How to Trade the Market's Most-Active Stocks: KBH, BBBY, ACOR

 

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.

Acorda Therapeutics

Nearest Resistance: $40
Nearest Support: $29
Catalyst: Civitas Acquisition

Small-cap biopharma firm Acorda Therapeutics (ACOR) made the most-actives list on Wednesday after the firm blasted 28% higher during the session on acquisition news. No, it wasn't Acorda that was getting acquired. Instead, ACOR announced that it was purchasing Civitas Therapeutics, the developer of an experimental Parkinson's disease treatment.

The news broke ACOR out of a downtrend that had harangued shares since the first quarter, but that doesn't mean you should jump into this name just yet. Shares are within grabbing distance of an important resistance level at $40, a level that's swatted down ACOR's buying pressure in the past. At this point, it makes sense to wait to see if this name can catch a bid above $40 before buying here.

Bed Bath & Beyond

Nearest Resistance: $70
Nearest Support: $66
Catalyst: Q2 Earnings

Earnings were this week's driver for upside in shares of retail chain Bed Bath & Beyond (BBBY) . The firm announced that it earned second-quarter profits of $1.17 a share, besting analysts' consensus guess of $1.14. Besides better earnings numbers, sales growth climbed more than expected at BBBY's stores, giving it a best-in-breed story at the same time investors are starting to get anxious about retail.

BBBY showed traders a minor breakout through $66 on Wednesday, clearing the way for a retest of prior resistance at $70. If Bed Bath & Beyond can break above that $70 price ceiling, it's a buy. Until then, it's not a high-probability trade.

KB Home

Nearest Resistance: $17.50
Nearest Support: $15.50
Catalyst: Q3 Earnings

Residential homebuilder KB Home (KBH) dropped more than 5% on Wednesday, dragged lower thanks to a third-quarter earnings miss. KBH earned 28 cents a share for the quarter, falling short of the 40-cent average estimate that Wall Street was looking for. The switch to a new mortgage partner was a major reason why some home sales got delayed through the end of the quarter.

Technically speaking, KBH's breakdown this week shoved shares down to test a key support level at $15.50. As long as that price floor remains intact, KBH is worth holding, but I'd become a seller on any violation of that $15.50 level.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in the names mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji

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