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: $55
Nearest Support: $45
Catalyst: Q2 Earnings
Twitter (TWTR) - Get Twitter, Inc. Report is grabbing all of the headlines today after the firm announced its second-quarter earnings after the closing bell on Tuesday. Shares are up more than 20% this afternoon as a result. Twitter generated revenues of $312 million for the quarter, stomping analysts' average $282 million estimate. More important, active membership grew to 271 million active users, demonstrating a consistent growth rate compared to the previous year.
From a technical standpoint, this week's earnings call could be an even bigger deal going forward. That's because shares broke out above trend line resistance this morning, ending a prolonged downtrend in TWTR, and indicating a major change in trend. Despite the size of the move, this breakout looks buyable once Twitter establishes some semblance of support.
Nearest Resistance: N/A
Nearest Support: $28
Catalyst: Q2 Earnings
Mid-cap steel producer U.S. Steel (X) - Get United States Steel Corporation Report is another name that's rallying hard this afternoon, up 18% following a surprise profit. U.S. Steel earned 17 cents per share for the quarter, stomping the 31-cent loss that analysts were expecting. Even better, the firm expects to see significant flat rolled steel growth in the third quarter, a hint that bigger profits are on the horizon.
X's price chart is nearly identical to the one in Twitter. After selling off consistently for the last year in a well-defined downtrend, this morning's gap higher at the open means that the downtrend is broken. It makes sense to be a buyer in U.S. Steel once the smoke clears.
Nearest Resistance: $13
Nearest Support: $11.50
Catalyst: REIT Spinoff
Shares of Windstream Holdings (WIN) - Get Windstream Holdings, Inc. Report are seeing their second straight big-volume session, following news that the firm plans to spin off parts of its telecom network into a publicly traded real estate investment trust, or REIT. WIN opened higher on Tuesday, but the gains bled off over the course of the session. We're seeing a continuation of that with today's 3.3% decline.
That doesn't mean that WIN is headed much lower, however. This stock fared well earlier in the year, thanks to a flight to yield earlier in the year. And while shares have bled off most of their early momentum from yesterday, the uptrend in WIN remains very much intact. Now shares are testing support at $11.50. If WIN bounces off of that $11.50 level today, then it's buyable. Otherwise, buyers should look to get in near long-term support at $10.50.
For another take on WIN, check out "Windstream Holdings in a Perilous Reversal."
Penn West Energy
Nearest Resistance: $8.75
Nearest Support: $7
Catalyst: Accounting Probe
Canadian exploration and production company Penn West Energy (PWE) is down more than 15% this afternoon, dragged lower by news of an accounting probe that could delay the firm's second-quarter results. Shares of PWE aren't helped by the fact that this stock has been forming a bearish reversal setup for the last three months. Today's violation of support at $8.75 is a sell signal.
There's a lot of event risk in trading PWE right now. Positive or negative news relating to the accounting probe could slingshot shares in either direction. That said, if left to their own devices in the intermediate term, a test of support at $7 looks likely.
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