4 Big Stocks on Traders' Radars

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.

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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.

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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.

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Nearest Resistance: $31.50
Nearest Support: $30
Catalyst: Q4 Earnings Miss

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Oracle ( ORCL) is the victim of some bad timing today. Shares of the software giant are off by more than 8% in this afternoon's session after the firm announced fourth-quarter earnings that were more or less in line with Wall Street's estimates. The bad timing came from posting a miss the day after a critical technical break in the S&P. As most stocks get dragged down today, ORCL is getting dragged a little harder.

From a technical standpoint, ORCL doesn't look good. Shares gapped down hard this morning, pushing ORCL down to support at $30. While that round number level is acting like a stop to the selling intraday today, I wouldn't put too much hope on holding back sellers at that level just yet. Wait for some consolidation before trying to establish a position.

Sprint Nextel

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Nearest Resistance: $7
Nearest Support: $6.30
Catalyst: Abandoned Acquisition Bid

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On the other hand, shares of mobile phone carrier Sprint Nextel ( S) are actually holding up pretty well considering the news hitting investors this morning. Suitor Dish Network ( DISH) is officially abandoning its acquisition bid for the carrier, withdrawing its competition with Japan's Softbank. The news leaves the possibility of a ramped-up bidding war off the table, but it leaves DISH still in the running for Sprint subsidiary Clearwire ( CLWR).

While technical support at $6.30 is pretty far from Sprint's last trade price, shares have a "hard" support level made by the Softbank offer. Shares aren't like to trade for much more of a discount to the $7.65 per share offer price than they already are. That leaves a little room for merger arbitrageurs to take a position in Sprint Nextel right now.


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Nearest Resistance: $49
Nearest Support: $42
Catalyst: Q1 Earnings Miss

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Shares of car dealership giant CarMax ( KMX) have been fading over the course of today's session, pushed lower despite the fact that the firm earned record profits for the first quarter. Analysts had been expecting earnings of 58 cents per share; KMX posted earnings of 61 cents instead. While it looks like shares are starting to reverse higher this afternoon, the huge red candlestick on KMX's chart is reason to be extra cautious with CarMax shares right now.

At this point the uptrend in KMX is broken. That's reason enough to stay away from a long standpoint. I'd advise shorts to keep a protective stop just above the 50-day moving average; volatility is up in KMX, and that could produce some wide swings.

Darden Restaurants

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Nearest Resistance: $52
Nearest Support: $49
Catalyst: Q4 Earnings Miss

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The situation is a little more clear-cut in shares of Darden Restaurants ( DRI). Darden missed its consensus estimate of $1.04 by a couple of cents, earning $1.02 for the final quarter of its fiscal year. Darden's miss was small, but the resulting price action is pretty material. The 3.5% drop in shares today is a continuation from an important technical break in yesterday's trading session.

Darden went into June looking "toppy." The $52 level was acting as an important support price for shares, holding up DRI's price on the last couple of attempts below that level. But yesterday brought a breakdown, and so it's no surprise that today's barely-there earnings miss is being interpreted negatively. On the upside, support at $49 looks pretty strong right now; if shares can catch a bid at $49, it looks like a decent low-risk entry point.

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 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.

Follow Jonas on Twitter @JonasElmerraji