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: $37
Nearest Support: $33
Catalyst: Analyst Upgrade
Yahoo! (YHOO) is getting some upside action of its own today, boosted by an analyst upgrade from Piper Jaffray. Piper upgraded the web giant to overweight, hiking their price target on shares from $37 to $43. One of the biggest catalysts for the rating change was the argument that the firm's large stake in Alibaba is undervalued. While today's 2.2% pop is bullish, the longer-term technical picture looks less rosy.
Yahoo! is currently forming a long-term descending triangle, a setup that's formed by downtrending resistance above shares and horizontal support to the downside. Basically, as Yahoo! bounces in between those two technically significant price levels, it's getting squeezed closer to a breakdown below $33. When that happens, YHOO becomes a high-probability sell.
Nearest Resistance: $1
Nearest Support: $0.60
Catalyst: Shareholder Meeting Rejection
The drama continues in shares of small-cap clothing stock American Apparel (APP). Once again, the tiny fashion firm is seeing huge trading volume thanks to the ongoing dispute between the board and founder Dov Charney. Today, it's news that Charney's request for a special shareholder meeting was rejected by the board. The decision comes as a move to limit Charney's ability to re-take control of the firm after his firing earlier this month. Currently, Charney owns 27% of APP's shares.
Technically speaking, things still look positive in spite of today's 9.5% correction. The downtrend that's been in place for most of the last year broke in the middle of June, and shares have been making higher lows ever since. Still, that doesn't mean it's time to pile into APP; event risk is huge in this stock as the battle for control goes on.
Nearest Resistance: $12
Nearest Support: $9
Catalyst: Analyst Downgrade
Insurer MBIA (MBI) is down 4.9% this afternoon, dragged lower by an analyst downgrade from BTIG. The firm cut MBIA from buy to neutral over concerns that Puerto Rican restructuring laws could cap possible upside in this $2 billion stock. As bad as the fundamental news may be, it's the technical picture that should be driving shareholders to hit the "sell" button here.
MBI triggered a bearish head and shoulder top pattern at the end of last week, tripping shares through the neckline. That lack of buying pressure is magnifying today's big correction on the analyst downgrade news. With no semblance of support until high single-digit prices, it still makes sense to be a seller here.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.