4 Big Stocks to Trade (or Not)


BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. Its time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

>>5 Active Trades for a Quiet Month

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. Its 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, well 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. Thats especially true now that earnings season is officially underway. And when theres a big catalyst, theres often a trading opportunity.

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

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

Bank of America

Nearest Resistance: $17.25
Nearest Support: $16.75
Catalyst: Q4 Earnings Hangover

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Even though 2014 has kicked off to a slow start for most stocks, Bank of America (BAC) is enjoying some impressive momentum year-to-date; shares are up 9.5% since the calendar flipped over to January. Shares popped yesterday on bullish fourth-quarter earnings news; the firm earned 29 cents per share, a full cent better than analysts were expecting. So even though shares are experiencing a 0.7% hangover as I write this afternoon, things still look very strong in BAC.

That's even more true when it comes to BofA's technicals. Shares of the big bank are in an indisputable uptrend right now, shoving their way to new highs in yesterday's session. While shares are correcting now, support is stronger at $16.75 than BAC's price ceiling is at $17.25. Buy the dips.


Nearest Resistance: $55
Nearest Support: $52
Catalyst: Q4 Earnings

>>5 Hated Earnings Stocks You Should Love

Despite higher earnings for the fourth quarter, Citigroup (C) is getting punished for missing estimates this afternoon. The firm earned 85 cents per share for the quarter, but analysts were looking for 95 cents of profitability. Bank of America's positive surprise this week didn't likely help temper expectations for Citi -- and shares are down 4% and change as a result today.

From a technical standpoint, Citi could look a lot worse right now, but its chart is far from the textbook uptrend in BofA. Instead, Citi has been consolidating sideways in a wide range since last summer, and attempting to break out of that range since the calendar flipped to 2014. Today's selling means that we'll probably see shares spend more time in trader purgatory. As a trade, BofA is the buyable big bank right now.


Nearest Resistance: $3.80
Nearest Support: $3.40
Catalyst: Options Volume

>>5 Rocket Stocks to Stomp the S&P in 2014

Things are looking pretty rough in shares of Zynga (ZNGA) today. The online game maker is down more than 8% this afternoon on the heels of some unusual options volume. The move looks particularly painful this month because it's triggering a descending triangle pattern in shares.

From here $3.40 looks like the next reasonable support level for shares, but buyers should be cognizant of the potential for earnings-induced volatility on Feb. 3.


Nearest Resistance: $29
Nearest Support: $26.50
Catalyst: Q4 Earnings

CSX Corporation (CSX) is getting pushed 7% lower this afternoon following fourth-quarter earnings numbers that missed the mark. CSX earned 42 cents per share in the last quarter, but analysts were expecting 43 cents. Even though it was a slim miss on the surface, a reduction in coal transport volume tacked extra selling into today's session.

Technically, this chart is broken. While CSX had been in a well-formed uptrend for the last six months, today's gap lower broke the uptrend. That's a good indication that you don't want to own this stock in the intermediate term. Support is nearby at $26.50, but sellers could take this stock even lower.

-- 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

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