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 thats 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.
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.
Nearest Resistance: $5.50
Nearest Support: $5
Catalyst: Q3 Earnings
Shares of retail drugstore chain Rite Aid (RAD) are off more than 9% this afternoon, following the firm's third-quarter earnings release this morning. RAD earned 4 cents a share for the quarter, but it estimated that the best-case scenario for next quarter's earnings would be the bottom of analysts' forecasts. That's what spurred the selloff.
From a technical standpoint, today's big gap down is a big problem for shareholders. The move pushed shares through previous support at $5.50, bringing RAD down for a test of a much more significant level at $5. If this drugstore can't catch a bid at $5, look out below.
Nearest Resistance: N/A
Nearest Support: $35.50
Catalyst: Q2 Earnings Beat
Meanwhile, Oracle (ORCL), earnings are an upside catalyst today. The enterprise software maker is up 5.4% as I write, after posting quarterly earnings of 69 cents per share after yesterday's closing bell. The numbers came in 2 cents higher than analysts had predicted. Better, the firm guided above the range analysts were expecting for next quarter. The news is pushing shares to new 52-week highs in today's session.
Making new highs is significant from an investor psychology standpoint because it means 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 take the trade, I'd recommend keeping a tight stop in place.
Nearest Resistance: $12.50
Nearest Support: $11
Catalyst: Analyst Outperform Rating
Groupon (GRPN) is up 2.5% this afternoon, following a new analyst outperform rating from Northland Capital Markets earlier this week. Groupon has been an anxiety-inducing stock since its IPO, swinging wildly as investors questioned the premium price tag on shares. The $13 price target added to GRPN should help quell some of those fundamental business fears.
The technicals look pretty strong in GRPN now too. Shares broke their three-month downtrend last week, pushing above resistance at $11. While the new uptrend in Groupon isn't exactly established yet, shares have a shot at testing highs at $12.50 this month. A move about $12.50 is a pretty strong buy signal for the daily deal site.
Nearest Resistance: $10
Nearest Support: $8
Catalyst: Technical Setup
You don't need much of a reason to sell J.C. Penney (JCP) -- at least that's been the common wisdom this year. JCP is down 3.4% on high volume this afternoon, a move that's being triggered more by the big technical setup in shares than any fundamental news. Shares of JCP are testing key support at $8, a level that's the last line of defense between current levels and the year's lows $6.25.
For now, $8 looks like it's holding -- but if shares close materially below that price this afternoon, considerable selling could be on the way.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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