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4 Big Stocks on Traders' Radars - 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.
Dunkin' Brands Group
Nearest Resistance: $45
Nearest Support: $42
Catalyst: Profit Beat
Shares of $4.5 billion donut and ice cream shop chain Dunkin' Brands Group (DNKN) are up 3% this morning after the firm doubled its second-quarter profits. Excluding one-time items, Dunkin' made 41 cents per share last quarter, besting analysts' estimates by a cent. That should help fuel more upside for shares in the third quarter.
One look at DNKN's chart tells you just about everything you need to know: This stock has been in a textbook uptrend for all of 2013 with relative strength to spare. The 50-day moving average continues to be a key support level for shares right now.
With DNKN bouncing off of that support line today, now looks like a strategically good time to be a buyer.
Nearest Resistance: $17.50
Nearest Support: $12
Catalyst: Earnings Miss
There's no two ways about it -- Crocs (CROX) is getting absolutely shellacked today. The footwear maker posted its second-quarter earnings and guidance after the bell yesterday, missing estimates by 16 cents. Even though the firm posted a record $363.8 million in revenues for the quarter, Wall Street isn't forgiving the miss (or the poor guidance that followed). Shares of CROX are off more than 20% as of this morning's session.
The uptrend that CROX investors have been enjoying since November officially broke today. While support is pretty strong at $12, that level is still far enough away to be cold comfort to owners right now. Worse, there's considerable overhead resistance on the way back up, a signal that there's likely to be far more supply of shares than demand for the foreseeable future.
I'd suggest staying away from shares this week.
Nearest Resistance: N/A
Nearest Support: $10
Catalyst: Profit Swing
2013 is panning out to be a good year for shareholders of Boston Scientific (BSX) -- the stock is up 87% since the start of the year. And now, shares of the $16.6 billion medical device maker are up more than 11% in today's trading after swinging to a profit for the second quarter this morning. That's sent shares to a new multi-year high.
For all the same reasons as the new high in Facebook, the new high water mark in BSX has bullish technical implications -- maybe more so. After all, BSX has been displaying much stronger relative strength in 2013 than FB, and that's statistically a very high predictor of future positive returns. Today's breakout looks like a good entry point for investors who aren't risk-adverse.
Nearest Resistance: $3.50
Nearest Support: $3
Catalyst: Q2 Loss
Last up is Sequenom (SQNM), the small-cap DNA diagnostic device maker. Shares of SQNM are down more than 30% this morning, after the firm posted a worse-than-expected loss for the quarter. Aalysts were already expecting SQNM to shed 22 cents for the trailing three months, but the firm actually lost 27 cents. Now, with management in cost-cutting mode, investors are getting squeamish enough to unload shares en masse.
Technically, Sequenom doesn't look great -- but then again, its chart didn't look all that compelling to begin with. Shares are currently right above support at $3, a price that's acted as a floor for shares as recently as November. Resistance at $3.50 could be a challenge for shares, but it's far enough overhead that there's considerable gain potential between here and there. Frankly, SQNM looks like one of the better-positioned bounce trades this week.
I'd still suggest waiting for shares to establish support again before jumping in; then, keep a protective stop just below $3.
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