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 today's stocks.
Nearest Resistance: $72
Nearest Support: $63
Catalyst: Q4 Earnings
Cardinal Health (CAH) is getting a surprisingly bad reaction to its fourth-quarter earnings release this afternoon, down 4.6% as I write. CAH reported good numbers for the quarter, earning profits of 83 cents, versus Wall Street's best guess of 81-cent EPS. Likewise, Cardinal guided the coming year's earnings within the range that analysts had been looking for. But the results weren't good enough to skirt selling pressures this afternoon, as investors take gains near Cardinal's highs.
Long-term, CAH is forming a double top pattern, a price setup that triggers a sell on a breakdown below support at $63. While there's still a while to go before this pattern comes close to triggering, it's an important trade to keep an eye on this month.
Nearest Resistance: $10
Nearest Support: $8
Catalyst: Industry Slowdown
Department store retailer J.C. Penney (JCP) is down 4% in today's session, down big thanks to an analyst report that indicated Penney's and its peers were set to post July sales that slowed materially according to information from credit card processor First Data.
Looking longer-term, today's price action isn't detracting from the long-term bullish setup in shares of JCP -- $10 is the breakout level to watch right now. If JCP can catch a bid above that $10 price ceiling, it's an indication of a major change in trend for the retail chain. Longs should wait for that $10 level to get taken out before jumping into shares.
J.C. Penney was featured recently in "5 Stocks Under $10 Set to Soar."
Nearest Resistance: $37.50
Nearest Support: $35
Catalyst: Technical Setup
Put simply, this stock has been a "buy-the-dips stock" for that entire stretch, and today's price action is giving longs another shot at a low-risk entry in this telecom giant. If you decide to be a buyer here, I'd recommend keeping a protective stop below the 50-day moving average. That level has been acting as a proxy for support in recent trading.
I also featured AT&T last week in "5 M&A Deal Stocks to Watch for Premium Gains."
Nearest Resistance: $5.80
Nearest Support: $5
Catalyst: Earnings Speculation
Last up is Office Depot (ODP), a name that's up 0.80% on big volume thanks to earnings season speculation. ODP is set to release its second quarter numbers Tuesday morning, and traders are loading up on shares in advance of the call. In a big sense, a volatile name such as Office Depot can act like a lottery ticket: A big positive surprise could result in a pop to start tomorrow's trading session. But that doesn't make it a good move.
There's considerable selling pressure in this stock right now -- ODP has been forming a textbook head and shoulders top all summer. If shares violate support at $5, then expect a lot more downside in this office supply retailer. $4 is the next meaningful support level on the way down.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.