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: $8
Nearest Support: $6.50
Catalyst: Analyst Upgrade
Ariad Pharmaceuticals (ARIA) is one of just a few big names that's moving higher on big volume this afternoon. In this case, investors have an analyst upgrade to thank for the buoyancy. As I write, shares of ARIA are up more than 5% this afternoon. ARIA's upgrade came from Jefferies, where analysts upped their rating from hold to buy, slapping a $14 price target on the now $7.61 stock.
But that doesn't mean you should buy it here. ARIA has been bouncing lower in a downtrending channel for the last four months, getting swatted lower on every successively lower test of trend line resistance. So, as shares of Ariad test support for a fourth time, it makes sense to brace for another correction in the near-term. I wouldn't recommend becoming a buyer until ARIA can break through the top of the downtrend.
Nearest Resistance: $105
Nearest Support: $90
Catalyst: Strategic Alternatives Announcement
One of today's biggest high-volume gainers is B/E Aerospace (BEAV), a name that's up more than 12% following the announcement that the firm was exploring the possibility of a sale or strategic alternatives. That news broke shares out to new highs, triggering a price pattern that puts BEAV's upside target up at $105.
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, it makes sense to keep a tight protective stop in place.
Nearest Resistance: $41.50
Nearest Support: N/A
Catalyst: Q1 Earnings
Shares of Realogy Holdings (RLGY) are down 12% this afternoon, following the results from the firm's first quarter of 2014. Analysts were expecting the firm to lose 19 cents for the quarter, but losses actually came in much deeper at 32 cents. The news sent frustrated investors hitting the "sell" button at the start of today's session, gapping shares of RLGY down to new 52-week lows.
Deeper lows are bearish for all the same reasons that new highs are bullish. With support at $41.50 taken out, sellers are definitively in control of this stock. That means that lower ground still looks likely from here. Don't become a buyer until RLGY establishes some semblance of support again.
Nearest Resistance: $1.20
Nearest Support: $0.90
Catalyst: Technical Setup
Last up is Brazilian telecom stock Oi (OIBR), a name that's correcting on big volume this afternoon thanks to technical drivers in shares. Oi has been a volatile name of late, dropping more than 37% since the calendar flipped to January. But shares rallied out of a V-Bottom on Friday, signaling that buyers are stepping back into shares.
Today's 5% correction is relatively tame following the 12.3% gains that OIBR recorded in the most recent session.
With all that in mind, the downtrend in Oi is still intact. Until that changes, it makes sense to sit on the sidelines with this stock. Yes, the price action looks constructive right now, but there's still a considerable amount of selling pressure at higher levels.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.