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 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.
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.
Nearest Resistance: $11.75
Nearest Support: $11
Catalyst: Q1 Earnings
After dropping hard early this morning, Xerox (XRX) is rebounding this afternoon following its own earnings release. Xerox reported earnings of 23 cents for the quarter, a number that was more or less in line with analysts' expectations -- but guidance got cut down for the full year and quarter ahead. That's what spurred the drop.
The reason for XRX's big reversal today? It's technical. Shares of XRX have been trading in a narrow uptrend since the beginning of February, and today's selling dropped the stock price down to trend line support, a spot where there's a glut of buying pressure. That makes the support bounce buyable today, even though shares are already getting close to resistance. The 50-day moving average has been a good proxy for support on the way up; don't sell XRX unless it gets violated.
Advanced Micro Devices
Nearest Resistance: $4.50
Nearest Support: $4.10
Catalyst: Q1 Earnings, Upgrade
$3 billion chipmaker Advanced Micro Devices (AMD) is up 2.8% this afternoon on high volume, adding onto yesterday's post-earnings pop. On Thursday night, AMD announced that it earned 2 cents per share for the first quarter of 2014, beating analysts' break-even expectation. That positive report spurred analyst upgrades from Bernstein and FBR Capital Markets, a contributing factor to the buying pressure that's been in effect since markets opened yesterday.
Monday's breakout pushed AMD above a former resistance level at $4.10, clearing a ceiling that's been in effect for almost all of 2014. That's a bullish signal, but shares are closing in on a more substantial resistance level at $4.50. The risks are low in AMD here, but near-term rewards are too. If shares can catch a bid above $4.50, we've got a big buy signal in this stock again.
Nearest Resistance: N/A
Nearest Support: N/A
Catalyst: IPO Buying Frenzy
Shares of Weibo (WB) are spending another session trading higher after Thursday's IPO. The Chinese social media platform has been moving "up, up and away" since shares started trading last week. It's a technical move (there's substantial demand for shares of WB right now), but the technicals in this stock aren't well-established enough to get any semblance of risk-management on a Weibo trade. For now, the new highs are a self-perpetuating buy cycle until demand starts waning at loftier valuations.
Less experienced investors should sit Weibo out. This is a high-volume name that's being traded tick-by-tick by more experienced traders.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.