4 Big-Volume Stocks to Buy for Big Gains: Must-See Charts

Here's a technical look at how to trade some of the most active stocks on the market right now.
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.

Mizuho Financial Group

  • Nearest Resistance: $4.40
  • Nearest Support: $4.10
  • Catalyst: Technical Setup

$52 billion Japanese bank Mizuho Financial Group (MFG) - Get Report  reports earnings on Friday, but shares are seeing big trading volume early in the week thanks to a technical setup that's been forming in shares for the last three months.

Mizuho has been forming an inverse head and shoulders pattern, a bullish reversal pattern that indicates exhaustion among sellers. The pattern triggered with yesterday's breakout through $4.10. From here, shares are clear to test prior highs up at $4.40.

While Friday does add some extra earnings risk to this breakout buy signal, Mizuho otherwise looks like a pretty attractive buying opportunity. Be sure to keep a protective stop in place if you decide to buy this Japanese financial stock ahead of earnings.

Boston Scientific

  • Nearest Resistance: $19
  • Nearest Support: $17
  • Catalyst: Medicare Reimbursement Decision

Shares of Boston Scientific (BSX) - Get Report  are correcting more than 4% this afternoon, swatted lower by the prospect that Medicare may not cover reimbursements for the firm's Watchman left atrial appendage device. If the Watchman is deemed not necessary when the final decision is handed down, sales of this and other similar medical devices could see a significant haircut.

Meanwhile, Boston Scientific's chart is greatly improved from the start of the summer. After selling off in a well-defined downtrend, this stock broke out on earnings late last month. Today's correction doesn't change the fact that the old trend is over. Boston Scientific's shares are sniffing out support at this point. Once they find it, BSX becomes buyable.

Apple

  • Nearest Resistance: $125
  • Nearest Support: $112.50
  • Catalyst: Technical Setup

Technology giant Apple (AAPL) - Get Report  is following the rest of the broad market this afternoon, correcting by about 0.9% on big volume as shares back off of the highs set at the start of the month.

After a pretty sideways start to the year, Apple has been forming a pretty-well defined uptrend off of its August lows. A new test of that new trend line support level would make a pretty attractive buying opportunity from a risk/reward standpoint. As long as Apple doesn't violate support at $112.50, the uptrend is still intact in this big stock.


Alphabet

  • Nearest Resistance: N/A
  • Nearest Support: $680
  • Catalyst: Technical Setup

Shares of tech giant Alphabet (GOOG) - Get Report , (GOOGL) - Get Report are testing new highs this afternoon, following through after a big earnings-driven breakout at the end of October.

Alphabet spent the second half of the summer forming an ascending triangle setup with resistance at $680 in its class C shares, and following the break above that level last month, a whole lot of upside potential got opened up. For class A shares, $700 is the equivalent support level now. Both classes are testing new all-time highs this week.

Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares 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 traders who aren't risk-averse, there's still time to build a position in Google now, just keep a tight stop in place.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long AAPL.

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