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.
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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.
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Nearest Resistance: $10
Nearest Support: $9
Catalyst: Q2 Earnings
Department store retailer J.C. Penney (JCP) fell 2.5% on big volume to end last week, dropping in the wake of the firm's second-quarter earnings numbers. Penney lost 57 cents per share, a number that was better than the 90 cent loss that analysts were expecting, but a lack of cash generation and shrinking margins from the firm's operations spooked investors enough to trigger selling Friday.
From a technical standpoint, JCP still looks constructive longer term: shares have been forming a long-term inverse head and shoulders setup with a neckline level at $10 for the better part of the last year. A breakout above $10 remains a key buy signal for shares this week.
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Nearest Resistance: $42
Nearest Support: $38.50
Catalyst: Merger Details
Kinder Morgan (KMI) is starting another week with high volume, as investors throw interest at the stock following its high-profile plans to acquire Kinder Morgan Energy Partners (KMP) , Kinder Morgan Management (KMR) and El Paso Pipeline Partners (EPB) in a deal that will create largest energy infrastructure company in North America. Coverage indicating that the premium on shares looks warranted is helping to propel the stock this morning.
Technically speaking, KMI's move to new highs last week looks bullish. Shares have resistance at $42, but if that level gets breached topside, more upside looks likely ahead.
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Nearest Resistance: $17.50
Nearest Support: $15
Catalyst: Election, Technical Setup
Officially, election speculation is getting the credit for the rally in shares of Petrobras (PBR) that ended last week. Shares of Brazil's state oil firm ended 6.79% higher on hopes that the country's president, Dilma Rousseff won't win the votes needed for re-election during the country's October first round of voting. Hopes that a more pro-business candidate will take her place are driving buying in PBR this month.
But the buying looks a whole lot more predictable from a technical standpoint. Just like the last time we looked at PBR, this name is a "buy-the-dips stock" with a well-defined uptrend that's been bouncing shares higher since April. Friday's pop just happened to coincide with the most recent test of trendline support. That makes PBR look buyable here.
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Nearest Resistance: $24
Nearest Support: $20.50
Catalyst: Q3 Earnings
Speaking of "buy-the-dips stocks," Applied Materials (AMAT) reported its fiscal third quarter numbers to Wall Street. The firm reported earnings of 28 cents for the quarter, besting consensus estimates of 26.9 cents, and upping its fourth quarter expectations at the same time. Shares moved 6.3% higher on Friday on the heels of the move – and they're poised for more high volume this week.
AMAT is another textbook uptrending channel. Shares had been "make or break" heading into earnings, with AMAT down at trend line support, but the earnings pop means that the uptrend is holding and there's more room for this rally. Year-to-date, Applied is up 27%.
-- Written by Jonas Elmerraji in Baltimore.