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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 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: $25
Nearest Support: $24
Catalyst: Earnings, Layoffs
Despite strong performance in 2013, Cisco Systems (CSCO) is reeling after posting anything but a strong fourth-quarter update on its business. Analysts had been expecting a profit of 51 cents per share, and even though Cisco beat that best guess by 1 cent, the firm is off more than 6.6% on a weak outlook and news that it's shedding 4,000 jobs. Cisco's $132 billion market cap means that its shaky guidance could spell trouble for the broader industry, so investors are selling this stock off.
From a technical standpoint, Cisco's big gap down this morning spells trouble. While the stock had been in a well-defined uptrend since May, that trendline got broken with traders' reactions to the news. That points to lower ground ahead for CSCO.
I'd recommend staying away from the long side of this name for the time being.
Nearest Resistance: $39
Nearest Support: $29
Catalyst: Online Payments Product
Facebook (FB) is getting bigger-than-normal attention from Wall Street in today's session after news that the social networking firm was going to introduce its own payments network, a direct competitor to eBay's (EBAY) popular PayPal platform and similar offerings from Google (GOOG) and Amazon.com (AMZN).
Despite the hike in volume, the news isn't spurring very directional trading in FB today. Shares are more or less keeping pace with the broad market's decline today.
But technically, FB looks "toppy" right now. Shares of the social networking giant are forming a rounding top pattern, which bumped its head on $39 resistance after its high profile move above its $38 IPO price. There were plenty of FB sellers who took gains when the stock retook $38 -- and that's likely to stay the case. If you're looking for an opportunity to buy Facebook now, wait for this stock to establish support first. There's too much downside risk from here.
Nearest Resistance: $2.80
Nearest Support: $2.40
Catalyst: Technical Setup
The combination of a low share price and a big market cap make Paris-based communications stock Alcatel Lucent (ALU) a perennial name on our list of most active stocks. Today, shares of ALU are down 4.2%, driven mainly by the technical setup that's showing early signs of a top in shares. For now, ALU's uptrend remains intact, but a crack below support at $2.40 is the signal that it's time to exit the long-side of this name.
For now, it's early to run for the door. Late-comers to this stock should wait for a support bounce for a lower-entry.
Nearest Resistance: $11
Nearest Support: $8.50
Catalyst: Hedge Fund Sells, Business Changes
Groupon (GRPN) is enjoying a stellar run in 2013. Shares of the deal site have doubled since the start of the year, some consolation at least for the 62% loss that investors who bought at the IPO are sitting on.
Today, shares are taking a 4% haircut, the result of news that Tiger Global was a seller of GRPN for the past quarter and trepidation over a refreshed business model that focuses on selling payment systems for retailers over daily deals.
Groupon still has some major fundamental challenges to overcome at this point. Even so, the stock remains in a well-defined uptrend since March with support at $8.50. More nimble traders should look for a bounce off of support for an entry -- and less nimble traders should stay away from shares.
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