triple Moving Average Crossover  of the 4-day, 9-day and 18-day moving averages on Google’s (GOOG) chart that occurred on Feb. 10 – where it really shines is helping traders find the best stocks to buy that might never otherwise cross your radar.

Let’s look at one such stock, small-cap Stemline Therapeutics (STML). It’s a biotech firm that specializes in therapeutics for cancer stem cells and bulk tumors. Founded in 2003, the company is lean and mean with just 12 employees, but you won’t find a single sale of shares from executives in the past two years. That’s a telling fundamental clue, but technical analysis isn’t concerned with data points like that.

Instead, technical analysis simply looks at pricing and volume history as a way of trying to determine what a stock will do in the future. And, according to the Profit Scanner, STML’s future looks bright.

On Feb. 10, when STML closed at $24.49, the Profit Scanner identified a bullish Flag in STML’s chart, which is estimated to resolve to an upside target of $34 – $36 in just 14 trading days.

It’s not unusual for biotechs to jump dramatically on positive news, which makes them some of the best stocks to buy for volatility, but haven’t you always wanted to get in before the spike? Technical analysis can signal attractive entry points before a move occurs. The short-term bullish Flag pattern tells us that a stock’s price seems to be resuming a sharp rally after taking a brief pause.

A bullish Flag pattern occurs during a dynamic market rally, representing a brief pause as the market “catches its breath” before running off again in the same direction. The pattern consists of two parallel trend lines, often sloping downward against the prevailing uptrend, and is confirmed when the price breaks through the upper boundary to resume the rise, as STML appeared to do.

As always, it’s important to note that patterns can become invalid, particularly if a stock in a bullish pattern closes below key support levels or significant price levels, such as the 200-day moving average. These pullbacks may just that – short-term pullbacks – but take the technical pattern in concert with other company news or events. And it’s a good idea to set a trailing stop loss to protect your capital.

While STML’s potential 40% move in the next few weeks is juicy, the Profit Scanner reviews an entire universe of 65,000 stocks, ETFs and currencies for bullish and bearish opportunities, so if biotechs don’t suit your trading profile, it can help you find the best stocks to buy that are more aligned with your goals.

Profit Scanner powered by Recognia can help traders of all levels find new trading customized trading opportunities for finding the best stocks to buy or short in specific sectors, price points, timeframes and so much more. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.