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.
Nearest Resistance: $1.65
Nearest Support: $1.20
Catalyst: Zohydro Sale, Earnings
Investors didn't like this week's announcement from Zogenix (ZGNX) - Get Report that the firm was planning on selling its Zohydro ER pain management treatment to Pernix for a combination of cash, stock and milestone payments. Zogenix came in a penny lower than expectations on earnings, but it's the absence of the Zohydro business that's concerning investors here.
While ZGNX had been moving higher in a parabolic uptrend, yesterday's news scuttled that price action, and shifted shares lower. Caveat emptor.
Nearest Resistance: $54
Nearest Support: $50
Catalyst: Stress Tests
Citigroup (C) - Get Report got a 2% pop in Wednesday's session, boosted by the revelation that the $155 billion banking stock had the cleanest stress test pass from the Fed, and more importantly, that its capital plan was approved. After a rough go at last year's stress tests, investors are excited about the prospect that Citi now has a much firmer grip on what regulators want to see -- and that the bank will be able to return more capital to shareholders as a result.
From a technical standpoint, Citi's chart isn't that compelling. Shares are catching a bid this week, but they're still well shy of the $54 resistance level where they started the week.
Nearest Resistance: $55
Nearest Support: $27.50
Catalyst: Technical Setup
Beleaguered Lumber Liquidators (LL) - Get Report caught a bid for the second day in a row yesterday, bouncing more than 10%. The move came in spite of updates on the firm's ongoing toxic laminate floor debacle, including news that two states' attorneys general would begin their own investigations into the firm's products.
That sign of strength this week isn't a buy signal. While shares formed a v-bottom on March 9, this stock still has huge event risk to contend with. It's best avoided for all but the most experienced of short-term traders.
Nearest Resistance: $39
Nearest Support: $37
Catalyst: Suspected Bird Flu
Finally, Tyson Foods (TSN) - Get Report took a 5.6% hit on Wednesday, smacked lower on news that the U.S. government had confirmed a case of bird flu in Arkansas. Tyson, the largest chicken producer in the country, is based in Arkansas. While the firm's spokesman said that no flocks grown for Tyson had been diagnosed with bird flu, the possibility of spread and statewide export bans to major buyers (such as Mexico) have the potential to materially impact TSN's quarter.
Tyson had been in an uptrend since this summer, but that ended with yesterday's big break of prior support up at $39. From here, lower levels look likely -- and event risk remains very high for TSN in March.
At the time of publication, author had no positions in stocks mentioned.