4 Big 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.

>>5 Big Trades to Take in February

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.

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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, heres a look at today's stocks.


Nearest Resistance: $55
Nearest Support: $40
Catalyst: Post-Earnings Bounce

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Shares of popular microblogging service Twitter (TWTR) are getting a reprieve from yesterday's selloff, as the stock bounces around 5.7% higher this afternoon. Twitter sold off hard in yesterday's session, after the firm announced user growth that was slower than Wall Street expected. Today, buyers are reasoning that maybe growth rates weren't that bad.

Technically, Twitter's chart is in trouble. Former support at $55 is now a pretty substantial resistance level that shares will need to contend with on the way up. Unless buyers can overpower the sellers at that level, I'd recommend staying away from TWTR from now.


Nearest Resistance: N/A
Nearest Support: $62.50
Catalyst: Twitter Sympathy Move

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The exact opposite is taking place in shares of social media peer Facebook (FB). FB is profiting from Twitter's rebound in a sympathy move that's pushing the social network up 3.5% in this afternoon's session. More important, it's enough to push FB to new highs in February, a move that has considerable importance from a technical standpoint.

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, I'd recommend keeping a tight stop in place.

Activision Blizzard

Nearest Resistance: N/A
Nearest Support: $18.50
Catalyst: Q4 Earnings

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Video game giant Activision Blizzard (ATVI) is up more than 16% this afternoon, the result of a better-than-expected quarter. The firm reported adjusted earnings of 79 cents per share, stomping the 9 cents that analysts were expecting. Today's price action isn't just big on an absolute basis -- it's also a key move from a technical standpoint.

Today's buying pressure is shoving ATVI above the trading range that shares have been stuck in since the end of July. Like with Facebook, the new highs in Activision are buyable today. Keep a stop under $18.50.

ON Semiconductor

Nearest Resistance: N/A
Nearest Support: $9
Catalyst: Q4 Earnings

ON Semiconductor (ONNN) is another name that's seeing new highs today on earnings news. The mid-cap semiconductor component maker is up 8.3% on big volume this afternoon, after posting earnings of 17 cents. Profit number comes in at 3 cents higher than analysts' consensus estimate.

While the new highs in ONNN are bullish for the same reasons as the breakouts in FB and ATVI, the one caveat is the fact that this stock is still trading within the same wide ranging price channel it's been in since October. Buyers who want to step in here should watch out for a bounce off of trend line resistance.

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. Follow Jonas on Twitter @JonasElmerraji

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