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. With that in mind, today we're taking a look at some of the most active stocks on the market.
Nearest Resistance: $21
Nearest Support: $20.85
Jewelry stock Zale (ZLC) is up more than 40% in this afternoon's trading, after news hit that the small-cap firm was being acquired by Signet Jewelers (SIG) in a deal worth approximately $1.4 billion. That's an offer price of $21 per share for ZLC, a target price that currently leaves a tiny 0.52% risk premium left over in shares.
So even though ZLC gapped up hard on the news today, the technical story doesn't really matter any more in this trade. The money has already been made on the ZLC side of things -- and the 52 basis points left in shares really only leaves room for professional merger arbitrageurs, not retail investors.