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 such as 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: N/A
Nearest Support: $45
Catalyst: Wild Flavors Acquisition
Shares of agribusiness Archer-Daniels-Midland (ADM) are up 1.4% as I write this afternoon, buoyed by news of the firm's biggest acquisition ever: the $3 takeover of natural food ingredient maker Wild Flavors. ADM shareholders are reacting well to the pricey purchase: they're bidding ADM up to new all-time highs today.
From a technical standpoint, ADM looks bullish thanks to the new high-water mark set in shares. Prior resistance at $45 should provide a reasonably strong support level now that it's been taken out. If you decide to jump into ADM here, the 50-day moving average is a logical place to keep a protective stop; it's been a good proxy for support over the last two months.
Nearest Resistance: $70
Nearest Support: $60
Catalyst: Activist Buy
PetSmart (PETM) is getting some carryover today from Thursday's 12.5% session, the result of news that hedge fund Jana Partners had taken a 9.9% activist stake in shares of the pet supply retailer. PetSmart management responded to the activist position announcement by saying that the firm would review its capital structure to find more ways to return value to shareholders. Now investors are speculating that Jana's involvement could help to drive returns in the second half of 2014.
For now, there's an intermediate upside barrier at the $70 level. That resistance level has been a price ceiling for shares since early April, and that makes it a level worth waiting to see get taken out before new buyers jump in.
For traders looking for extra reasons to like this name, PetSmart also happens to be one of this week's Rocket Stocks.
Nearest Resistance: N/A
Nearest Support: $11
Catalyst: R&D Sale
BlackBerry (BBRY) is up more than 5.3% this afternoon, thanks to carryover from the firm's sale of its German R&D division to carmaker Volkswagen. The sale puts BBRY one step closer to profitability as the firm restructures its operations, and it also potentially gives BlackBerry a big partner in VW. Last week's sale news might have been the catalyst for the upside in BBRY, but the technical setup is propelling shares today.
BBRY is shoving its way through an important prior resistance level at $11 this afternoon, sending a very buyable breakout signal to traders. The next-lowest support level at $9.50 looks like a good place to keep a protective stop.
Nearest Resistance: $5.75
Nearest Support: $4
Catalyst: Insider Selling
Last up is Arena Pharmaceuticals (ARNA), a $1.2 billion biopharma stock that's getting shellacked to the tune of 9% on the heels of big insider selling. According to filings, CEO Jack Lief sold nearly a quarter million shares of the pharma stock, an amount that added up to 40% of his holdings in shares of Arena. The share sale was part of a pre-arranged trading plan, but that's not stopping it from inspiring a selloff in Arena.
ARNA spent most of 2014 forming a long-term descending triangle pattern, a bearish price setup formed by horizontal support at $5.75 and downtrending resistance to the downside. Today's breakdown through $5.75 is triggering a sell signal in this stock. In other words, there's a lot more downside potential left in ARNA even after today's big decline. Look for shares to hit the brakes closer to $4.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.