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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Burger King Worldwide
Nearest Resistance: $32
Nearest Support: $27.50
Catalyst: Tim Horton's Talks
Burger King Worldwide (BKW) is getting considerable attention -- and trading volume -- following news that the firm is contemplating acquiring Canadian coffee and donut shop Tim Horton's (THI) in a deal that would also move the combined company to Canada for tax savings. Tax inversions have become a hot button issue in recent months, as more U.S. companies flee the comparatively high tax rates here at home in favor of cheaper operating costs abroad.
However you feel about the politics of the Burger King move, you can't argue with the price action. BKW rallied hard at the open this morning, gapping up around 17% on the news. While the arrangement hasn't been finalized yet, the mere prospect of a merger is proving to be enough to propel shares of the fast food chain. If you can stomach the event risk, there might be more upside here. That said, it only makes sense for traders with big risk appetites.
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Qihoo 360 Technology
Nearest Resistance: $110
Nearest Support: $93
Catalyst: Q2 Earnings
Shares of Chinese anti-virus software firm Qihoo 360 Technology (QIHU) are down 8.7% this afternoon, swatted lower on big volume following the firm's second-quarter earnings call. For the quarter, QIHU reported non-GAAP earnings of 50 cents per share, beating 46-cent Wall Street estimates, but it missed on its third quarter forecasts, causing investors to sell off shares into this afternoon.
Even though Qihoo is down big this afternoon, it's not out -- at least not yet. Shares are holding trend line support as I write, potentially bouncing off of that same support level for the sixth time since shares bottomed back in May. If QIHU has a white bar day tomorrow, it looks like a good opportunity for a low-risk entry in this $12 billion software stock. Otherwise, if shares violate the 200-day moving average, a test of its next support level at the 200-day moving average looks likely.
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Nearest Resistance: $76
Nearest Support: $74
Catalyst: Burger King Deal
The other side of the Burger King deal is Tim Horton's (THI) , the $8.5 billion Ontario-based coffee chain that weighs in as the biggest in Canada. THI is up more that 22% on the potential buyout, as investors project Burger King's potential offer onto shares. That's rocketing shares to new highs this afternoon on the biggest trading volume this name has seen all year.
Tim Horton's trading has been range-bound of most of 2014, and while a breakout on positive earnings earlier this month made THI a technical buy again in August, today's gap higher means that shares have already achieved their price objective. For traders looking for a "lottery ticket," Tim Horton's isn't a bad choice here, but there's a lot of event risk and uncertainty baked into shares right now.
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Nearest Resistance: N/A
Nearest Support: $33.50
Catalyst: Technical Setup
A big technical setup is driving a high-volume breakout in shares of investment bank Morgan Stanley (MS) this afternoon. MS has been forming a long-term ascending triangle setup all year long, bouncing its head on resistance at $33.50 four times since January. Today's 3% move higher is breaking shares out above that long-term price ceiling and onto new highs. That makes MS look buyable here.
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.
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-- Written by Jonas Elmerraji in Baltimore.