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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.
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 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: $20
Nearest Support: $19
Catalyst: New Lows
Facebook (FB) has been the poster child for post-IPO meltdowns, losing more than half of its value since its first print on the Nasdaq. This stock has been continually among the most actively trading issues for the past few weeks, and with shares sitting just above a 52-week low of $18.75, it’s no huge surprise why.
I’ve been no fan of Facebook’s stock. In fact, I’ve argued against buying shares since the IPO brouhaha started. But now, things are at least looking less bad for FB shareholders. The stock has been consolidating under $20 resistance for the last week or two, positioning that at least means that the selling could be abating.
If you’re desperate to buy Facebook, wait for shares to crack $20. That said, I wouldn’t touch this name with a 10-foot pole.
Nearest Resistance: $16.50
Nearest Support: $13.50
Catalyst: Earnings Miss
Computer networking firm Ciena (CIEN) is getting hammered today, down around 17% as I write after the firm reported a third quarter loss to Wall Street that underwhelmed investors. While this stock’s stellar performance in the first part of the year means that shareholders are still beating the S&P 500 in 2012, the selloff we’re seeing today isn’t a good sign.
Ciena had been making higher lows since late May, supported by an uptrend that was buoying shares higher. Today’s gap down violates that uptrend and makes even lower prices a distinct possibility in the near-term.
Support is close by at $13.50, which limits risk somewhat. If you wanted to sell CIEN, you might as well keep holding now to see if it can catch a bid at support. If $13.50 fails, I’d recommend unloading shares.
Nearest Resistance: $24.50
Nearest Support: $22.50
Catalyst: Technical Setup
Things are looking less bullish in chipmaking giant Intel (INTC) right now. The $121 billion semiconductor firm is down slightly today, facing selling pressure thanks to a bearish technical setup that’s showing up on this stock’s chart. Intel had been under pressure for the last few months, getting shoved lower alongside the rest of the chip industry. But shares broke below former support at $24.50 today, a move that points to additional downside in this stock.
With a dividend yield that’s creeping higher, it may look tempting to buy INTC now that it’s slid so much lower, but I’d recommend restraining the urge. With support a little ways away, that yield may get bigger before this stock finds a bottom.
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, 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.