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4 Big Stocks to Trade (or Not) - views
-- 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
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
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
Without further ado, here’s a look at today's stocks.
Nearest Resistance: $5.50
Nearest Support: $3.75
Catalyst: Earnings Miss
missed earnings -- quelle surprise. Shares of the social deal stock are
down around 20% as I write following a 1-cent loss for the fourth
quarter and a less than amazing outlook for the quarter ahead. Let’s be
clear, Groupon hasn’t exactly been a bastion of fundamental strength
since it went public in late 2011. That said, the amount of negative
surprise we’re seeing in shares today is, well, surprising.
More significant is the technical outlook that this
stock is now showing off. Groupon gapped down hard this morning, shoving
its way down through a handful of weaker support levels. In short, this
stock is having some serious trouble catching a bid. Investors looking
for a “bargain” to buy GRPN need to look elsewhere.
American Capital Agency
Nearest Resistance: $32
Nearest Support: $31.50
Catalyst: Share Offering
$11 billion real estate investment trust American Capital Agency (AGNC)
is another stock that’s getting sold off in today’s session, albeit for
a different reason. AGNC is off around 3% this afternoon following a
share offering announcement -- the firm announced yesterday that it
planned to sell 50 million shares on the open market. Offerings are
rarely positive because they indicate a pressing need for cash and
dilute existing owners’ stakes; Mr. Market is reacting expectedly.
From a technical standpoint, the news derailed the
near-term uptrend that shares have been enjoying since November. While
that doesn’t mean that shares are likely to drop from here (they’re very
close to support at $31.50), I’d recommend for a floor to get
established before jumping onboard this name.
Nearest Resistance: $11.50
Nearest Support: $6
Catalyst: Filing Delay
may be trading more or less even on the day, but don’t mistake that for
a lack of interest; this rare earth mining company is one of the most
active stocks trading on the NYSE today. Molycorp is getting attention
after announcing that management is delaying filing their annual report
with the SEC and postponing its earnings call with investors. Unexpected
filing delays are rarely a good thing; often, they involve material
unexpected changes to firms’ financials, and rarely good ones at that.
Until the report gets filed, the exact reason remains
anyone’s guess. Technically, shares are sitting right at support at $6, a
key level that investors should be keeping a close eye on. If MCP
closes below that $6 mark, I’d recommend being a seller -- the
technicals haven’t looked good for this stock in a long time. A silver
lining comes from resistance well overhead at $11.50. If MCP can impress
investors on their next call, the firm has a lot of space to move
higher before hitting selling pressure.
Nearest Resistance: $19.50
Nearest Support: $19
Catalyst: Q4 Earnings
Mining giant Vale (VALE)
announced positive fourth-quarter earnings, earning the distinction of
being one of the few earnings names that’s actually seeing its share
price increase today. That price action is significant because it hits
the brakes on a selloff that’s been pushing shares lower since the first
trading session of 2013. As Vale attempts to push through nearby
resistance at $19.50, investors will get their first glimpse at whether
this stock can still court buyers in a market where commodities are
starting to lose luster.
A breakout above $19.50 is a buy signal for VALE.
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.