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 thats 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.
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. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity.
Without further ado, heres a look at today's stocks.
RF Micro Devices
Nearest Resistance: N/A
Nearest Support: $6
Catalyst: TriQuint Acquisition
Small-cap RF communications stock RF Micro Devices (RFMD) is up more than 16% on high volume today, after news hit that the firm was acquiring TriQuint Semiconductor (TQNT) in a move to increase its exposure to the lucrative mobile chip business. The $1.6 billion acquisition will be paid for in stock. Shares of RFMD are pushing to new highs following the announcement.
Making new highs is significant from an investor psychology standpoint because it means 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 be a buyer here, I'd recommend keeping a tight stop in place.
Nearest Resistance: $9
Nearest Support: $8
Catalyst: Post-Earnings Hangover
Shares of daily deal site Groupon (GRPN) - Get Groupon, Inc. Report are feeling the effects of a post-earnings hangover today -- and it's a big one. Shares fell more than 21% on the heels of fourth-quarter earnings, thanks to forecasts that missed the estimates Wall Street was expecting.
Groupon broke through its long-term support level on Friday, as buyers fled shares en masse following that earnings call. So even though shares appear to be bouncing in today's session, the bounce is more of the dead cat variety than a reprieve from selling. A slip below $8 support offers a second high-probability trade for short sellers.
Kinder Morgan Energy Partners
Nearest Resistance: $76
Nearest Support: N/A
Catalyst: Barron's Article
Pipeline and energy storage stock Kinder Morgan Energy Partners (KMP) is taking a downside hit today following a story in Barron's that made the case shares were significantly overvalued. KMP is trading almost 4% lower in this afternoon's session as a result.
From a technical standpoint, today's breakdown is significant -- it shoved shares below support at $76, triggering a descending triangle pattern that's been forming for the last year. That opens downside risk in KMP in a big way. Investors who stand by this stock's 7.2% dividend yield may want to wait before buying; it's likely to get even bigger.
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 stocks 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