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: N/A
Nearest Support: $72.50
Catalyst: Fox Acquisition Offer
Media company Time Warner (TWX) is up 16% this afternoon, following news that the firm received an acquisition offer from Twenty-First Century Fox (FOXA) for $85 per share in cash and stock -- and then rejected it. TWX is up near that offer price on speculation that bigger buyout offers could be in the pipeline; the Wall Street rumor mill is already indicating that Fox CEO Rupert Murdoch is willing to make a higher bid.
Today's big breakout in TWX means that shares are overextended from a momentum standpoint, but the trading implications are still bullish up here. For traders willing to take the event risk of this acquisition drama, there's a lot of upside left.
International Game Technology
Nearest Resistance: $18
Nearest Support: $16
Catalyst: GTech Acquisition Offer
International Game Technology (IGT) is up 9.4% this afternoon, following an acquisition deal with GTech that pays shareholders $18.25 in cash and stock. The deal grants shareholders a $13.69 cash payout, plus 0.1819 shares of the future combined firm for each share of IGT they own. There's a lot of money still on the table with the IGT deal: at current prices, we're talking about a $1.36 merger arbitrage opportunity per share.
IGT spent most of this year in a downtrend, but shares broke higher at the start of the summer, starting on a promising uptrend in its place. But don't expect much from here -- risk premium and a major cash component of the acquisition price put a hard ceiling on shares.
Nearest Resistance: $0.80
Nearest Support: $0.70
Catalyst: Portugal Telecom Merger Terms
Shareholders of Oi SA (OIBR) are getting their wish today: new and improved terms for the Brazilian phone company's proposed merger with Portugal Telecom. OIBR had been taking a beating after a bigger-than-expected commercial paper position in Rioforte could end up giving Oi the short-end of the stick in the combination. Now Portugal Telecom is cutting its ownership in the combined firm to 25.6%. Before, it could have been as high as 39.6%.
Even though today's update is a positive for OIBR, and even though shares are rallying 13.2% on the news, it makes all the sense in the world to stay away from this stock. Shares are stuck in a parabolic downtrend right now. Until that changes, stay away from the long side of OIBR.
Twenty-First Century Fox
Nearest Resistance: $36.50
Nearest Support: $33
Catalyst: TWX Acquisition Offer
The other side of the Time Warner deal is Twenty-First Century Fox (FOXA), a name that's getting hammered 5.4% lower this afternoon on worries that the firm will overpay for its buyout target. Today's drop looks pretty rough, but from a technical standpoint, things could be a whole lot worse. FOXA has been bouncing its way higher in an uptrending wedge for the last six months, with very well-defined support under foot.
Buyers looking for a low-risk entry opportunity in Fox should wait for the next test of support.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.