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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 officially 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.
Nearest Resistance: $18
Nearest Support: $17
Catalyst: Technical Setup
Vale (VALE) is seeing some strong volume of its own today, as traders watch closely for Vale to test a critical support level at $17. Shares of the $87 billion metal mining stock have been slammed since the start of the new year, and today’s price action is threatening sending the stock even lower. $17 has acted as a strong price floor for VALE over the course of the last six months, but if shares push below it, traders have a signal that this stock can’t catch a bid anymore.
If that happens, we’ve got a definitive sell (or short) signal for VALE.
Cliffs Natural Resources
Nearest Resistance: $22
Nearest Support: N/A
Catalyst: Analyst Downgrade
Another mining company, Cliffs Natural Resources (CLF), is getting sold off today as well. The mid-cap iron ore and coal producer is down around 6% after Goldman Sachs changed its rating on the firm to “sell.” After the beating that the basic materials sector has taken in the last few months, many sellers were looking for any excuse to get out of a stock like CLF -- Goldman’s analyst rating was as good an excuse as any. Worse, sell ratings are rare enough on Wall Street to justify an exodus when a stock gets downgraded that hard.
The move is pushing CLF to new 52-week lows today. If you still own this stock, it’s worth reconsidering. This downtrend isn’t slowing down.
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, 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.