2 Hot Stocks to Trade (or Not)

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.

>>4 Reasons to Buy Stocks in 2013

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.

>>5 Stocks Hedge Funds Love -- and So Should You

These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

>>5 Stocks Under $10 Ready to Soar Higher

News Corp.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Nearest Resistance: $28.50
Nearest Support: $25.50
Catalyst: Earnings, Cut Expectations

News Corp. ( NWSA) is getting attention after earnings today, with shares down more than 2.3% as I write. No, that doesn't mean that the firm's numbers were bad -- only that Wall Street expected them to be better. All told, the firm earned $1.03 per share, meeting analysts' expectations for the quarter. The selling is coming as a result of a cut to the firm's 2013 expectations.

More important, today's price action points to more downside in shares. NWSA had been trending higher for all of 2013, failing to establish any meaningful support levels along the way. For that reason, the nearest strong pocket of demand for shares looks like $25.50, which is not something that investors want to hear right now. If you're looking for a place to jump into NWSA at lower levels, wait for it to find support first.


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Nearest Resistance: $10.60
Nearest Support: $9.40
Catalyst: Drug Sale

Last up is Elan ( ELN). The Irish drug maker got shellacked yesterday after announcing that it was selling its crown jewel pharmaceutical, multiple sclerosis treatment Tysabri, for $3.25 billion in cash. The move leaves Elan with huge cash reserves in its coffers, but without its most lucrative drug. Investors reacted by selling off shares by more than 7%.

Even though ELN is rebounding today, this stock is still well below where it opened yesterday. More importantly, shares remain definitively in the downtrend that they've been stuck in for months now. How management opts to use that huge cash balance in 2013 will to determine this stocks trajectory. But for now, I'd recommend staying arm's length away from Elan.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.


Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks 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.