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.
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.
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.
Nearest Resistance: $7.50
Nearest Support: $6.50
Catalyst: Earnings Miss
Finnish cell phone maker Nokia (NOK) is getting hammered 9% lower this afternoon following an earnings miss capped off by a 29% decline in the firm's handset sales. All told, the firm ended the final quarter of 2013 by losing $34 million. While NOK had been in rally mode for the better part of the last year, today's big gap down wipes out the uptrend in shares.
From a technical standpoint, today's decline is triggering a double top setup in NOK. While there's support down at $6.50, this trade's downside target goes as far as $6.25. That's reason enough to shy away from shares of NOK in January. A quick rebound in shares looks unlikely.
Nearest Resistance: $11
Nearest Support: $9
Catalyst: Nokia Sympathy Move
Shares of BlackBerry (BBRY) are off around 6% this afternoon, but the high volume drop is really just a sympathy move to today's big earnings-induced slide in Nokia. BBRY is in the same boat as Nokia right now -- once a dominant handset maker, it's been trying to regain its former glory to little success. So today's selling comes on fears that BlackBerry will post some Nokia-like declines when it announces its numbers on March 28.
The big difference is that the uptrend in BlackBerry is still technically intact. Nokia may have lower ground ahead of it, but BBRY looks like it's just correcting at $11 on the way higher. Until trendline support gets taken out, traders should buy the dips. Just keep a tight stop in place.
Nearest Resistance: N/A
Nearest Support: $380
Catalyst: Earnings Beat
Netflix (NFLX) is one of the names that's beating the market's slump this afternoon. Shares of the streaming video service are up more than 16% as I write, after piling on millions of new subscribers and posting net profits of 79 cents per share. Analysts were only hoping for 66 cents. The news gapped shares up to open at $387.40 this morning, a new all-time high for NFLX.
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 be a buyer here, Id recommend keeping a tight stop in place.
Nearest Resistance: $26
Nearest Support: $22
Catalyst: Earnings Follow-through
Even through SLM (SLM) announced earnings a week ago, the drop in shares is carrying over to today's 4.87% loss. SLM fell 9 cents shy of analysts' expectations in its quarterly call, and this stock has been in free-fall ever since. While shares had spent most of the last year in an orderly uptrend, that "buy the dips" scenario broke when SLM opened below its 50-day moving average on Jan. 16.
From here, it still makes sense to avoid shares. Bargain-hunters may get a chance to buy closer to $22 support, but I'd recommend waiting for SLM to carve out a meaningful base before thinking about putting money on this trade.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.