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: N/A
Nearest Support: $92.50
Catalyst: Takeover Offer
TRW Automotive (TRW) is up on big volume for the second straight session after the firm acknowledge that it was considering a takeover offer. The buy offer came from German parts supplier ZF Friedrichshafen, and would create the world's second-largest auto parts supplier if approved. According to sources, ZF values TRW at between $11 billion to $12 billion, putting TRW's current valuation along the bottom of that range.
Shares broke out above the top of their uptrend on the takeover news, sending a clear signal that buyers are in control of this automotive name right now. While that's a buy signal, traders should take note that there's still a whole lot of event risk in TRW once the financials of the deal do get disclosed.
Nearest Resistance: $8.50
Nearest Support: $7.75
Catalyst: FHFA Rule Change
Mortgage insurer MGIC Investment(MTG) - Get Report is down 11% on big volume this afternoon, following news that the Federal Housing Finance Agency is proposing new rules that would require MTG to fill a big capital gap to stay in business. The added capital requirements would decrease MTG's returns on investment. MTG is just one of many names in the industry that's getting hammered lower on the news.
From a technical standpoint, things look ugly in MTG. While shares had been bouncing their way higher in a well-defined uptrend for the better part of the last year, today's breakdown has officially put an end to that trend. Support at $7.75 looks reasonably strong, but don't count on higher ground anytime soon.
Nearest Resistance: $1
Nearest Support: $0.65
Catalyst: Acquisition Term Changes
Brazil's Oi (OIBR) is up 6% today, following news that the ugly $1.2 billion in Rioforte commercial paper held by acquisition target Portugal Telecom could force a better merger deal for Oi shareholders. Shares corrected hard on weakness in Portuguese stocks this week, but the potential for a more favorable share swap rate is sending buyers back into OIBR.
The bounce in OIBR is cold comfort for shareholders. Technically speaking, OIBR looks about as bad as any chart imaginable. Shares are dropping parabolically this summer, and no real semblance of support is in sight. Caveat emptor.
Nearest Resistance: $17.50
Nearest Support: $14.50
Catalyst: FHFA Rule Change Genworth Financial(GNW) - Get Report is another name that's getting hit lower as a result of the FHFA rule change that mandates additional capital requirements for mortgage insurers. Shares of GNW are only down 3% this afternoon, thanks in large part to this firm's diversified revenue streams -- mortgage insurance is a smaller part of GNW's business than most of its peers.
That doesn't change the fact that the chart is awful in GNW right now. Shares broke a textbook uptrend at the start of July, and they've been in falling ever since. Stay away from GNW until it's able to catch a bid again.
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