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.
Nearest Resistance: $2.50
Nearest Support: $1.25
Catalyst: Upgrade, Bailout Details
Shares of forex trading firm FXCM (FXCM) are up 50% this afternoon, rallying after a colossal selloff in Tuesday's session. FXCM needed emergency cash from Leucadia National (LUK) in the wake of the unexpected Swiss franc rally at the end of last week. Shares plummeted on the bailout announcement, the terms of which give LUK control over the majority of FMCM's equity. Today's pop comes on the heels of an upgrade from Keefe Bruyette & Woods that suggested shareholders could reclaim more value than originally expected.
Even so, buying FXCM here is more of a lottery ticket than a high-probability setup. The dust is still far from settled on the deal. Inexperienced traders would be better off leaving this one alone.
Nearest Resistance: $7.50
Nearest Support: $6.50
Catalyst: Less Government Intervention
Petrobras (PBR - Get Report) has been one of the most sensitive stocks on the market in terms of geopolitical factors over the past year, and today's 6% pop in shares is, not surprisingly, more of the same. PBR is up today following reports from Brazilian outlet Valor Economico that the government will significantly reduce its intervention in fuel prices, a move that takes some pressure off of PBR's income statement as oil prices plunge.
PBR broke its downtrend in January, but it's still early to make a bet that shares till head higher from here. After all, the drag of crude oil prices hasn't quite abated, leaving PBR with a big external challenge to face. If shares can push through prior resistance at $7.50, it makes a good tactical buying candidate.
Nearest Resistance: $6
Nearest Support: $4.75
$1.1 billion biopharmaceutical company Arena Pharmaceuticals (ARNA - Get Report) is down nearly 9% this afternoon, swatted lower by news that the firm would be issuing 21 million shares to raise money, taking advantage of a rebound from earlier in the year. The new share issuance represents an 8.7% dilution for shareholders as of today.
ARNA is testing a key support level at $4.75 this afternoon, making a bounce higher from here look likely. Arena, like a lot of other biopharmaceutical plays, has been pretty volatile in 2015, and that means that traders should exercise extra caution if they decide to get in on the bounce off of $4.75.
Nearest Resistance: $2.60
Nearest Support: $2.20
Catalyst: Q4 Earnings
Chipmaker Advanced Micro Devices (AMD - Get Report) is up 4.5% this afternoon, boosted by the firm's fourth-quarter earnings call. On a non-GAAP basis, AMD ended the quarter at breakeven on $1.24 billion in revenues – while that result may not exactly instill excitement, it's a "good enough" number for long-suffering shareholders. In the past year, AMD has shed 43% of its market value, falling down to small-cap status.
AMD's chart still looks pretty bad. Shares have been in a well-defined downtrend since this past summer, and while AMD is catching a bid at $2.20 support, sellers still look like they're in control here. I'd recommend against going long until this stock can crack above its 50-day moving average. That'll mean an end to the downtrend…
-- Written by Jonas Elmerraji in Baltimore.
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 that 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