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.
Whole Foods Market
Nearest Resistance: $47.50
Nearest Support: N/A
Catalyst: Q2 Earnings
Whole Foods Market (WFM) is getting utterly shellacked this afternoon, down more than 19% following the firm's second quarter earnings call. WFM reported earnings of 38 cents per share on record sales for the quarter, but the profit measure came in shy of the 41 cents that analysts were expecting. Worse, Whole Foods lowered its guidance for the rest of 2014, committing the ultimate sin as far as investors are concerned.
Technically speaking, this chart is broken -- not that it looked all that attractive before today. Shares have been in a downtrend since October, but today's huge selling is pushing the upscale grocer down through support at $47.50 and clearing the way for further downside. Caveat emptor.
Nearest Resistance: N/A
Nearest Support: $36
Catalyst: Q1 Earnings, Restructuring
Mondelez International (MDLZ) is one of the few names that's rallying hard this afternoon, in this case on the heels of a strong first-quarter earnings call. The firm earned 9 cents in the first quarter, a number that fell well short of the 34-cent average estimate that analysts were looking for. But news that the firm was pursuing a $3.5 billion corporate restructuring program is breaking shares out to new highs. The program is expected to save $1.5 billion in the next four years.
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: $310
Nearest Support: $280
Catalyst: Technical Setup
Ecommerce behemoth Amazon.com (AMZN) is off by more than 2% this afternoon, just the latest move lower in a series of selloffs that started following the firm's fourth quarter earnings release back in January. Suddenly, investors weren't as content to let Amazon keep on operating without a profit -- and the selling hasn't stopped in the four months that have followed.
But $280 could be the end of it -- that level has been a key support zone since last August. Wait for a bounce off of that level before trying to snatch up shares on the cheap; $280 is a stronger floor for shares than the ones that have preceded it, but it could still get violated. Waiting for the bounce keeps you out of AMZN until buyers have already stepped up to the plate.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.