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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 Blue-Chip Stocks to Beat the S&P 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: $34.25
Nearest Support: $32.60
>>5 Big Stocks to Trade This Earnings Season First up is “sin stock” giant Altria (MO), the firm behind cigarette brands like Marlboro here in the U.S. as well as an active portfolio of wine properties. With a market capitalization of nearly $67 billion, there’s no doubt that Altria is a big name -- but the firm’s announcement that it’ third-quarter earnings webcast is slated for Oct. 25 is spurring bigger volume than usual this afternoon. Since earnings are such a high-risk event, it’s not uncommon for traders and investors to shed positions ahead of an earnings call. That’s what we’re seeing now.
At this point, selling Altria might not be such a bad idea. The firm topped out in late July, and it’s been trending lower since. For most of September, shares consolidated sideways in a rectangle, but they’re testing a breakdown below support at $32.60 right now. A move below that level makes more downside likely. Buyer beware. Ford Motor
Nearest Resistance: $10.25
Nearest Support: $9.75
Catalyst: Dividend Announcement, China Success
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Ford Motor (F) is up more than 2% this afternoon following news that the firm grew its sales in China by 35% this September vs. last, breakneck growth for a market that’s been slowly becoming more and more strategically important for the firm. Ford’s 5-cent fourth quarter dividend was another factor that’s reinvigorating investors and spiking volume in shares of the Detroit automaker. At current price levels, that payout works out to a nearly 2% yield.
Ford’s price action is significant right now -- it’s another name that’s floundered for much of 2012, not participating in the broad rally that most stocks have seen since June. But a breakout above $10.75 would complete a bottom for Ford, solidifying the uptrend that’s been in force since early August. More immediately, $10.25 is a breakout level to watch for a near-term trade. For investors looking to buy Ford, I’d recommend building a position on a move above $10.25, then going full-size if shares push through $10.75. J.C. Penney
Nearest Resistance: $29
Nearest Support: $23.50
Catalyst: New Store Concept Attention
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Finally, department store retailer J.C. Penney (JCP) is getting plenty of buying attention today following increased media coverage of the firm’s new store-within-a-store concept. With investors growing impatient over a turnaround, shares of JCP have been under downward pressure for much of 2012, but the first trickles of good news surrounding the new stores could help buy management more time to pull off their big moves. Shares are up around 7.5% today on high volume as I write.
J.C. Penney is looking attractive from a technical standpoint too. While the stock started pulling back in September, it’s been forming a rounding bottom for the past couple of weeks. Even though today’s move higher is dramatic, shares are still a whole lot closer to support at $23.50 than they are to the next-closes resistance level at $29. With plenty of room to run until shares hit selling pressure again, I’d recommend being a buyer here as long as you’ve got 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.
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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.