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: $36
Nearest Support: $30.75
Catalyst: Q2 Earnings
Search engine Yahoo! (YHOO) is dropping 5% on earnings this afternoon, after the firm announced that it earned 37-cent profits for the second quarter. Analysts were looking for 38 cents, and while the reaction to the penny miss is big, it's not unexpected given the downtrend that shares have been harangued by for the last six months. It's important to note that YHOO also announced that it would be returning at least half of the cash it generates from the IPO back to shareholders.
It's hard to argue with the YHOO chart: Downtrends don't get much more textbook than the one that's been swatting shares of Yahoo lower since January. Shares tested trend line resistance to start the week, and now they're on another down-leg. It makes sense to be a seller here.
Nearest Resistance: N/A
Nearest Support: $32
Catalyst: Q2 Earnings
Microchip giant Intel (INTC) is up 6.5% this afternoon, gapping higher to start the day on positive second-quarter earnings results and solid guidance. Intel reported earnings of 55 cents per share, beating 52-cent expectations. More important, the earnings update is gaining extra traction thanks to recent rumors of supply gluts in the semiconductor industry. Today's breakout means that Intel is pressing up into new all-time highs this afternoon.
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 buy here, keep a tight stop in place.
Nearest Resistance: $22.50
Nearest Support: $21
Catalyst: Q2 Earnings, Downgrade
Taiwan Semiconductor (TSM) is dropping 5.6% following its second-quarter earnings and guidance release. The firm earned NT$70.7 billion in profit for the quarter, besting estimates of NT$67.8 billion. That wasn't enough to stop a downgrade at Susquehanna, which cut the firm from neutral to negative, putting a $17 price target on TSM. That target represents a further 20% downside from here.
The technicals tell a different story in TSM, however. This stock has been bouncing its way higher in a picture-perfect uptrend all year long, and today's correction is giving traders another opportunity to buy the dip. Wait for shares to catch a bid at support before jumping into TSM.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.