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: $9
Nearest Support: $7
Catalyst: Technical Setup
Long-suffering J.C. Penney (JCP) shareholders could be in for a reprieve thanks to the technical story that's playing out in shares of the beaten-down retailer. After getting sold off approximately 50% lower in the last year, JCP is starting to show some technical signs of a reversal: a classic inverse head and shoulders setup is close to triggering in JCP.
The breakout level to watch is $9. The stock's current proximity to that level is a big part of the transaction volume shares are seeing right now. If JCP can hold a bid above $9, joining buyers becomes a high probability trade.
Nearest Resistance: $4.50
Nearest Support: N/A
Catalyst: Earnings, Downgrade
Rare earth miner Molycorp (MCP) is down more than 15% this afternoon, hammered lower after releasing earnings and getting downgraded in one fell swoop. After the bell on Wednesday, Molycorp announced a first-quarter loss of 40 cents per share, dragged down by lower selling prices for the firm's rare earth metals. That earnings miss was followed up by a downgrade at J.P. Morgan Securities to underweight from neutral.
From a technical standpoint, MCP's chart is a mess. Shares had been forming a bearish descending triangle setup for most of the last year, and it finally triggered in yesterday's session. Today's big volume drop is just follow-through. Stay away from MCP until this stock can find some semblance of support again.
Nearest Resistance: N/A
Nearest Support: $45
Catalyst: Indian Elections
$27 billion Indian bank ICICI Bank (IBN) is up more than 7% this afternoon, rallying higher on India's election news today. IBN isn't alone in the move; India's equity indices are up big this afternoon overall. But this big banking ADR is one of the most investible ways for U.S. investors to take part in the move -- and that's why IBN is rallying so hard today. The election has IBN breaking out to new multi-month highs today.
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: N/A
Nearest Support: $56
Catalyst: Q1 Earnings
Finally, CBS (CBS) is off more than 2.5% this afternoon, pushed lower following first-quarter earnings results. CBS earned 79 cents for the quarter, beating estimates by 4 cents. But revenues slipped vs. the comparable period, and tempered expectations for the rest of 2014 are sending shares lower in the session. Ultimately, it's make-or-break time for CBS right now.
Shares of CBS broke their uptrend back in early April, slipping below the trendline that's been a floor for shares since last summer. Now, the line in the sand is at $56, which has been a key level of buying since all the way back in November. If CBS fails to hold support at $56 early next week, it becomes a sell.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.