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.
Without further ado, here's a look at three stocks for your trading radar.
Nearest Resistance: $360
Nearest Support: $315
Catalyst: Q2 Earnings
E-tail giant Amazon.com (AMZN) cratered on Friday following the firm's second-quarter earnings call after the bell Thursday. Amazon announced that it lost $126 million for the quarter, more than double the loss that analysts were expecting. Now, investors are wondering whether AMZN will ever provide meaningful returns, following years of operating on paper-thin margins.
From a technical standpoint, AMZN isn't a name you'd want to own. Shares have been in a well-defined downtrend since the start of 2014, and shares are testing trend line support with today's big gap down. If AMZN violates support at $315, look out below.
Nearest Resistance: $28.50
Nearest Support: $20
Catalyst: Q2 Earnings
Internet radio company Pandora Media (P) sold off on Friday following disappointing earnings. Pandora reported its second-quarter numbers this morning, and while earnings came in a penny ahead of estimates, at 4 cents per share, listener growth and mobile revenues each came in below expectations. While active listeners climbed 7.5% to 76.4 million users, analysts were calling for double-digit growth rates for the quarter.
Pandora hasn't sported a very attractive chart in 2014. In fact, shares have been bouncing their way lower in a very wide downtrend for most of the year. Now, with shares making a new leg lower, it makes sense to be a seller following the earnings failure.
Nearest Resistance: $24
Nearest Support: $21
Catalyst: Technical Setup
Applied Materials (AMAT) moved lower Friday, driven down on big volume for technical reasons. AMAT rolled over in the middle of July, falling from $23 at the start of the week, but bulls could be looking at a solid buying opportunity as AMAT presses down against the low end of its range.
That's because Applied Materials is currently forming an uptrending channel. Since February, every successive test of trend line support on the way up has provided traders with a very low-risk buying opportunity. Wait for a bounce off of support before putting cash on this trade.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.