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.
Nearest Resistance: $74
Nearest Support: $72.50
Catalyst: Roche Acquisition
First up today is drug maker InterMune (ITMN) , a name that's up more than 35% this afternoon, after the announcement hit that pharmaceutical giant Roche Holding (RHHBY) was acquiring the smaller firm for $74 per share in cash, putting the total deal value at $8.3 billion. Shares instantly gapped higher on the open this morning, floating around just below that $74 deal price minus a small 1.5% risk premium. That merger arbitrage opportunity represents the market's pricing of the risk that the deal falls through. For most retail traders, it's too small to take advantage of at this point.
The money has already been made on ITMN at this point. If you missed this one, it's best to move on.
Nearest Resistance: $14
Nearest Support: $10
Catalyst: Technical Setup
Meanwhile, department store retailer J.C. Penney (JCP) - Get J. C. Penney Company, Inc. Report is up more than 5% this afternoon thanks to a big technical breakout in shares. Penney has been flirting with the $10 level for the better part of the last year, failing on every successive test of that price ceiling along the way. But that changed last week, as JCP finally shoved its way above $10 for the first time over that stretch. That's an important buy signal for shares, and we're seeing it confirmed by today's bounce after a throwback to $10 last week.
The long-term nature of the JCP setup comes with equally long-term trading implications for shareholders. If you're looking for an opportunity to buy JCP, now looks like a good time -- the 50-day moving average looks like a logical place to keep a protective stop.
Nearest Resistance: N/A
Nearest Support: $38
Catalyst: Analyst Upgrade
U.S. Steel (X) - Get United States Steel Corporation Report is up more than 2% this afternoon, boosted by an analyst upgrade that's sending shares to new highs. Credit Suisse hiked U.S. Steel from underperform to outperform, doubling the firm's target price from a weak $25 level all the way up to $50. The upgrade report notes that X may even be worth as much as $60 versus the valuations being sported at peers right now. That's helping to break shares of this $38 stock higher to start the week.
X corrected last week, consolidating sideways to bleed off some of the overbought momentum that came on the heels of an earnings-induced breakout at the end of July. Today's push through the top of that trading range makes higher ground the high-probability trade in the next month.
-- 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