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.
Advanced Micro Devices
Nearest Resistance: $4
Nearest Support: $3.60
Catalyst: Q2 Earnings
Chipmaker Advanced Micro Devices (AMD) is dropping like a rock, down more than 18% as I write this afternoon, following the firm's second-quarter earnings release. AMD earned profits of 2 cents for the quarter, falling short of the average 2.7-cent analyst estimate. That might be a slim miss, but declining sales and tepid forecasts helped to ensure that shares would drop double digits today.
From a technical standpoint, you don't want to own AMD right now. Today's huge selloff is a good indication that sellers are in control here, even if shares are slowly melting up as the session progresses. Bargain-hunters should wait for AMD to establish some semblance of support before they buy.
RF Micro Devices
Nearest Resistance: N/A
Nearest Support: $10
Catalyst: Sympathy Move
Shares of $3 billion radio frequency chipmaker RF Micro Devices (RFMD) are up 5% this afternoon, but it doesn't have anything to do with the company's own business. Instead, shares are seeing a sympathy move following the earnings-induced pop in Skyworks Solutions (SWKS) today. Even though SWKS is the catalyst for the move, RF Micro Devices is the stock that's seeing more volume.
Today's buying is pressing RFMD through resistance at $10, an important breakout level that shares have been flirting with for the last month and change. If shares can hold above $10 through the close this evening, we've got a confirmed breakout, and a high-probability buy signal for traders.
Nearest Resistance: $24
Nearest Support: $21
Catalyst: TerraForm Power IPO Pricing
Solar wafer company SunEdison (SUNE) is seeing big volume this afternoon, after pricing was announced for the IPO of its subsidiary TerraForm Power at the top of its expected range. While investors were looking for the IPO to price between $23 and $25, the actual number came in at $25, putting a big vote of confidence on the upcoming deal. That, in turn, could put considerable cash on SUNE's balance sheet.
Shares of SUNE have looked technically attractive for a while now. Even though shares are backing off their highs today, $24 is the price level to watch in SUNE – if increasingly eager buyers can take out resistance at that level, then it becomes a very low-risk buying opportunity.
Nearest Resistance: N/A
Nearest Support: $45.50
Catalyst: Q3 Earnings
Skyworks Solutions' (SWKS) is spurring a 14% gap higher in shares of the chipmaker this afternoon. SWKS earned 83 cents last quarter, besting forecasts and estimates of 80 cents. Even better, the firm guided higher for its fiscal fourth quarter, surprising analysts with a $1 per share EPS estimate. The news is sending SWKS to new 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.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.