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.
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.
Without further ado, here's a look at today's stocks.
Family Dollar Stores
Nearest Resistance: $75.75
Nearest Support: $74
Catalyst: Acquisition News
One of the biggest M&A stories of the week is news that Dollar Tree (DLTR) - Get Dollar Tree, Inc. Report had agreed to buyFamily Dollar Stores (FDO) in an $8.5 billion deal that would create the largest dollar store chain in the country. The deal means that Dollar Tree will pay approximately $74.50 per share in cash and stock, a valuation that's more than 23% higher than FDO's closing price on Friday. The deal is also good news for billionaires Carl Icahn and Nelson Peltz, who had been conspicuous proponents of a merger.
Technically speaking, today's breakout is significant in FDO, moving shares through key resistance at $70. But at this point, FDO's share price is going to be more of a factor of DLTR's price action than a free-trading issue. If you want to take advantage of the dollar store deal, look at DLTR.
Nearest Resistance: $60
Nearest Support: $54
Catalyst: FDO Acquisition
Even though the price action in DLTR hasn't been the most compelling, this stock is starting to look attractive again thanks to an uptrend in shares. Shares traded in a big range yesterday following the announcement, but they settled in close to trend line support by the close. Put simply, DLTR is a "buy-the-dips stock," and we're looking at a dip here.
Nearest Resistance: $67.50
Nearest Support: $57.50
Shares of online real estate advertising site Trulia (TRLA) rallied almost 15% in a wide trading range yesterday, following news that the firm was being acquired by Zillow (Z) - Get Zillow Group, Inc. Class C Report in an all-stock deal. The arrangement pays out TRLA shareholders 0.444 shares of Zillow for every share they own of the target company.
While there's still a small arbitrage opportunity in shares of Trulia, the money has mostly been made in this stock since the middle of July. News of the deal leaked on Thursday, spurring a big breakout in shares.
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