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3 Big Stocks on Traders' Radars - views
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: $28
Nearest Support: $23
Catalyst: Selling Canadian Business
Grocery chain Safeway (SWY) is up more than 7% this afternoon after announcing that it was selling its Canadian operations to Sobey's for CAD$5.8 billion. The news unlocks considerable value from Safeway's business considering the fact that even post-sale the firm's market cap is just $5.97 billion. The firm expects to net CAD$4 billion after fees and taxes, returning all of it to shareholders in the form debt extinguishment and share buybacks.
Looking at SWY's chart, the stock has been consolidating for the last month and a half, trading sideways after rallying for the first part of the year. While today's price action stood a chance of triggering a bullish double-bottom pattern in the near-term, shares have been fading since the morning's high open.
I'd recommend waiting for SWY to establish some semblance of support before becoming a buyer.
Nearest Resistance: $13.50
Nearest Support: $12.50
Catalyst: Buyout Offer Hiccups
Elan (ELN) is off more than 2.5% today, reacting to investors' realization that the firm's buyout offer from Royalty Pharma could come under attack from a lack of shareholder support. Elan's board rejected Royalty's $7.9 billion buyout bid, a deal that could only be compelled by shareholders. That's the third offer that's been put forward by Royalty. At this point, Elan's suitor can either raise its bid to match the board's expectations, or it can bow out. Today's dip signals investors' concerns over the latter.
Technically, Elan is filling the gap that it made after Royalty's latest revised offer popped shares higher. The offer price of $13.50 looks like a pretty hard resistance level for the time being, and $12.50 looks like decent place for support at least in the short-term. Because of the huge amount of headline risk in ELN, I'd advise against thinking that this stock is a high probability trade. Instead, it's more like a low-payout lottery ticket -- speculators only at this point.
Nearest Resistance: $35.75
Nearest Support: $34.50
Catalyst: Xbox One Chatter
Microsoft (MSFT) is no stranger to heavy trading volume, but it's catching more than its fair share this week thanks to plentiful headlines covering the firm's newly announced Xbox One console. By and large, they're not good headlines. The new Xbox offering is going head-to-head against Sony's (SNE) PlayStation 4, a gaming console that costs $100 less and sports far fewer restrictions than the new Xbox. As Microsoft continues to draw the ire of gamers, investors are getting worried.
The good news is that gaming systems make up a comparatively tiny chunk of MSFT's revenues. So shares of the Redmond, Washington-based tech firm aren't exactly getting shellacked right now. Instead, MSFT is consolidating in a rectangle that's seeing resistance at $35.75 and support down at $34.50.
I'd recommend being a buyer on a move above resistance -- just keep a tight stop in place.
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.
Follow Jonas on Twitter @JonasElmerraji