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: $41
Nearest Support: $44
Catalyst: Technical Setup
Microsoft (MSFT) is up 2.5% this afternoon, buoyed by the aftermath of positive earnings and a closed deal to acquire assets from Nokia (NOK). But the real meat of today's move is technical: Microsoft is bouncing higher in a textbook uptrending channel. And so, with shares sitting down at trend line support, MSFT's large-cap leadership today is giving traders a very good reason to buy the bounce.
The 50-day moving average is a good place to keep a protective stop if you decide to buy MSFT here. It's been acting like a solid proxy for support all the way up.
NorthStar Realty Finance
Nearest Resistance: N/A
Nearest Support: $16.25
Catalyst: Q1 Earnings, Acquisition Rumors
Shares of mid-cap REIT NorthStar Realty Finance (NRF) are up more than 10% this afternoon, following first quarter earnings and rumors that American Realty Capital Properties (ARCP) was in talks to buy NorthStar for $6.4 billion. If the rumors are true, that leaves a nearly 13% premium in shares as I write this afternoon. It's also pushing NRF to a new 52-week high.
New highs are significant from an investor psychology standpoint because they mean 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 for the deal premium, it makes sense to keep a tight protective stop in place.
Nearest Resistance: $9
Nearest Support: $8
Catalyst: Technical Setup
J.C. Penney (JCP) is up more than 6.6% this afternoon, rallying hard on the strength of the department store industry. While all department store names are rallying hard today, JCP is one of the biggest, highest-volume movers, likely a result of the huge short interest exiting bets against the retail name. Today's move through $8 is bullish, but longer-term, this setup looks like an inverse head and shoulder trade that's unfolding. $9 is the more meaningful resistance level to watch from here.
If buyers can shove JCP above $9, then there's a lot more upside potential ahead.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.