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.
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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.
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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. 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: $40
Nearest Support: N/A
Catalyst: Lock-Up Expiration
Shares of social media star Twitter (TWTR) are down more than 4% this afternoon, tacking on more losses to a pretty rough week for the micro-blogging platform. Since Monday, shares of Twitter have dropped more than 21% following the expiration of the firm's lock-up period. All of that excess supply of shares is piling selling pressure onto an already broken chart.
From a technical standpoint, Twitter's chart broke at the end of April, when shares closed materially below $40 for the first time after earnings. Lower levels still look likely from here. I'd recommend staying clear of this name until it can establish some semblance of support again.
Facebook
Nearest Resistance: $64
Nearest Support: $55
Catalyst: TWTR Sympathy Move
Social network Facebook (FB) is down 2.6% on high volume this afternoon, the result of sympathy moves from industry peer Twitter. And while Twitter's chart looks broken right now, Facebook's setup isn't faring much better.
Facebook looks "toppy" from a technical standpoint, forming a classic head and shoulders top in the intermediate term with a neckline at $55. Put simply, if FB violates that line in the sand at $55, then a lot more downside looks likely. That's not particularly comforting news for Facebook investors who've seen their stakes fall by more than 20% since March, but it's the high probability trade that's shaping up in shares. Keep a very close eye on that $55 level in May.
Cognizant Technology
Nearest Resistance: $47
Nearest Support: $45
Catalyst: Q1 Earnings
Better-than-expected profits weren't enough to prevent the selling in Cognizant Technology (CTSH) this afternoon -- shares of the $28 billion IT outsourcer are down 5% this afternoon following first-quarter results. Cognizant earned 62 cents last quarter, beating Wall Street's 55-cent estimates pretty handily. But it's the firm's outlook that failed to live up to expectations: CTSH expects $10.3 billion in revenue for the full year, shy of investors projected numbers.
Technically, the selling broke shares down below former support at $47, a level that's been a floor for this stock since all the way back in November. That newfound absence of buying pressure at $47 is a major red flag for CTSH's ability to catch a bid higher going forward.
Support at $45 is pretty weak. Lower ground looks likely in the near-term in Cognizant.
Baidu
Nearest Resistance: $310
Nearest Support: $280
Catalyst: TWTR Sympathy Move
Last up is Chinese Web search company Baidu (BIDU), another tech name that's seeing big downward volume today as a sympathy move to Twitter. While today's price action isn't exactly welcome, the good news is that it's not exactly a bid deal either. Given the broad range that BIDU has been trading in, today's 5% selloff looks more like noise than anything else.
Key support at $145 is the line in the sand at BIDU. As long as shares hold that level, it's not a sell.
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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At the time of publication, author had no positions in the names 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
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