7 Hot Stocks on Traders' Radars
BALTIMORE (Stockpickr) -- Forget the traditional ways 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. While crowdsourcing has long been a popular tool for the advertising industry, it 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.
>>5 Big Stocks to Trade for Gains
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 traders who want a starting point in their analysis.
Today, we'll leverage the power of the crowd to take a look at
seven of the highest-trending stock searches
on Google.
With earnings season in full swing this week, you can bet that earnings names are dominating today's list. Here's a look at how these most-searched names are
.
General Motors
Nearest Resistance: $26.70
Nearest Support: $25
Catalyst: Positive Earnings
First up this week is automaker
General Motors
(GM) - Get Report
, a stock that's surging on positive earnings news released yesterday. The firm announced full-year profits of $4.58 per share for 2011, up 58% from the previous year's numbers. That makes 2011 the most profitable year in GM's history. While fourth-quarter numbers fell short or analysts' estimates, the full-year results were enough to buoy shares early in yesterday's session.
That intraday rally is significant for GM. The move is pushing shares to test an important resistance level at $26.70, a price that's acted like a price ceiling for shares since the end of October.
Slightly shorter term, GM is forming a setup similar to a rising three methods pattern in Japanese candlesticks. While GM's setup is a bit more complex than the textbook pattern, the trading implications still bode well for shareholders.
If GM holds above $26.70 this morning (and it should), it could be a good opportunity to go long.
General Motors shows up on a recent list of
Stocks in Bottoming Sectors Primed for a 2012 Bounce
. It's also one of several
consumer staples stocks bought and sold by hedge funds
in the fourth quarter;
David Einhorn's Greenlight Capital
picked up 4.3 million new shares, for a total position of over 19 million.
Advance Auto Parts
Nearest Resistance: N/A
Nearest Support: $140
Catalyst: Positive Earnings
Continuing our car theme is
Advance Auto Parts
(AAP) - Get Report
, the $6.2 billion auto parts retailer. Shares are up more than 8% as of this writing thanks to positive fourth-quarter earnings numbers delivered to Wall Street yesterday. The news gapped shares of AAP dramatically higher in yesterday's session, putting the stock at a new
. That could carry over today.
>>4 Undervalued Auto Parts Stocks
is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.
Even so, I'd wait for AAP to find some support before buying this momentum mover.
Discovery Communications
Nearest Resistance: $45.25
Nearest Support: $43
Catalyst: Unfavorable Guidance
TV network operator
Discovery Communications
(DISCA) - Get Report
is drawing significant search volume following its own earnings call. Discovery beat earnings expectations for the fourth quarter after seeing advertising sales and carriage fees increase in 2011.
The firm, which operates its namesake Discovery Channel as well as portfolio of networks that includes TLC, Animal Planet, and the Military Channel, broke through to new 52-week highs yesterday on the news before reversing lower on guidance.
>>5 Stocks Poised for Breakouts
This week's price action is significant for Discovery. It puts shares within arm's reach of the $45.25
that's acted as a strong barrier for shares the last four times buyers attempted to ratchet their bids higher. A sustained breakout above that price level would be a good sign for DISCA investors.
While Wall Street's reaction to earnings is less than compelling, it doesn't change the fact that shares remain extremely close to that resistance level. Investors should keep a close eye on Discovery this week.
J.M. Smucker
Nearest Resistance: $77
Nearest Support: $67.50
Catalyst: Earnings Miss
Food product company
J.M. Smucker
(SJM) - Get Report
gapped down hard yesterday following fiscal third-quarter earnings numbers that fell well short of analysts' expectations. The firm reported earnings of $1.22 per share, shy of the $1.41 profit that analysts expected the company to make. Input costs have been a major drag on earnings in the most recent quarter, and Smucker isn't able to pass those costs on as quickly as the firm incurs them. Expect investors to keep a very close eye on margins going forward.
Smucker had been forming an ascending triangle setup for the past few months, bouncing in between resistance at the $81 level and uptrending support. But the setup never triggered, and the upside potential of that pattern got trounced by the stock's gap down.
A broken bullish pattern has negative technical implications for SJM in the near-term; investors would be advised not to go looking for a bargain in this stock until it finds some semblance of support.
Smucher is one of
Goldman Sachs' Consumer Stock Best Buys for 2012
.
VF Corp.
Nearest Resistance: N/A
Nearest Support: $140
Catalyst: Positive Earnings
No surprise,
VF Corp.
(VFC) - Get Report
is another firm that's getting earnings-related attention. The apparel company announced numbers yesterday, delivering double-digit revenue growth on the heels of strength in international markets.
After a strong session yesterday, this stock is still looking particularly strong from a
in February. This week's earnings news should help to keep that momentum going.
VFC had been bouncing its head on $140 resistance until shares broke through that level definitively last week. Even though shares are just consolidating above that level right now, once VFC bleeds off some of its overbought momentum, traders could have an opportunity to buy shares with limited risk.
When that happens, the 50-day
looks like a good place for a protective stop.
VF Corp. was one of the
10 Best-Performing S&P 500 Stocks of 2011
and shows up on a list of
7 Best Long-Term Stock Picks by Morgan Stanley
.
Blue Nile
Nearest Resistance: $41
Nearest Support: $31.80
Catalyst: Earnings Miss
It's been a challenging year for online jewelry retailer
Blue Nile
(NILE)
. In the last 12 months, the firm has seen its shares drop by more than 35% as weak demand for high-end jewelry continued to plague the firm's top line.
This week's earnings release brought more of the same. Even though the firm saw reasonably strong customer acquisition in the fourth quarter, lower sales volume spurred a selloff in shares to the tune of 10% yesterday.
Technically, NILE remains stuck in the volatile range it's been in since November, in between resistance at $41 and support at $31.80. While yesterday's action was painful for shareholders, it doesn't have any sort of dramatic impact on NILE's technicals.
That said, barring a push outside of that trading range, I'd suggest sitting on the sidelines of this stock for now.
Blue Nile shows up on a list of
6 Retailers Banking on a New CEO in 2012
.
Nvidia
Nearest Resistance: $18
Nearest Support: $16
Catalyst: Mixed Earnings
Nvidia
(NVDA) - Get Report
released its earnings data after the close on Wednesday, prompting a particularly wide-ranging session for shares yesterday as traders decided that they hated the numbers in the morning, then started liking them a lot more by the afternoon. Today should come with some interesting action of its own for this stock.
That reversal is fortuitous for NVDA shareholders -- the stock has been forming an ascending triangle bottom since the end of August, a setup that tentatively broke out late last week when shares cracked $16 resistance.
While Thursday's open threatened to break the setup, it looks like a close well above resistance will put this pattern back on track. Now might be a good opportunity to go long NVDA with a tight stop in place.
To see these stocks in action, check out the at
Most-Searched Stocks portfolio
on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
RELATED LINKS:
>>6 Stocks Funds Love for 2012
>>5 Earnings Stocks Poised to Pop
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At the time of publication, author had no positions in stocks mentioned.
Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
