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BALTIMORE (Stockpickr) -- Forget the traditional ways 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.
While crowdsourcing has long been a popular tool for the advertising industry, it 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 traders who want a starting point in their analysis.
Today, we’ll leverage the power of the crowd to take a look at seven of the highest-trending stock searches on Google.
With earnings season still managing to grab onto the headlines this week, you can bet that earnings names are dominating today’s list. Here’s a look at how these most searched names are trading technically.
Dick’s Sporting Goods
Nearest Resistance: $47
Nearest Support: $45
Catalyst: Positive Earnings
Dick’s Sporting Goods (DKS) is managing to shake off the selling today, buoyed by positive earnings and guidance numbers that fell in line with Wall Street’s expectations. Dick’s reported earnings for the fourth quarter of 88 cents per share, right on the mark with analyst estimates. That earnings boost is helping to paint a positive technical picture for shares of DKS.
Right now, this sporting goods giant is bumping its head above resistance at $47, a price that’s also a 52-week high. Making new 52-week 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, I’d recommend sitting on the sidelines until DKS pushes above today’s high water mark.
Nearest Resistance: $25
Nearest Support: $22
Things aren’t so simple for shares of Kronos Worldwide (KRO), a mid-cap firm that manufactures titanium dioxide pigments that are used to color everything from paint to food. Kronos announced earnings of 74 cents per share for the quarter, more than doubling last year’s fourth-quarter performance. But investors didn’t quite know how to react, bidding shares higher only to turn around and sell off.
While today’s price action is a bit more than most, Kronos has been forming a rounding bottom for the last few months, a setup that broke out above then-resistance at $22 before consolidating above that level more recently. With shares still squarely above that newfound $22 support level, a push through $25 resistance looks more palatable for market participants.
I’d recommend waiting for that to happen before taking a position in KRO.
Kronos shows up on a list of 10 Dividend Stocks to Keep You Safe Into 2012.
Nearest Resistance: $46
Nearest Support: $40
Catalyst: Mixed Earnings
Ski resort company Vail Resorts (MTN) is getting heavy search volume today on the heels of its own earnings announcement, which included a bottom line earning miss coupled with an aggressive increase in the firm’s dividend. Like Kronos, Vail is swinging from losses to gains today, but the technical setup in shares is still progressing positively right now.
Vail has been forming an inverse head and shoulders setup since the start of November, indicating that there’s exhaustion among sellers. The stock’s current resistance level at $46 is the pattern’s neckline, the price that shares need to break above before there’s a buy signal in MTN.
While shares have made their way above $46 in the last quarter and change, the move was limited to two trading days (an island reversal). That makes seeing a sustained move above $46 all the more crucial for traders.
Gold Fields Limited
Nearest Resistance: $16.75
Nearest Support: $14.70
Catalyst: Gold price stumble
South African gold miner Gold Fields Limited (GFI) is having a tough go of it this month. Since early February, shares of the firm have slid more than 10% as the price of gold pulled back from the $1800 level. Today, shares are getting attention again thanks to a big single-day pullback in gold prices.
From a technical standpoint, shares of Gold Fields are very close to testing support at the $14.70 level, a price that acted like floor for shares as recently as October. If GFI can catch a bid at that price, shares could make a similar rebound – that’s a big “if” right now, but barring a sustained breakdown below $14.70, that’s the most likely move for this stock.
A close below $14.70 followed by an open under that price in tomorrow’s session would be a sell signal for shares.
Nearest Resistance: $15
Nearest Support: $12.50
Catalyst: Earnings Anticipation, Upgrade
Pandora Media (P) is getting investor attention for a couple of reasons today, as reactions to an analyst upgrade from Stifel Nicolaus and this evening’s earnings call drive investors to take a second look at shares. While Pandora is getting sold off ahead of what could be a volatile earnings call, shares are still forming a bullish setup in the longer term.
Like Vail Resorts, Pandora is forming an inverse head and shoulders setup. The slanted neckline in Pandora makes this trade a bit more complicated than MTN’s but the implications are the same if Pandora can crack above resistance.
Ultimately, earnings are going to be a critical factor in whether this pattern plays out or folds. An earnings beat tonight could send Pandora on a breakout through that neckline.
Pandora, which shows up on a list of 4 Tech Stocks for 2012, was also featured in "7 Undervalued IPO Stocks That Could Rebound in 2012."
Nearest Resistance: $50
Nearest Support: $48
Catalyst: Earnings Boost
On the other side of the spectrum, shares of Verifone (PAY) are actually up more than 5.6% today after posting a nearly 50% increase in revenues versus the same quarter last year. The electronic payment firm gets to tack that performance on to the impressive run shares have already had in 2012, bringing PAY’s year-to-date performance to more than 38%.
And from a technical standpoint, there could be even more upside to this stock.
That’s because shares are attempting to test $50 resistance today, a price that shares previously had difficulty moving above -- and one that normally acts as a strong psychological resistance level for shares. Momentum-seekers should look to buy this name on a push above $50.
I also featured Verifone last month in "5 Stocks to Trade for Breakout Gains."
Nearest Resistance: $550
Nearest Support: $520
Catalyst: Media Event
Finally, Apple (AAPL) is getting heavy search volume today in anticipation of the firm’s media event tomorrow. Investors expect Apple to release a feature-packed third version of the iPad -- a move that could drive revenues for the company’s second and third fiscal quarter. Apple is no stranger to attention, especially given the firm’s prevalence in institutional portfolios and its status as the most valuable company in the world. But iPad 3 mania could take hold of the headlines this week.
Shares backed off of $550 resistance in the last few trading days, to test support at $520. After the prodigious 31% run shares have made this year, some sideways consolidation above support is a good thing. Traders should be looking to buy if AAPL can push above resistance.
To see these stocks in action, check out the at Most-Searched 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.