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, heres a look at today's stocks.
Freeport-McMoRan Copper & Gold
Nearest Resistance: $34
Nearest Support: $31
Catalyst: China Deficit
Freeport-McMoRan Copper & Gold (FCX) is getting sold off 3.5% on high volume this afternoon, shoved lower by a surprise trade deficit in China. With Chinese demand providing a big price driver for the metals FCX pulls out of the ground, the possibility of a weakening economy in the People's Republic is causing week hands to sell off shares.
That's sending FCX to test support at $31, an important price level that's been in force since last September. If Freeport fails to catch a bid at the $31 level, then look out below. If shares bounce here, it's still not a very compelling buying opportunity -- resistance at $34 doesn't leave a lot of high-probability upside room. I'd recommend avoiding this stock until buyers can hold shares above that $34 price ceiling.
Cliffs Natural Resources
Nearest Resistance: $18.50
Nearest Support: N/A
Catalyst: Proxy Fight
Shares of coal miner Cliffs Natural Resources (CLF)are down more than 5% this afternoon, shoved lower by news that activist investor Casablanca Capital refused the firm's proposal to end a proxy fight for control of Cliffs' board. That, coupled with pressure on commodity prices from the China deficit news, provided a one-two punch at CLF's open this morning.
More important, the news broke CLF down below an important support level at $18.50. Now, with support taken out in this stock, more downside looks likely. Caveat emptor.
Nearest Resistance: N/A
Nearest Support: $5
Catalyst: Technical Setup
Shares of small-cap fuel-cell stock Plug Power (PLUG) have been on fire this year. This $1 billion name is up more than 500% since the calendar flipped over to 2014, making it one of the biggest gainers of the year by a big margin. The most recent upside has come off the heels of news that the firm signed a contract with retail giant Wal-Mart (WMT) for six of its distribution centers. But now, the follow-through in price action is 100-percent technical.
Plug had been forming a two-month ascending triangle pattern that shares broke out of at the start of this month with their push above (former) resistance at $5. Now, PLUG's high-probability outcome is to the upside.
That said, it's no stretch to say that this stock is overextended right now. Buyers should wait for some semblance of a correction before buying.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.