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.
Nearest Resistance: $10.75
Nearest Support: N/A
Catalyst: Technical Setup
The drama continues in Brazilian energy stock Petrobras (PBR). This $70 billion name is rebounding today after a critical breakdown below support at $10.75. Even though shares are attempting to push back up above that $10.75 level, the fact that PBR broke a bullish setup is particularly bad for shares.
There's a lot of resistance above shares right now. Sideways is the best-case scenario for PBR in the near-term, and that makes it a name worth avoiding.
Nearest Resistance: $23
Nearest Support: $19
Catalyst: EPL Acquisition
Shares of small-cap oil and gas exploration and production company Energy XXI (EXXI) are down around 4% on big volume this afternoon, swatted lower after news that the firm was planning to acquire EPL Oil & Gas (EPL) for $1.53 billion. The deal would create the biggest independent E&P that operates in the Gulf of Mexico.
Investors don't like the deal -- or at least not for EXXI. Shares have spent the last six months in a downtrending channel, and after finally breaking out of it in February, they've re-entered their downtrend on the acquisition news. That makes downside look very likely; the 50-day moving average has been a stellar proxy for resistance on the way down. Don't even think about being long EXXI until the 50-day gets taken out.
EPL Oil & Gas
Nearest Resistance: $39
Nearest Support: $37
The other side of the EXXI trade is EPL Oil & Gas, the acquisition target. EXXI's offer price works out to a $39 per share check for EPL, a fact that's creating a hard resistance level at that price. Support intraday has been $37, a wide gap that amounts to a 3.2% risk premium on the deal right now. That makes EPL a decent merger arbitrage opportunity, but not much else.
Nearest Resistance: N/A
Nearest Support: $30.50
Catalyst: Earnings Beat
Shares of VeriFone Systems (PAY) are getting a shot in the arm this afternoon, up 11.5% on the heels of good first quarter earnings numbers. The firm earned profits of 20 cents per share for the quarter, beating the 15-cent consensus on Wall Street. But the upside isn't likely over -- at least not yet. Today's gap up broke PAY out of an ascending triangle pattern and to new highs.
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 stop under support at $29.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.