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.
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. And when there's a big catalyst, there's often a trading opportunity.
Without further ado, here's a look at today's stocks.
Nearest Resistance: $7
Nearest Support: $6
Catalyst: Technical Setup
Daily deal site Groupon (GRPN) - Get Groupon, Inc. Report is seeing a high-volume pullback this afternoon, down 2.5% after a big technical move in the last week. Groupon spent the start of 2014 in an unmistakable downtrend, but that slumping stock price changed at the start of June, when shares broke out above the trend line resistance level that's been haranguing shares this entire time. With the downtrend broken, more upside looks likely for GRPN.
Groupon is seeing added volume this week thanks to some fundamental news that prompted a breakout above shares' 50-day moving average, a level that's acted like resistance over the course of the downtrend. Now it's support. A recent uptrend in momentum, measured by 14-day RSI, adds some extra confidence to the buy signal in this name. Put a stop under $6 if you decide to jump in here.
Nearest Resistance: $50
Nearest Support: $47
Catalyst: Drug Results
Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report is up nearly 3% on high volume as I write this afternoon, up following news that the firm was stopping its study on skin cancer drug nivolumab after the study showed clear positive results. The trial brings BMY one step closer to commercializing its melanoma treatment, and optimistic investors are piling into shares today.
Technically speaking, it's a little early to celebrate in shares of BMY. This stock has been making lower highs since March, and today's move higher is testing a key resistance level that's swatted shares down twice. If BMY can break out above $50 resistance, then it's a buy. Otherwise, sellers remain in control.
Nearest Resistance: $54
Nearest Support: $51
Catalyst: Q4 Earnings
Cereal maker General Mills (GIS) - Get General Mills, Inc. (GIS) Report is getting sold off 3.5% this afternoon, dragged lower by fourth-quarter earnings numbers that fell short of expectations. GIS announced profits of 67 cents for the quarter, but Wall Street was expecting a 72-cent payday. That miss is also triggering a big technical sell signal in GIS this afternoon.
GIS spent the last two months forming a textbook head and shoulders top setup, a pattern that triggered on a move through $54. We saw that move happen with yesterday's close, and it got confirmed with today's material breakdown. While the downside target from the head and shoulders is modest, a lack of meaningful support below means that shares could have a lot further to fall. Buyer beware.
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