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: $27.25
Nearest Support: $23
Pepco Holdings (POM) is up more than 17% this afternoon, following news that Exelon (EXC) was planning to buy the regulated utility for $27.25 per share in cash. That offer price leaves a small 1.9% premium left in shares as I write this afternoon, a reflection of investors' high conviction that the deal will get done.
Pepco has been one of the biggest beneficiaries of the flight to yield that's rewarded dividend-paying regulated utilities in 2014, and shares have been going parabolic in the last couple of months as a result. But with the acquisition plans public, the money has already been made in the POM deal. It's best to sit on the sidelines at this point.
Nearest Resistance: $36
Nearest Support: $33.50
Catalyst: POM Acquisition
The other side of the Pepco deal is Exelon (EXC). Exelon is no stranger to buying regulated utilities in the mid-Atlantic region -- it bought Constellation Energy back in 2011, acquiring Pepco's neighbor, Baltimore Gas & Electric, in the process. But investors are less excited about the acquisition; shares of EXC are down more than 4% following news of the POM purchase.
From a technical standpoint, EXC is a "buy the dips stock." It's been another big beneficiary of 2014's flight to yield and utility sector rally, and the uptrend in EXC is still intact in spite of today's drop. If you decide to jump into EXC, I'd recommend keeping a protective stop at the 50-day moving average.
Nearest Resistance: $50
Nearest Support: $45
Catalyst: Q3 Earnings, Downgrades
Coach (COH) is in sell mode for a second day, after reporting its fiscal third-quarter numbers to Wall Street. Coach's guidance came in worse than expected yesterday, with the firm forecasting a 10% drop in sales for next quarter. Then came downtrades from Citigroup and UBS in reaction to the earnings calls. Today, shares are testing a key past support level at $45. If shares fail to catch a bid at $45, then it's time to sell. Otherwise, COH could have a buying opportunity if buyers step in for a second time.
Either way, the chart is your best bet to figure out where supply and demand sit for shares of the handbag maker.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.