3 Stocks Trading on Big Volume -- and What to Do With Them Now

These stocks are seeing big trading volume today. Here's how to trade them from here.
By Jonas Elmerraji ,

 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.

Iconix Brand Group

  • Nearest Resistance: $9.50
  • Nearest Support: $6.60
  • Catalyst: Q3 Earnings

Shares of small-cap apparel licensing stock Iconix Brand Group (ICON) - Get Report  are seeing a second straight session as one of the highest-volume names on the Nasdaq, following the firm's third-quarter earnings results. Shares had sold off on Friday, following news that Iconix would need to restate some numbers and cut forecasts. Shares are up 11% this afternoon after Iconix reported reserves for losses that were smaller than feared.

Despite the rebound today, Iconix's chart still looks broken here. Shares had been in a downtrend already for all of 2015, and Friday's big gap lower propelled shares down below the bottom of that trend channel. Bargain-hunting buyers should exercise extreme caution with this stock right now.

Weyerhaeuser

  • Nearest Resistance: $31
  • Nearest Support: $28.50
  • Catalyst: PCL Acquisition

Timber REIT Weyerhaeuser (WY) - Get Report  is correcting 3% this afternoon on big volume, following the announcement that this $15 billion firm is acquiring Plum Creek Timber (PCL)  for $8.4 billion in stock. The deal will significantly increase Weyerhaeuser's scale, giving the combined company more than 13 million acres of timberland in the U.S. Management expects the merger to save as much as $100 million in annual costs.

Technically speaking, Weyerhaeuser is approaching an important support level at $28.50 this week, after breaking out above that level back in October. A bounce off of $28.50 provides a low-risk buying opportunity for investors in November.

Plum Creek Timber

  • Nearest Resistance: $47
  • Nearest Support: $45.50
  • Catalyst: Acquisition

The other side of the Weyerhaeuser trade is

Plum Creek Timber

. Plum Creek is rallying more than 16% this afternoon on the deal, making its way up to within 1% of the value of the Weyerhaeuser shares that Plum Creek shareholders will receive when the deal is completed.

In other words, the money's already been made on the Plum Creek trade. For late-to-the-game traders, it makes sense to look elsewhere for buying opportunities at this point.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

Loading ...