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7 Hot Stocks on Traders' Radars - views
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 such as 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 in full swing 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.
Nearest Resistance: $116.55
Nearest Support: $105
Catalyst: Positive Earnings
Shares of Caterpillar (CAT) are rallying hard this afternoon, buoyed by positive earnings numbers for the firm’s fourth quarter. 2012 had already been strong for CAT shareholders -- but now year-to-date performance has rocketed to near 24% gains since the calendar year turned over. The firm bested analysts’ expectations by 34%, delivering profits of $2.32 per share.
From a technical standpoint, it looks like CAT could have higher to run. The firm broke out above a long-standing resistance level at $97 back in the first full week of the new year, and now shares are getting close to testing a 52-week high at $116.55. 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 that reason, I’d recommend waiting for shares to push above $116.55 before buying.
Nearest Resistance: $70
Nearest Support: $67
Catalyst: Micromet Acquisition
Amgen (AMGN) is getting investor attention today after announcing that it would be buying Micromet (MITI) for $1.16 billion. The move gives Amgen ownership of a promising experimental leukemia drug that Micromet has been developing, a welcome addition to the relatively sparse pipeline that Amgen’s currently struggling with.
This acquisition falls well short of Amgen’s annual R&D budget, so investors should expect to see similar pipeline acquisition transactions in the future if Amgen can secure a good price for new subsidiaries.
Amgen broke out above a consolidation range back in December, cracking overhead resistance at the $58 level. Shares have rallied hard since, and are now consolidating again just under the $70 level. That pause in price is likely to be short lived.
Wait for a break above $70 before buying this stock.
Time Warner Cable
Nearest Resistance: $80
Nearest Support: $71
Catalyst: Positive Earnings
It’s shaping up to be a very good day for Time Warner Cable (TWC) shareholders. Shares of the $23.6 billion cable operator are up more than 7% as I write today following double-digit earnings surprise in shares. TWC delivered earnings of $1.39 per share, ratcheting its quarterly performance up more than 40% versus the year-ago period.
And like Caterpillar, there are signs of additional upside in this stock as shares approach their 52-week high. TWC broke out above $71 resistance in reaction to the earnings news, taking out a glut of supply of shares that had previously existed at that level. As a result, the firm has been increasing its gains over the course of Thursday’s session -- a good sign for investors as the stock approaches $80 resistance level.
Wait for that price to get exceeded before taking on a new position in this stock.
Nearest Resistance: $90
Nearest Support: $82
Catalyst: Positive Earnings
3M Company (MMM) is showing traders a similar technical story this morning, buoyed by more positive earnings. Like other popular names from today’s session, 3M is coming off the heels of a significant breakout in mid-December and pushing its way toward a retest of its 52-week highs.
Although the earnings surprise is less dramatic than that of TWC or CAT (reflected in today’s price action), this stock remains in bull-mode right now. Traders considering a starter position in shares should keep a protective stop just below the 200-day moving average.
Nearest Resistance: $85
Nearest Support: $70
One of the notable losing stocks today is mid-cap athletic apparel maker Under Armour (UA). In the past year, UA has historically been a high performer, capturing a bigger share of the saturated domestic apparel market and seeing a 36% rally in its shares over the trailing 12 months.
But the firm is giving back some of that performance today -- down 5.6% at last count. While today’s earnings numbers were solid, guidance was enough to throw investors off.
Technically, UA has been consolidating in a range for the last quarter and change, locked between resistance at $85 and support at $70. That is creating an actionable if/then trade in shares right now -- wait for prices to break outside of their channel before taking a position in the direction of that breakout.
Under Armour was featured earlier this week in "5 Earnings Stocks Set for a Squeeze."
Nearest Resistance: $30.50
Nearest Support: $29.25
Catalyst: Earnings Miss
AT&T (T) is another notable slider in Thursday’s session. The telco’s earnings were marred by a massive $4 billion charge from the failed takeover of T-Mobile, a deal that fell through amid regulatory pushback. Ultimately, AT&T’s huge scale made regulators concerned about the impact of the combination -- but management felt like that the cost was worth the risk.
Also marring AT&T’s performance was the release of the new iPhone 4S, which is heavily subsidized by the carrier; contract revenues should help to win some of that cash back in the next several quarters.
While the technical setup in AT&T had been ostensibly bullish for much of the fourth quarter of 2011, that’s changed. A breakdown below $29.75 puts a distinctly bearish tenor on AT&T’s price action -- traders will need to see shares hold support at $29.25 for this not to become a strong short candidate.
AT&T shows up on a recent list of High-Yield Stocks to Own.
Nearest Resistance: $449
Nearest Support: $430
Catalyst: Positive Earnings
Last up is Apple (AAPL), a stock that’s getting significant attention after posting the highest quarterly revenues and earnings in the company’s history. Where the iPhone 4S derailed AT&T’s margins for the quarter, it helped Apple achieve 128% unit growth for its iPhone line over that same period.
Apple’s chart is looking similarly strong right now -- Tuesday’s earnings sent shares to a new 52-week high just shy of $449, a price level that now acts as resistance.
With strong fundamentals and technical’s as well as Apple challenging Exxon Mobil (XOM) for the title of the biggest company in the world, now could be a good time to be a buyer of this tech titan.
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.