4 Hot 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.

>>3 Big-Volume Stocks in Breakout Territory

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 that's 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.

>>5 Stocks to Sell Before It's Too Late

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. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

Under Armour

Nearest Resistance: $54
Nearest Support: $50
Catalyst: Stock Split

Shares of sports apparel maker Under Armour (UA) are seeing big volume this afternoon, following a 2-for-1 stock split that went effective today. Under Armour has been a big momentum name over the last year, rallying more than 81% since April 2013, so it's not that surprising that UA was one of the names that's been correcting hard in 2014. But that doesn't mean that UA is in free-fall right now; in fact, shares are holding sideways in consolidation-mode.

The key levels to watch in UA right now are resistance at $54 and support at $50. Those are the price levels that buyers and sellers are battling it out between right now. A breakout above $54 makes UA a high-probability buy.

The Coca-Cola 

Nearest Resistance: $41
Nearest Support: $39
Catalyst: Earnings

Beverage giant Coca-Cola (KO) is rallying more than 4% this afternoon, buoyed by strong earnings and a broad market that's fading hard in favor of blue chips as Tuesday's session drags on. Coke earned 36 cents per share for the first quarter, a number that got hit by currency conversion charges. Excluding currency charges, the firm met analyst expectations with non-GAAP earnings of 44 cents.

From a technical standpoint, today's 4% pop is solid, but it's far from meaningful. Shares broke out today, but they're still very close to a more important resistance level at $41. Be wary of buying KO until shares can catch a bid above that $41 price. There's more downside risk than upside potential at current levels.

J.C. Penney

Nearest Resistance: $8
Nearest Support: $6
Catalyst: Technical Setup

Meanwhile, shares of department store retailer J.C. Penney (JCP) are selling off this afternoon, shoved lower thanks to a textbook technical setup that's been setting up since the start of March. JCP has been forming a double-top pattern for the last month and a half, triggering a sell signal with Friday's breakdown through the $8 level.

The complete inability of J.C. Penney to catch a bid here is a big problem for longs right now. While support at $6 is far below, I wouldn't put too much faith in buyers down there. $5 is the next important support level if $6 fails.

Vale

Nearest Resistance: $14.75
Nearest Support: $12
Catalyst: Dividend, Brazil ADR Selloff

Shares of Vale (VALE) are getting hammered 5.8% lower as I write this afternoon, pushed down by a combination of a big dividend distribution and a broad selloff in commodity-driven Brazilian ADRs today. A quick glance at this chart should be all it takes to see that the primary trend is down in Vale. In fact, shares have been tracking down in a textbook channel since last fall. This latest bounce off of trend line resistance in April is a good opportunity to sell again.

I'd avoid the long-side of this stock until it can break out of its downtrend.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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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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