
6 Big Stocks to Add to Your Buy List -- Plus 1 to Avoid
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.
SPDR S&P 500 ETF
- Nearest Resistance: N/A
- Nearest Support: $207.50
- Catalyst: New Highs
We're leading things off once again with the SPDR S&P 500 ETF (SPY) - Get Report , investors' favorite proxy for the big S&P 500 index. SPY hit new all-time highs for another consecutive session, bringing the $190 billion ETF's total returns to 6.4% since the start of the year.
Even though SPY's gains have been fading since the open this morning, shares remain well-positioned to extend their uptrend this summer even as SPY tests the top of its uptrend. A lack of meaningful resistance to the top-side here means that it's not too late to be a stock buyer.
Teva Pharmaceutical Industries
- Nearest Resistance: $56
- Nearest Support: $48
- Catalyst: Allergan Deal
$50 billion drug stock Teva Pharmaceutical Industries (TEVA) - Get Report is up 4% on big volume this afternoon, attracting buying pressure after CEO Erez Vigodman said that he expected the firm's $40.5 billion purchase of Allergan's (AGN) - Get Report generics business to close any day. The announcement came on the heels of a preliminary second-quarter outlook that also came in better than expected at Teva.
That one-two punch of positive news is breaking Teva free of the downtrend that's harangued this stock since last December. Shares look buyable now that the downtrend has been violated. If you decide to be a buyer here, consider parking a protective stop at the 50-day moving average.
Allergan is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AGN? Learn more now.
ArcelorMittal
- Nearest Resistance: $6
- Nearest Support: $4.25
- Catalyst: Technical Setup
Shares of steel producer ArcelorMittal (MT) - Get Report are correcting on big volume this afternoon, shedding 2% as of this writing.
Despite the downside, ArcelorMittal's longer-term technicals actually look solid, as shares come off their latest test of long-term resistance up at $6. Put simply, if shares can catch a bid above their $6 price ceiling, then we've got a fresh signal that ArcelorMittal's uptrend is ready to kick off a second leg higher and it's time to buy.
Wait for $6 to get taken out before jumping into this steel trade.
U.S. Oil Fund
- Nearest Resistance: $12
- Nearest Support: $10.50
- Catalyst: Crude Prices
Commodities continue to be in play this summer -- and that's driving big volume in shares of the U.S. Oil Fund (USO) - Get Report , a $3 billion exchange-traded fund that stands out as investors go-to option for getting exposure to crude oil prices.
Technically speaking, today's nearly 4% big-volume drop in USO is concerning. Shares actually violated their uptrend back at the beginning of this month, signaling the likelihood of a correction. At this point, it's anyone's guess whether that will come in the form of a sideways churn before a second leg higher, or something more painful. Either way, the uptrend violation means that investors should avoid buying USO or adding onto most energy plays in July.
Juno Therapeutics
- Nearest Resistance: $50
- Nearest Support: $27.50
- Catalyst: Trial Resumed
After tumbling a week ago, biotech company Juno Therapeutics (JUNO) is up nearly 15% on big volume, following the FDA's approval to allow its leukemia study to resume. Last week, the study was halted due to the deaths of three patients receiving the trial blood cancer treatment, sending shares down to multi-month lows. Investors are treating the good news with caution, with shares of Juno remaining at a discount to their starting point at the beginning of the month.
Technically speaking, Juno Therapeutics could look worse. Shares have made higher lows in 2016, and while the wide price range adds some risk to the equation for Juno, the fact that shares are still in the lower-third of their new price channel does tamp down some of that risk. If you decide to be a buyer here, be sure to keep a tight stop in place.
Nokia
- Nearest Resistance: $6.60
- Nearest Support: $5.70
- Catalyst: Samsung Patent Deal
Nokia (NOK) - Get Report is breaking out today, up 5% following news that the firm had expanded a patent deal with Samsung to include additional portfolios. The company expects net sales from patent and brand licensing to reach a run rate of 950 million euros by the end of 2016, outpacing analysts' expectations.
Today's 5% jump in shares may not be huge, but it's material. That's because it's finally clearly breaking Nokia free of the downtrend that shares have remained stuck within for almost all of 2016. From here, higher ground looks likely this summer.
PayPal
- Nearest Resistance: $41
- Nearest Support: $35
- Catalyst: Technical Setup
Last up on our list of big-volume movers today is payments stock PayPal (PYPL) - Get Report .
PayPal's overall trajectory has been higher so far in 2016, but year-to-date, most of the price action has consisted of "easy moves." That's changing this summer, as PayPal moves up to test a meaningful price ceiling up at $41 resistance. Shares have tested that $41 three times in the last year and failed to catch a big materially above that level each time. If PayPal can break out above $41 here, consider it a strong signal to join the buyers.
PayPal is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. Cramer and Research Director Jack Mohr recently wrote:
We continue to remain on the sidelines with PYPL until we are provided more visibility around the regulatory environment in digital payments. Increased uncertainty in single stocks is not something we want to dip further into with the broader market worried about macro uncertainty. While we believe the core business is well-positioned to succeed given growth in payments and the company's ability to innovate, we need more information on the risks.
Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
















