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: $1.40
Nearest Support: N/A
Catalyst: Stock and Warrant Sale
Small-cap biopharmaceutical stock Galena Biopharma (GALE) is selling off 20% this afternoon, smashed lower by the firm's stock and warrant offering, a dilutive move that management plans to put towards funding operations. Galena's 24.36 million-unit offering represents an 18% immediate dilution for investors, and it comes with an additional warrant-per-unit to purchase 0.5 shares at a $2.08 exercise price.
From a technical standpoint, GALE's chart is broken. Shares are falling through prior support at $1.40 as a result of the announcement -- that level is going to act as a challenging resistance level on the way back up. Buyers beware.
Nearest Resistance: $2.50
Nearest Support: $2
Catalyst: Q4 Earnings, Guidance
Small-cap biopharmaceutical stock CTI BioPharma (CTIC - Get Report) is seeing a second week of huge trading volume, shoved down 23% this afternoon following fourth quarter earnings and a 2015 guidance cut. CTIC lost 27 cents for the quarter, a number worse than the 18-cent loss Wall Street was expecting. Importantly, CTIC's 10-K filing also included new preliminary data for pacritinib, its marrow cancer treatment, which some biotech-watchers are comparing negatively with competing treatments.
As expected, the event risk in CTIC overshadowed the breakout that shares undertook at the beginning on the month. Any excess buying pressure has been overtaken by increasingly eager sellers.
Nearest Resistance: N/A
Nearest Support: $2
Catalyst: Technical Setup
Rounding out the list of small-cap biotech stocks grabbing big volume is Amarin (AMRN - Get Report). Amarin has long been a popular biopharma name for small-cap traders, and that's continuing to be the case this week as buyers pile into a bullish technical setup. Shares cleared prior resistance at $2, breaking out to new highs this afternoon. Buyers are clearly in control here.
Making new highs is significant from an investor psychology standpoint because it means 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. For traders who want to ride the bullish momentum, there's still time to build a position in AMRN now -- just bear in mind that $2 is the closest logical place to park a protective stop, and that's a long way down from here.