How to Trade the Market's Most-Active Stocks: JNS, PBR, TIBX, ATHL

 

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.

Tibco Software


Nearest Resistance: $24
Nearest Support: $23.50
Catalyst: Going Private

$3.2 billion software name Tibco Software (TIBX) rallied more than 21% on Monday, boosted by news that private equity firm Vista Equity was planning on acquiring the firm for $4.3 billion, or $24 per share. Shares shot up to the offer price on the announcement, less a small 1.5% risk premium -- that's the value that investors are putting on the possibility that Tibco's going private transaction won't complete. Put another way, it's very likely this deal will close.

Technically speaking, the money has already been made on this stock. While the $24 deal price is cold comfort to investors who paid more per share than that less than a year ago, that doesn't change much. Because of the tiny risk premium, there's not much in the way of potential upside here.

As of the most recently reported quarter. Tibco was one of George Soros' top holdings.

Petrobras


Nearest Resistance: $16
Nearest Support: $13
Catalyst: Brazil Election

Politics are driving Brazilian equity prices for yet another trading session, and nowhere is that more apparent than in the country's mega-cap oil and gas firm Petrobras (PBR) . PBR sold off more than 10% on Monday, swatted lower by a new poll that showed greater-than-expected support for incumbent Dilma Rousseff, a president who has pushed state intervention in Brazil's nationalized companies.

Technically speaking, the drop on Monday wasn't surprising. PBR broke through a key support level at $16 last week, clearing the way for lower ground. From here, there's a lot more downside risk in PBR. Risk-averse traders should wait for the election-related event risk surrounding the election to go away before building a position in this name.

Athlon Energy


Nearest Resistance: $58.50
Nearest Support: $58
Catalyst: Acquisition News

Athlon Energy (ATHL) was another big mover on Monday, up close to 25% following the announcement that larger energy producer Encana (ECA) was acquiring Athlon for $58.50 per share. Including debt assumption, Athlon's total price tag works out to $7.1 billion for Encana. For that, ECA gets access to approximately 140,000 acres in the Permian Basin, dramatically increasing Encana's domestic reserves.

This is another trade where the money has already been made. Athlon gapped up to within a few cents of its deal value at the open on Monday and stayed in a tight range with a tiny risk premium factored in. The two companies expect to close the deal before year-end.

Janus Capital Group


Nearest Resistance: $16
Nearest Support: $12.75
Catalyst: Analyst Note

Janus Capital Group (JNS) corrected on Monday, following Friday's big coup surrounding bond guru Bill Gross. The small-cap fund manager scored a big gain with Gross' hiring, and shares went berserk as a result. The 7.5% drop this week came from an analyst note at JPMorgan that doubted Gross' ability to materially impact assets under management at Janus in the long-term.

Technically, the Janus trade has a lot of downside risk baked into it right now. Support at $12.75 is a long way away, while $16 has already established itself as a level that can swat away buyers. I'd recommend staying away from JNS at these levels, or best-case, at least until it can catch a bid above $16.

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

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

 

 

 

Follow Stockpickr on Twitter and become a fan on Facebook.

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

More from Investing

Buffett Buys More Apple, General Motors and Goldman Sachs

Buffett Buys More Apple, General Motors and Goldman Sachs

Fisker CEO: Autonomous Electric Shuttle Will Debut Soon at Major Tech Company

Fisker CEO: Autonomous Electric Shuttle Will Debut Soon at Major Tech Company

Tapestry CEO Talks Trade, Kate Spade Revival and Selena Gomez

Tapestry CEO Talks Trade, Kate Spade Revival and Selena Gomez

Rewind: Jim Cramer on Home Depot, Tapestry, Nordstrom and Square

Rewind: Jim Cramer on Home Depot, Tapestry, Nordstrom and Square

What to Expect From Nordstrom on Thursday

What to Expect From Nordstrom on Thursday