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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 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: N/A
Nearest Support: $23.75
Catalyst: Earnings, IPO, Phase III Results
First up today is Pfizer (PFE), the drugmaking giant that’s known for blockbuster drugs like Celebrex, Lipitor and Viagra. Pfizer announced its second-quarter earnings this morning, besting Wall Street’s expectations thanks to cost cutting efforts.
It was an action-packed morning for Pfizer. On top of earnings, the firm announced that it had received positive phase III results from one of its pipeline rheumatoid arthritis drugs and that it was planning to file in mid-August to IPO its animal health unit. The deal will unload around 20% of Pfizer’s stake of the subsidiary.
The news sent Pfizer to a new 52-week high in this morning’s trading, a good sign for shareholders. Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains – as a result, the “back to even” mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.
For late-to-the-game buyers though, I’d recommend sitting on the sidelines until PFE pushes above today’s high water mark.
Pfizer, as of the most recently reported period, is one of Ken Fisher's top holdings.
Nearest Resistance: $55
Nearest Support: $47.50
Catalyst: Earnings, 2013 CapEx Plans
Coach (COH) is another name that beat earnings this morning, but Wall Street is reacting a bit differently. Coach announced solid numbers -- beating earnings estimates by a penny -- but also dropped the bomb that 2013 would be a year filled with capital expenditures as the firm invests heavily in its Asian distributors. That sent Coach down more than 16% as I write.
The fact remains that Coach has been a top flier for the last few years, surprising analysts with its ability to earn a profit in spite of the worst economic conditions in recent memory. While today’s selling isn’t ideal, support at $47.50 is near enough that shares should be able to catch a bid nearby. Investors looking for a cheaper entry would do well to snatch up shares.
Nearest Resistance: $6
Nearest Support: N/A
Catalyst: Earnings, Restructuring Plan
Small-cap pharmaceutical firm Dendreon (DNDN) is seeing heavy trading activity this afternoon after announcing earnings and a restructuring plan that will cut 600 jobs from its headcount -- more than a third of its employees. The move is being proffered as a means of cutting costs after second quarter earnings missed estimates.
So far, the only cost that’s been cut has been DNDN’s share price. Shares have slid more than 35% so far this year, counting the 20% that the stock has shed since yesterday’s closing bell. That pushed DNDN to a new 52-week low, a phenomenon that has opposite effects from Pfizer’s new highs.
Resistance is especially strong at $6. I’d recommend avoiding this stock right now.
Dendreon was also featured recently in "4 Biotech Stocks Under $10 With Relative Strength."
Nearest Resistance: $26
Nearest Support: N/A
Catalyst: Earnings Carryover
Facebook (FB) is scraping against some new lows of its own today, down 5% after dropping more than 23% in the last week. The culprit? You guessed it: earnings.
The firm’s highly anticipated second quarter earnings release on July 26 didn’t do much to quell concerns that the quintessential growth stock wasn’t growing. In fact, it made them worse. That sparked a massive gap down in the social network last week, sending shares lower than they’ve ever been in their short trading history.
That was enough to feature Facebook in "5 Social Networking Stocks to Sell Now." Today’s price action just proves it.
Nearest Resistance: $32
Nearest Support: $28
Meanwhile, hard drive maker Seagate Technology (STX) is seeing heavy trading today after the firm announced a mix earnings report for its fiscal fourth quarter: Seagate reported record numbers for the fourth quarter, but the firm tempered growth expectations for fiscal 2013.
While shares opened much lower this morning, they’ve been clawing their way back up as the trading session progresses. As I write, Seagate is down 4.3% on the day.
Despite the lower price, Seagate’s trading looks pretty decent. The fact that shares have slowly been climbing higher in today’s session means that shares can catch a bid at current prices -- always a good thing. At the same time, longstanding resistance at $32 is pretty near by. I’d be a buyer if STX can push above that $32 level once and for all.
Nearest Resistance: $13
Nearest Support: $11.50
Catalyst: Earnings Miss
Mid-cap building product maker Masco (MAS) is selling off around 5.3% right now thanks to an earnings miss that shoved shares to a loss in the second quarter after one-time charges were factored in.
The price move is pretty significant for shareholders right now. That’s because Masco had been forming a bullish ascending triangle setup, but today’s gap down pushed shares outside of the pattern. An aborted bullish pattern may as well be a bearish pattern, so at this point, I’d expect MAS to at least test support at $11.50.
As of the most recently reported quarter, Masco was one of David Tepper's Appaloosa Management holdigns.
Nearest Resistance: $7
Nearest Support: $5.50
Catalyst: Hard Drive Sales, STX Sympathy Move
Computer RAM maker Micron Technology (MU) is seeing its shares up more than 5% this afternoon after the firm announced that one of its key subsidiaries would begin selling hard disk drives. Coupled with high-profile record sales numbers at Seagate, Micron is getting ample attention in today’s market session from the news.
And that bodes extremely well for Micron shareholders in the next week or two. While Micron has been under pressure in 2012, tumbling more than 15% in the last six months, shares are currently forming a double bottom at $5.50. The breakout level to watch is $7 -- that’s the price where I’d want to be a buyer for technical reasons alone.
With buyers showing their willingness to pick up shares at higher prices today, MU is going to be a solid stock to keep an eye on.
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, 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.