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: $38
Nearest Support: N/A
Catalyst: Guidance Cut
Luxury accessory maker Coach (COH) is seeing a second straight day of selling pressure following a guidance cut at the firm's investor day on Thursday. Coach reported that it expected to actually see a mid-teen percentage drop in North American same store sales, a decline that came in worse than the 9.6% that analysts were already estimating.
There's no question now: This chart is clearly broken. COH was already in a well-defined downtrend for the better part of the last three quarters, but the latest guidance revelations broke shares down through the bottom of trend line support, opening up the stock to considerably more downside risk from here.
Nearest Resistance: $340
Nearest Support: $310
Catalyst: Technical Setup, Fire Phone Hangover
Amazon.com (AMZN) is correcting 1.44% on big volume this afternoon, seeing extra attention on the heels of the firm's Fire phone announcement earlier this week. But while investors position themselves around the online retailer's exciting new gadget announcement, there's a big technical setup coming together in shares of AMZN.
Amazon has been a major laggard in 2014, dropping more than 19% since the calendar flipped to January -- but with a classic inverse head and shoulders pattern in AMZN right now, this $148 billion retailer is starting to look "bottomy." The breakout level to watch is $340. If shares can push through that $340 price level in June, then Amazon becomes a high-probability buy.
Nearest Resistance: N/A
Nearest Support: $51
Catalyst: Technical Setup
Last, but far from least, is Wells Fargo (WFC) a big banking name that's seeing additional trading volume this afternoon as shares test new all-time highs to end the week. Wells Fargo has been bouncing its way higher in a well-defined uptrending channel for the better part of the last year. That means that Wells is still very much a "buy the dips stock" despite its record price tag. But new highs do have a way of helping things along too.
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, the 50-day moving average has been a solid proxy for support on the way up. It's the logical place to keep a protective stop.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.