7 Hot Stocks to Trade (or Not)
) -- 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
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, here's a look at
Research in Motion
Nearest Resistance: $18
Nearest Support: $14
Catalyst: BlackBerry 10 Release
Well, that was fun while it lasted. Shares of
Research in Motion
started up this morning, only to fall like a rock following the release of the BlackBerry 10 today. RIMM has been one of the most volatile stocks on the Nasdaq for the last several months, but its bottoming price action as attracted more than a few traders as shares made leaps and bounds higher. Now, the question is whether the upside is over.
There's no question that RIMM looks "toppy" right now. Shares hit hard resistance at $18, reversing lower for a test of support at $14 this week. At a glance, this stock looks like it could be in the early stages of a head and shoulders top pattern, but with a neckline at $11, the stock would need to fall another 25% before the actual sell signal came through. Instead, investors should look to sell on a break below RIMM's nearest support level at $14.
Nearest Resistance: $32.50
Nearest Support: $30
Catalyst: Earnings Call
2013 is shaping up to be a stellar year for
. Shares of the social network have rallied more than 21% since the first trading day of the new year. Even if shares are still far from their post-IPO open, this stock has made leaps and bounds from where it sat this summer. Facebook is getting extra trading attention today ahead of the firm's earnings call, where analysts expect the firm to report its first quarterly profit since going public.
With shares sitting right below resistance at $32.50, Facebook looks like a very possible breakout candidate if earnings don't disappoint Wall Street this afternoon. If you're looking for an opportunistic time to be a buyer in FB, I'd recommend waiting for a close above $32.50. That's a signal that buyers have been able to overcome the glut of supply of shares at that level.
Nearest Resistance: $26
Nearest Support: $23.50
Catalyst: Earnings Call
is another stock that's getting significant trading volume the day after announcing its fourth-quarter earnings numbers. EMC sold off into the earnings report, but shares are bouncing back this afternoon after the stock hit a support level from back in mid-November. Now, we could be coming up on a solid buying opportunity for shares.
Zooming into the chart a little, it looks like EMC is making a double bottom pattern in the intermediate-term. The breakout level to watch here is $26 resistance -- it's the resistance zone that halted shares' last attempt to move higher back in December. The strength of selling pressure at $26 makes a move through that price all the more significant.
To see these stocks in action, check out the at
At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to
. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in
Investor's Business Daily
, and on
Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.