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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.
>>5 Stocks Under $10 Set to Soar
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.
>>5 Big Stock to Trade for Gains
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.
PSS World Medical
Nearest Resistance: $29
Nearest Support: $28.50
Catalyst: Acquisition News
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Topping off the list today is PSS World Medical (PSSI), a small-cap medical product distributor that announced that it would be acquired by McKesson (MCK) for $29 per share. The news boosted PSSI’s share price by close to 33% at the open this morning, giving investors who owned shares some substantial gains.
Acquisition news and big percentage moves have a way of drawing investors’ attention, but it’s important to fight the urge to jump into this name . Ater all, there’s just a 1.2% risk premium priced into PSSI after the news, and a very hard price ceiling at $29. I’d recommend staying away from shares. A123 Systems
Nearest Resistance: $0.20
Nearest Support: $0.10
Catalyst: Acquisition News
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Speaking of silver linings in very black clouds, A123 Systems (AONE) announced that Johnson Controls (JCI) would be buying its automotive battery division just a week and change after AONE filed for bankruptcy. As a result, shares are up more than 35% today on high volume on hopes that investors will be able to recover a little bit more value from the bankrupt battery developer than first through.
A123 is a lot like PSSI right now (just not quite as lucrative for investors who’ve been holding for the last few months) -- it just carries more uncertainty. I’d recommend most investors stay away from the hype today. Crocs
Nearest Resistance: $14
Nearest Support: N/A
Catalyst: Outlook Miss
While earnings have been overwhelmingly positive today, Crocs (CROX) is getting shellacked after posting poor outlook numbers to the market. As I write, shares of the shoemaker are down more than 20%. >>5 Toxic Stocks to Sell Now
It wasn’t more than a handful of years ago that Crocs was the momentum stock of the day, taking off into the stratosphere as investors extrapolated its breakneck growth into the future. But clearly, that hasn’t been the case -- and now, downside momentum is what makes Crocs stand out.
From a technical standpoint, this stock couldn’t look much weaker. Today’s move sent shares through their nearest support level at $14 (now a resistance level) to new 52-week lows in the high $12s. Until CROX can catch a bid, I wouldn’t touch it. You shouldn’t either.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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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.