4 Hot Stocks to Trade (or Not)


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.

>>5 Dividend Stocks Ready to Pay You More

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.

>>5 Stocks Ready for Breakouts

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.

Steel Dynamics

Nearest Resistance: N/A
Nearest Support: $18.75
Catalyst: Severstal Columbus Acquisition

$4.3 billion steel producer Steel Dynamics (STLD) is up more than 5.8% as I write this afternoon, propelled higher by news that the firm would be acquiring the Columbus, Mississippi plant that previously belonged to Russian steel firm Severstal in a $1.625 billion deal. Not only does STLD gain the Columbus plant, but the arrangement also means an exit from the U.S. market for a big rival in OAO Severstal. The news is pushing shares of STLD 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.


Nearest Resistance: $44
Nearest Support: $36
Catalyst: Analyst Upgrade

Recent IPO GoPro (GPRO) is up 2.5% this afternoon, following an analyst upgrade that's spurring buying pressure in shares again. Piper Jaffray upgraded GoPro to overweight, putting a $48 price target on shares. That upside target price would put GPRO back up at its all-time high price set on its fourth trading session. For now, GPRO's short-lived chart is starting to look bullish again. Shares formed a rounding bottom in July, with a breakout level at $44. If shares can push through that nearby $44 price ceiling, then a test of $50 looks likely.

GPRO's recent IPO status makes it a volatile name. If you decide to take a position in this stock, be sure to keep a tight leash on it.


Nearest Resistance: $40
Nearest Support: $37
Catalyst: Q2 Earnings

$27 billion regional bank BB&T (BBT) is down nearly 4% this afternoon -- its biggest single-day drop since 2012 -- following second-quarter earnings numbers that missed the mark. BB&T earned 58 cents per share for the quarter, falling well short of the 75-cent consensus profit estimate that Wall Street was looking for. The firm also announced that it the U.S. Department of Housing and Urban Development plans to audit the bank over sales of government-backed loans. The one-two punch of earnings and the audit news are the catalysts torpedoing BBT's share price.

Things don't look much better in the longer term. BBT has been forming a classic head and shoulders top for most of 2014, a bearish price setup that triggers on a violation of this stock's $37 neckline. Put simply, if BBT falls below $37, look out below.

CBS Outdoor Americas

Nearest Resistance: $35.50
Nearest Support: $31.50
Catalyst: Van Wagner Asset Purchase

Billboard advertising company CBS Outdoor Americas (CBSO) is up 3.5% this afternoon, boosted on high volume following news that the firm is acquiring advertising assets from Van Wagner Communications for $690 million in cash. The deal gives CBSO 1,100 large billboard displays spread across 11 U.S. markets. All together, those assets generated $206 million in revenues last year.

While CBSO's price history is limited, shares have been bouncing their way higher in a well-defined uptrending channel up until now. This is a "buy the dips stock" this summer -- but it makes sense to wait for the next dip.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.





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At the time of publication, author had no positions in the names mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji

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