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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: $17
Nearest Support: $12.36
Catalyst: Earnings, Guidance Miss
Shares of networking equipment maker Aruba Networks (ARUN) are getting shellacked this afternoon, down more than 25% as I write following a first-quarter loss and lower guidance announced after the bell yesterday. The firm earned 11 cents per share for the quarter, a penny short of the 12 cents that analysts were expecting -- but the guidance dip is what's doing the stock in today.
From a technical standpoint, Aruba Networks is broken. The stock gapped down hard on this morning's open, shoving shares all the way down to support at their $12.36 52-week low. While it's positive that shares are catching a bid down there, it's a little too early to say that the selloff is over. After all, shares have halved in the last month alone.
Advanced Micro Devices
Nearest Resistance: $4.40
Nearest Support: $3.70
Catalyst: Post Goldman Rebound
Investors are getting a rebound in Advanced Micro Devices (AMD) today, after Goldman Sachs (GS) cut the stock's rating to sell, gapping shares down yesterday. The past month has been breakneck in AMD, with rumors circulating about a possible buyout, and shares doubling as a result. At first glance, even Goldman's splash of cold water this week isn't enough to pull buyers from shares.
Taking a slightly closer look at AMD, this stock is starting to look like a reveral The $4.40 resistance level put in by shares earlier this week looks strong, and the stock is starting to look like a possible head and shoulders top. I'd be looking for a breakdown below $3.50 as a key signal that the trapdoor is opening for shares. Nearer-term, $3.70 should act as a slightly less important support level.
Nearest Resistance: $15
Nearest Support: $14.50
Investors don't know how they feel about yesterday's earnings call from Applied Materials (AMAT) -- or at least that's what the stock's price action indicates. Shares opened lower after the firm posted a loss for the quarter, but they've slowly gotten bid up during today's trading session. Guidance within Wall Street's expected range is helping out with AMAT's ability to stay afloat.
From a technical standpoint, shares have been consolidating for the last month, trading sideways in a range between support at $14.50 and resistance at $15. Today's trading doesn't change that. I'd recommend waiting for a breakout above that $15 level if you're looking for a place to jump into this stock. That's when more upside becomes a high-probability trade.
Nearest Resistance: $40
Nearest Support: $36
Catalyst: Earnings, Guidance Miss
Autodesk (ADSK) is another earnings-driven name that's seeing huge volume this afternoon. The software firm is down more than 7% in this afternoon's trading after reporting the one-two punch of an earnings miss and a guidance miss. Like AMD, Autodesk is showing signs of a top, albeit in the longer-term. The neckline level is at $36 -- a breakdown below that price is a sell signal for ADSK.
Even though shares printed below that level briefly today, they recovered quickly. I'd only count a close below $36 as a trade signal. If you decide to go short there, keep a tight stop in place. A move above $40 negates the bearish overtones on Autodesk's chart.
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.