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3 Hot Stocks to Trade (or Not) - 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.
Sirius XM Radio
Nearest Resistance: $3.40
Nearest Support: $3.20
Catalyst: Technical Setup
Satellite radio operator Sirius XM Radio (SIRI) is down just shy of 2%, driven lower on high trading volume by a bearish technical setup. Sirius XM has had a major about-face in the last two months, going from rallying hard in May to correcting just as hard in June. The rounding top pattern put into shares at the end of last month triggered a few weeks ago, and shares have been making an orderly descent ever since. I think it's early to try to build a position in SIRI right now.
Wait for the downtrend resistance line to get broken before jumping in.
Nearest Resistance: $43
Nearest Support: $40
Catalyst: Dividend Hike
Retail REIT Realty Income (O) didn't just start selling off this week. Shares of the large landlord have been getting shellacked since the middle of May, when a downgrade from Goldman Sachs sparked selling. For income-seekers, one positive outcome from that is a higher dividend yield, currently at 5% for Realty Income. And with today's dividend announcement, that yield is continuing to increase.
Realty Income announced yesterday that it was hiking its monthly dividend payout from 18 cents to 18.15 cents. The shareholder pay raise is small, but coupled with the huge drop in shares over the last month, this stock's yield has become massive. I'd suggest waiting to build a position from here we're still a little way off from $40 support.
Nearest Resistance: $10.25
Nearest Support: $9.75
Catalyst: Latin America Proxy
Newsflash: Unlike the recent weakness in the S&P 500, emerging-market stocks have been getting hammered for pretty much all of 2013. That's showing through in Mexican cement maker Cemex (CX) as it tests key support today. Cemex made a major swing in today's session, cracking all the way down to test key support at $9. Since then, it's rebounded back up to shorter-term support at $9.75 if shares can hold that level until the close today, Monday may be a good time to jump into CX as a short-term buy.
Longer-term, resistance has been constraining CX to lower highs. Until that resistance line gets broken, I'd only recommend more experienced traders take a position in this stock.
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
Follow Jonas on Twitter @JonasElmerraji