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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.
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. >>5 Cash-Rich Companies to Buy This Fall 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 a week away. And when there’s a big catalyst, there’s often a trading opportunity.
Without further ado, here’s a look attoday’s names.
Nearest Resistance: $2.75
Nearest Support: N/A
Catalyst: Outlook Cut
Waiting for Zynga (ZNGA) to find bottom? Don’t hold your breath.
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Shares of the San Francisco-based social game company have slid more than 75% since their first trading day this past December, and they’re continuing the trend this week, drawing big volume on a 19% down move in this afternoon’s trading. Zynga’s latest drop comes courtesy of a cut on its financial outlook. The price action isn’t a huge surprise – Zynga is one of five social media stocks that I recommended selling back in July.
Zynga’s horrendous technicals are the biggest reason to avoid shares. This stock broke down below support at $2.75, turning that level into a resistance level -- yet another upside barrier for shares. This stock has been consistently making new lows each month and buyers are nowhere to be found.
Without conviction from buyers, expect this stock to keep falling until sellers can’t sell it anymore. Facebook
Nearest Resistance: $23
Nearest Support: $18
Catalyst: IPO Lawsuits, VP Departure
With Zynga topping off our list of most active stocks today, Facebook (FB) couldn’t be far behind. But Facebook’s not purely a sympathy mover for Zynga today -- it’s got news of its own today.
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The announcement that investor lawsuits over Facebook’s IPO will move forward hit at the same time that the firm announced the departure of its global communications chief, the latest in a series of exec-level exits for the firm. While neither of those news items is truly that material for FB, it’s enough to move shares lower given the downtrend they’ve been stuck in all year.
Facebook has been locked in a downtrending channel for quite some time. That makes more downside the most likely outcome for shares. While the technical situation isn’t quite as bleak in the one in Zynga, I’d recommend selling the tops, not buying the dips. Intel
Nearest Resistance: $23
Nearest Support: $22.50
Catalyst: Technical Setup, VC Portfolio
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Intel (INTC) is another perennial high-volume stock worth mentioning today. A solid technical setup coupled with an update to the firm’s venture capital portfolio is putting more eyes on this semiconductor giant this week. The firm held a summit for its private venture capital arm this week, releasing the names of 10 technology companies in its portfolio. While Intel Capital is a small chunk of the chipmaker’s business, it has seen successful exits from some high profile investments, so investors pay attention to the VC unit’s deals.
The technical setup in Intel is also worth looking at right now. Shares of the $114 billion stock have slid around 6% so far in 2012, dragged lower by a semiconductor industry that’s still in convalescence mode. But shares have been basing for the past two weeks, bringing up the possibility that a reversal could be in order.
With INTC in a tight range right now, I’d recommend being a buyer if shares can push through $23.
Nearest Resistance: $13.50
Nearest Support: $12
Catalyst: T-Mobile or Sprint Merger
The drama continues to spur trading in MetroPCS (PCS) this week. For those who weren’t following the story, MetroPCS is in talks with T-Mobile about a merger deal right now. The move sparked a big rally in shares of PCS earlier in the week that’s mostly settled down at this point -- but news that Sprint (S) could throw an offer on the table too makes things a little more interesting.
I like PCS a lot -- the firm has a big base in the flat-price cellular business that was trading at a big discount. So last May, I put MetroPCS on my Rocket Stocks list, saying that an acquisition was the likeliest path to upside for the firm. The rally that shares have undertaken in the last several months has borne that out.
At this point, though, all of the eyes on PCS have eroded away much of its upside potential. I’d recommend looking elsewhere for a better risk/reward tradeoff. To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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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.