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.
So, today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market...
VanEck Vectors Gold Miners ETF
- Nearest Resistance: $23
- Nearest Support: $19
- Catalyst: Gold Prices
Up first on our list of the week's most actively traded stocks is the VanEck Vectors Gold Miners ETF (GDX) - Get Report, a $9 billion exchange-traded fund that continues to be one of investors' favorite ways to get exposure to gold prices. That's not necessarily been a good thing lately, though, as this big ETF peaked back in August, and it's been in a well-defined downtrend ever since.
While Friday's 3.68% drop in GDX looks unappealing, the downside risk with the downtrending channel is actually a lot larger. Until GDX can catch a bid above that red channel in the chart above, you don't want to own it.
- Nearest Resistance: $4
- Nearest Support: $3
- Catalyst: Takeout Rumors
Energy driller Seadrill (SDRL) - Get Report ended Friday on a high note, rallying more than 12% during the final trading session of the week on rumors that the company could be a private equity takeout target. The rumors originated on Twitter -- and investors should take them with a grain of salt -- but they were enough to make last week a 29% upside move in total. Seadrill has actually been looking bullish longer than that, taking a turn for the better on the heels of higher oil prices and better earnings numbers at the end of November.
From a technical standpoint, Seadrill is in breakout mode. Shares moved above the top of their downtrend coincident with earnings at the end of November, making a reversal the high-probability trade. Investors who haven't already pulled the trigger on SDRL should wait to see if shares can catch a bid above $4 before jumping into this stock.
Twenty-First Century Fox
- Nearest Resistance: $28.50
- Nearest Support: $27.50
- Catalyst: Sky Buyout
Twenty-First Century Fox (FOXA) - Get Reportended the week on big volume, correcting slightly in Friday's trading session, following the announcement that the firm had reached a deal to acquire full control of satellite carrier Sky Plc for approximately $14.1 billion. Previously, Fox held a 39% stake in Sky, and the firm had previously attempted to acquire the remaining shares until internal turmoil derailed the deal. Fox is paying approximately a 40% premium for those remaining shares of Sky.
Technically, Fox looks attractive here, although shares failed to catch a bid above resistance at $28.50 by the time the trading session ended. If you're looking for a buying opportunity in Twenty-First Century Fox, wait for shares to clear that $28.50 price ceiling before you buy. From there, consider parking a stop at the 200-day moving average.
- Nearest Resistance: $18
- Nearest Support: $17.50
- Catalyst: Acquisition
$2 billion mining stock Stillwater Mining (SWC) ended the week with a big gap higher, rallying about 18% on Friday on news that the firm was being acquired by South African gold miner Sibanye Gold, one of the largest gold producers in the world, in a deal worth $18 per share in cash.
Following Friday's close, Stillwater trades for about a 3.9% discount to its offer price, indicating that the market is largely pricing in the Sibanye deal getting done. Put simply, the money has already been made on this trade - investors should look elsewhere for upside opportunities in December.
- Nearest Resistance: $13.25
- Nearest Support: $12.50
- Catalyst: Technical Setup
Ford (F) - Get Report ended the week on big volume, moving 1% higher on the heels of a positive technical move. Ford has been enjoying significant tailwinds as investors price in the potential benefits of a Trump administration on U.S.-based automakers -- shares are up about 14% since election day.
That higher ground has been defined by a tight, short-term utprending channel, a price setup that's still intact as I write this week. Ford's next important barrier comes into play at $13.25 resistance; if shares can catch a bid above that price tag, expect the uptrend to persist for quite a while beyond that.
- Nearest Resistance: $118
- Nearest Support: $110
- Catalyst: Technical Setup
Tech giant Apple (AAPL) - Get Reporthas been catching a bid this week, rallying as shares touched trendline support for the sixth time since Apple bottomed back in May. The fact that Apple's uptrending channel remains intact this month bodes well for followers of this technology giant.
Apple has been trailing the rest of the S&P 500 during the recent "Trump rally" but this week's bounce off of long-term trendline support suggests that shares could be about to make up for lost time in the week ahead.
Now looks like a good time to pull the trigger on an Apple buy, but be sure to keep a tight stop in place just below the bottom of that trend channel.
- Nearest Resistance: $9
- Nearest Support: $8.20
- Catalyst: Acquisition Rumors
Finally, Rite Aid (RAD) - Get Reportended the week 3.6% higher on big volume, boosted by rumors the firm's pending buyout by Walgreens Boots Alliance (WBA) - Get Reportcould finally be close to getting finalized. (WBA is a holding of Jim Cramer's Action Alerts PLUS.)
Reports cited antitrust attorneys and a pharmacy benefit manager consultant, who say that Walgreens is close to putting together a divestiture package that the Federal Trade Commission will approve, potentially giving the deal the green light by year-end.
Rite Aid popped above long-term resistance at $8.20 on Friday, partially closing the gap to its $9 cash buyout price. As of Friday's close, there's still a 6.6% discount to that offer price, which means there's a small profit opportunity left in Rite Aid shares for traders who want to play the merger arbitrage game.
At the time of publication, author had no positions in the stocks mentioned.