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4 Huge Stocks to Trade (or Not) - 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.
Nearest Resistance: $16.50
Nearest Support: $15
Catalyst: Technical Setup
Auto giant Ford (F) is off almost 2% today for technical reasons, as shares continue to have a hangover from earnings at the start of this week. This chart hasn't looked good since the end of 2013, when shares started forming a head and shoulders top. The trigger for that bearish setup came in mid-December, followed by a pullback to retest $16.50 support.
Now shares are make-or-break at $15. If Ford can't catch a bid and bounce higher here, expect another leg down.
Nearest Resistance: $410
Nearest Support: $360
We've heard it all before: Valuation doesn't matter in Amazon.com (AMZN).
Well, until today, that is. AMZN is off nearly 10% on the heels of an earnings miss that had the firm's 51 cents per share in earnings a full 15 cents shy of estimates. Maybe worse, the announcement that a price hike could be coming for its Prime service could provide a big test of just how sticky all of those Amazon customers really are.
I wouldn't recommend buying the dip in Amazon. While shares had been showing an ostensibly bullish setup earlier this month, that trade broke before it ever triggered. Now, with today's big gap down, there's no question that this chart is broken. Stay away until it finds support.
Nearest Resistance: $40
Nearest Support: N/A
The same can be said of toymaker Mattel (MAT). Mattel announced its quarterly numbers this morning, showing earnings of $1.07 per share on weaker-than-expected holiday sales. Analysts' best guess had been closer to $1.19, so shares are down almost 10% in today's session.
The technicals are pretty simple in Mattel. The uptrend in shares broke when the calendar flipped over to January, and shares have been lowing through support in the weeks since. That's a clear indication that buyers were fleeing shares, and it's why today's gap down was so brutal.
This chart is broken just like Amazon's, only more so. I'd stay away unless buyers can retake resistance at $40.
Nearest Resistance: $77.50
Nearest Support: $70
MasterCard (MA) is another earnings disappointment that's trading on high volume this afternoon. And while the size of MasterCard's move down isn't as substantial as other big earnings drops today (it's down just over 4% as I write), the move could be every bit as consequential. MasterCard earned 57 cents per share in the last quarter, besting its previous year's income by 13% -- but that wasn't enough to appease Wall Street, and shares are reacting to that today.
What's notable about MasterCard is the fact that MA has been one of the biggest relative strength names in the last year. This stock's uptrend has been well-defined, but it's in jeopardy in this session. Shares are breaking down below the trendline support level that's been in play for months. If shares can't close above $76, it's time to unload MA before it moves lower.
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