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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.
Nearest Resistance: N/A
Nearest Support: $27
Catalyst: Earnings Beat
Shares of financial services firm Morgan Stanley (MS) are getting bid 5% higher this afternoon, following a 42% rise in profits for the second quarter of 2013. While analysts were already expecting a marked improvement in Morgan Stanley's numbers, the results actually surpassed expectations, with profits coming in at 45.2 cents per share. That's sending MS to new highs today.
Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. Investors who aren't risk-averse can consider putting on a position here.
Nearest Resistance: $19.50
Nearest Support: $16
Catalyst: Preliminary Results
Even though WhiteWave Foods (WWAV) priced a share offering this morning, the dilution isn't phasing investors today. Shares of the organic milk manufacturer are enjoying more upside on the heels of preliminary numbers announced earlier this week. Even though WWAV isn't slated to discuss the details of its financial results until Aug. 9, a sneak peek at numbers on Monday showed a double-digit boost in net income for the quarter.
I wouldn't necessarily call that a buy signal, though. WWAV has been trading in a wide range for most of 2013, and the spread between resistance at $19.50 and support at $16 is wide enough to be worried about downside from here. Shares are coming up on a key price ceiling right now -- so despite recent strength, now's not the time to build a position.
Nearest Resistance: N/A
Nearest Support: $7
Catalyst: Earnings Beat
Finally, it's a good day for shareholders of small-cap grocery chain Supervalu (SVU). Shares of the company are up more than 16% on high volume today, after posting a big earnings beat.
Wall Street analysts had been expecting to see earnings per share of 3.7 cents in this morning's cal. Instead, SVU delivered a full 14 cents. That positive sentiment is sending shares to a new 52-week high in this afternoon's session, putting this stock in year-to-date gains of more than 217%.
With no resistance levels in sight, traders should expect more upside in the near-term.
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