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: $4.20
Nearest Support: $3.80
Catalyst: IDIX Sympathy Move
The buyout in shares of Idenix is impacting other names in the hepatitis C space today. One of the most obvious is Achillion Pharmaceuticals (ACHN), which is up more than 46% on big volume this afternoon thanks to speculation that it could be the target of a similar takeover at a similarly gigantic premium. More important, there's still an interesting technical setup in shares of ACHN.
Achillion is currently testing resistance at $4.20 after breaking out on the IDIX buyout news this morning. $4.20 has been a price ceiling for shares going back to January, so if IDIX can break out above that level, it's time to join the buyers. If you do, keep a tight stop in place.
Nearest Resistance: N/A
Nearest Support: $63
Catalyst: Merger Speculation
Discount retailer Dollar General (DG) is up approximately 10% this afternoon, following news that Carl Icahn had built a 9.4% position in rival Family Dollar Stores (FDO), which plans to merger the two dollar store chains. DG is the larger of the two, as well as the operationally superior name, big factors that should give shareholders in this name the upper hand in a potential merger deal.
From a technical standpoint, Dollar General is in breakout mode right now. Shares broke out above their near-term downtrend earlier in the month, and now, today's news is breaking shares above a prior resistance level at $63. Now, that $63 level is a price floor for shares. If you decide to be a buyer here, that's a logical place to keep a protective stop below.
Family Dollar Stores
Nearest Resistance: $70
Nearest Support: $66
Catalyst: Carl Icahn Stake
The other side of the dollar store buying frenzy is Family Dollar Stores (FDO), which is up 13.7% this afternoon following the Icahn stake news. Technically speaking, FDO has looked atrocious for the last eight months and change, bouncing its way lower in a textbook downtrend. But the news cycle is breaking the downtrend today, giving buyers instant control of a stock that's been dominated by sellers for quite a while now.
It makes sense to wait for FDO to establish a more meaningful semblance of support before jumping in, but shares look worlds better today than they did just a session ago.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
At the time of publication, author was long AAPL.
Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.
Follow Jonas on Twitter @JonasElmerraji