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.
- Nearest Resistance: $31.90
- Nearest Support: $26.50
- Catalyst: Acquisition
Up first on our list of today's most-active stocks is EMC (EMC) . After rumors hit late last week that Dell was in talks to acquire EMC, the two companies confirmed the news this morning. Shares are up just over 1% on huge volume this afternoon, the result of most of the upside move in EMC coming last week. At current price levels, Dell's offer for EMC is worth approximately $31.90 per share. Of that offer price, $24.05 is cash.
Investors are still pricing in considerable uncertainty over the deal, leaving about a 13% risk premium on the table as of this writing. That leaves some meat on the bones for traders who aren't spooked by the odds of this acquisition falling through in the coming months.
- Nearest Resistance: $74
- Nearest Support: N/A
- Catalyst: EMC/Dell Merger, Q3 Numbers
$29 billion tech stock VMware (VMW - Get Report) is seeing some collateral damage following news of Dell's acquisition of EMC. VMware is selling off more than 10% as I write this afternoon, following the details of the buyout offer. The revelation that Dell will introduce a tracking stock for EMC's majority VMware stake also means that VMware's float will effectively increase, potentially applying downside pressure on existing shares. That development was enough to overshadow the firm's solid preliminary third-quarter earnings numbers.
Today's violation of VMware's downtrending channel means that this stock is broken from a technical standpoint. It makes sense to avoid VMware until shares are able to catch a bid again.
- Nearest Resistance: $20
- Nearest Support: $17
- Catalyst: Guidance Cut
Indian IT services firm Infosys (INFY - Get Report) is selling off 6.4% lower this afternoon, after management announced lower-than-expected guidance for the rest of the fiscal year. The firm also announced the resignation of its chief financial officer, Rajiv Bansal.
Even though shares are down significantly today, this stock is still holding onto its uptrend, catching a bid right at the $17 trend line support level. That makes a bounce up from here look like a solid buying opportunity in Infosys.
- Nearest Resistance: $30
- Nearest Support: $25
- Catalyst: Management Shakeup
Finally, shares of Twitter (TWTR - Get Report) are sliding more than 6% on big volume this afternoon, down after reports surfaced that CEO Jack Dorsey was planning on cutting jobs to improve the firm's efficiency. Twitter has taken heat for slowing user growth in recent quarters, and Wall Street is viewing cut cutting measures as a tourniquet rather than a growth strategy.
Lucky for Twitter shareholders, the chart looks a lot more appealing. Shares have been carving out a rounding bottom pattern since the start of August, and this $20 billion social networking stock has been flirting with a breakout level at $30 for the past several sessions. If Twitter can hold above $30, we've got a fresh buy signal in this beaten-down tech stock.