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 such as 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.
GT Advanced Technologies
Nearest Resistance: $20
Nearest Support: $13
Catalyst: Analyst Downgrades
A barrage of negative analyst actions is the catalyst for today's 12.8% drop in shares of GT Advanced Technologies (GTAT). This $2.3 billion technology stock is down on big volume following a note from Canaccord that indicates earnings upside is unlikely unless Apple (AAPL) uses GTAT's sapphire glass in all iPhone models and the yet-unannounced iWatch. The firm downgraded GTAT to hold. At the same time, UBS downgraded GTAT to neutral on their own guidance concerns.
While the pair of downgrades is to blame for the big drop in shares, the "double top" pattern that's emerging in GTAT is the bigger concern for investors right now. This stock has moved far and fast over the last year, and a breakdown below $13 is the signal that GTAT is suddenly exposed to significantly more downside. Sell the breakdown below $13.
King Digital Entertainment
Nearest Resistance: N/A
Nearest Support: $20.50
Catalyst: Analyst Upgrade
Analyst actions are having the opposite effect at King Digital Entertainment (KING). Shares of the Candy Crush maker are up 3.5% on big volume this afternoon, following an upgrade from Piper Jaffray. Piper's note focuses on the fact that King's hugely successful Candy Crush title may not be the firm's sole success; it's seeing momentum in other app titles now as well. Piper Jaffray raised their price target to $28 from $19, moving KING to overweight.
Technically speaking, the price action looks solid as KING pushes its way to a new high. New highs are significant from an investor psychology standpoint because they mean 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.
If you decide to buy here, keep a tight stop in place.
J.C. Penney
Nearest Resistance: $10
Nearest Support: $8
Catalyst: Technical Setup
Department store retailer J.C. Penney (JCP) is down 3% this afternoon, dragged lower for technical reasons as this big-name store chain attempts to test critical resistance at $10 for the third time since last fall.
Long-term, JCP is forming an inverse head and shoulders pattern, a classic bullish technical setup that triggers on a move through that $10 level. If buyers can muster the strength to drag shares above $10 this summer, then traders have a buy signal in this long-suffering stock.
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 was long AAPL.
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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