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BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It’s time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It’s a concept that’s known as “crowdsourcing,” and it uses the masses to identify emerging trends in the market.
Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.
While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis.
Today, we’ll leverage the power of the crowd to take a look at some of the most active stocks on the market today.
These “most active” names are the most heavily-traded names on the market – and often, uber-active names have some sort of a technical or fundamental catalyst driving investors’ attention on shares. That’s especially true now that earnings season is underway. And when there’s a big catalyst, there’s often a trading opportunity.
Without further ado, here’s a look at today's stocks.
Bank of America
Nearest Resistance: $10
Nearest Support: $8.25
Catalyst: Technical Setup
Bank of America (BAC) is one of those names that’s perennially one of the most heavily-traded stocks on the market. But today, shares have an extra catalyst that’s driving price action -- and investors should be paying attention.
Right now, BAC is making a double bottom, a technical reversal pattern that’s formed by two swing lows that occur around the same price level. The buy signal comes when BAC breaks out above the peak separating those two troughs -- and BofA managed to push above that $8.25 level for the past three days.
Shares have since been consolidating right around that level, making BAC a buyable name. With shares well below the next glut of selling pressure at $10, traders should have a lot more room to run in the next month.
Nearest Resistance: $8.25
Nearest Support: $7.75
Catalyst: Asset Sale Plan
Shares of cement manufacturer Cemex (CX) got pushed higher yesterday following news that the firm would be selling a minority stake in the firms Latin American assets outside of Mexico. Even though shares are giving back a bit today, they’re still seeing considerable trading volume.
Cemex has been in a strong uptrend since the start of the summer, climbing more than 50% since the start of June. News of the asset sale pushed the stock to new 52-week highs, only to settle shares just below resistance at $8.25. With resistance nearby and support further down, it makes sense to wait for $8.25 to get successfully taken out before entering a position in this stock. That could happen sooner than later.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
At the time of publication, author had no positions in stocks mentioned.
Jonas Elmerraji, based out of Baltimore, is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.