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: $16
Nearest Support: $14
Catalyst: Q2 Earnings
Diversified financial name Genworth Financial (GNW) - Get Report is selling off 10% this afternoon on big volume, the result of bad news in a second-quarter earnings call. While profits were up at GNW, CEO Tom McInerney said that Wall Street was overly optimistic about reserve remarks made in December. Now it's possible that claim reserves may need a material ramp-up before the third quarter.
Technically speaking, GNW had been looking positive all year long, giving buyers a low-risk opportunity to build their positions on each test of trend line support. But today's big breakdown means that the prior trend is over, and Genworth isn't a name that you'd want to own anymore. Support at $14 could be the next stop for this stock.
Nearest Resistance: N/A
Nearest Support: $128
Catalyst: Q2 Earnings
Biotech name Amgen (AMGN) - Get Report is breaking out to new highs today, after the firm reported its second-quarter numbers to Wall Street. While analysts were looking for profits of $2.07 per share on average, the firm actually generated comparable profits of $2.37 for the second quarter, on top of boosted earnings guidance for the full year of between $8.20 and $8.40 per share. Amgen also announced a restructuring plan that will involve facility closures and 2,400 job cuts, a move that pulls considerable costs out of its business ahead of new drugs coming to market.
New highs are significant from an investor psychology standpoint because they mean 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. If you decide to buy here, keep a tight stop in place.
Nearest Resistance: $74
Nearest Support: $62
Catalyst: Earnings, Downgrades
Eaton (ETN) - Get Report can't catch a bid this afternoon. The firm sold off yesterday thanks to an earnings miss, and shares are following that up today thanks to a pair of analyst downgrades from JPMorgan and Deutsche Bank.
While Eaton has been a textbook "buy the dips" stock for the last 12 months, yesterday's big breakdown broke the uptrend. Now this stock looks pointed lower for August, with the next closest meaningful support level down at $62.
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