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: $56
Nearest Support: $40
Catalyst: Q2 Earnings
Shares of software firm Splunk (SPLK) are up more than 20% this afternoon, boosted following the firm's second quarter earnings release for fiscal 2015. Splunk reported earnings of 1 cent for the quarter, besting analysts' expectation of a 2-cent loss. More importantly, the firm sees third quarter revenues above the range Wall Street was hoping for, citing more than 500 new customers as a driver for growth.
Splunk's chart looks bullish right now. Shares started off the year in an ugly downtrend, but that trend broke at the start of the summer, and shares have been looking "bottomy" ever since. A breakout above the $56 resistance level is the signal that it's time to be a buyer in SPLK.
RF Micro Devices
Nearest Resistance: $12.50
Nearest Support: $11
Catalyst: Sympathy Mover
Shares of radio frequency chipmaker RF Micro Devices (RFMD) are rallying 4.5% on big volume this afternoon, moving higher thanks to increased bullishness following a peer's earnings call. RFMD is popping following third quarter numbers at Avago Technologies (AVGO) , the latest in a series of "sympathy moves" driven by success at peers this summer.
It's not totally surprising that RFMD is rallying on the slightest hint of bullish news: this stock has been a "buy the dips" name since the start of March, bouncing its way higher in a well-defined uptrending channel. For investors looking for an entry opportunity in RFMD, it makes sense to wait for the next bounce off of trend line support before taking a position.
Nearest Resistance: $7
Nearest Support: $5.75
Catalyst: Technical Setup
Daily deal site Groupon (GRPN) is seeing a 3% rally this afternoon, moving higher for technical reasons. Groupon has been forming an ascending triangle bottom since the beginning of May, bouncing its way higher in between horizontal resistance up at $7 and uptrending support to the downside.
Today's test of $7 is just the latest attempt from buyers to push shares through that long-term price ceiling. Until that level gets taken out, it makes sense to sit on the sidelines. Once shares can catch a bid above the $7 level, then upside becomes the high-probability trade.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.