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.
- Nearest Resistance: $3.50
- Nearest Support: $3
- Catalyst: Court Ruling
Beaten-down solar stock SunEdison (SUNE) ended Friday on big volume last week, climbing 32% higher following a ruling from a Delaware judge that David Tepper's Appaloosa Management can't block a key part of the firm's pending buyout of residential solar firm Vivint Solar (VSLR) - Get Report . The ruling removes a major possible roadblock from the deal happening, a catalyst that investors are hoping will help turn SunEdison's fortunes around. This stock is still down 89% in the last year, even with Friday's big rally factored in.
Technically speaking, shares of SunEdison aren't in the clear yet. This stock has been in a downtrend over the long-term, and shares are still stuck in that downtrend now. SunEdison would need to break out above $3.50 to break free of that downtrend -- and, long-term, it makes sense to steer clear of the long side of this stock until shares can catch a bid above that price channel again.
- Nearest Resistance: $10¿
- Nearest Support: $6¿
- Catalyst: Q4 Earnings
Natural gas producer Southwestern Energy (SWN) - Get Report dropped 5.8% on big volume Friday, slipping following its own fourth-quarter earnings results. Southwestern Energy actually lost less money than expected, reporting a 2-cent per share loss versus the 4.1-cent loss than analysts were estimating. But management's commentary didn't paint a rosy picture for the natural gas business in 2016, and that spooked investors who were hoping for a dramatically more auspicious earnings call.
Meanwhile, shares actually could look worse from a technical standpoint right now. Southwestern Energy is in a nascent uptrend since last December, making higher lows ever since. As long as that uptrend holds, it's early to sell this natgas stock.
- Nearest Resistance: $4
- Nearest Support: N/A
- Catalyst: Q4 Earnings
Independent oil and gas company Whiting Petroleum (WLL) - Get Report ended the week up 10% on big volume. Unfortunately for Whiting shareholders, the stock had already broken down at the start of the week, violating a key support level at $4 before reporting an earnings miss on Wednesday that saw Whiting report a 43-cent loss that was worse than Wall Street had expected. That makes Friday's bounce look like too little too late.
With $4 support taken out, look out below. Whiting could see lower level in the near-term.
Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.