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 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 for those 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 with the Fed's rate hike decision in play this afternoon.
- Nearest Resistance: $115.75
- Nearest Support: $107.50
- Catalyst: Fed Rate Decision, Technical Setup
Perhaps unexpectedly, Apple (AAPL) is seeing big volume surrounding the Fed rate decision. That's because, with more than 20% of its market cap paid for in cash and short-term investments on its balance sheet, Apple's treasury management has been a challenging situations during this low-rate environment. Even a small interest rate increase could materially impact just how much income Apple's mountain of cash reserves throw off.
There's also a technical story brewing in Apple right now. Shares had been in a well-defined uptrend since August, but they violated that uptrend last week. That puts Apple's ability to move higher in question -- but it's prudent to wait and see how the broad market reacts to the Fed decision today before calling the uptrend in Apple officially dead.
Apple is a holding in the Action Alerts PLUS Charitable Trust Portfolio, co-managed by TheStreet's Jim Cramer and Jack Mohr. Earlier this week, Cramer said the stock was cheap, even if it lacked momentum. Today, in a post for Action Alerts PLUS, Cramer and Mohr again addressed lowered analyst expectations for both iPhone sales and Apple's earnings per share:
"All in all, we view recent supply-chain concerns as exaggerated, and advise subscribers to take the headline noise with a grain of salt, as the company's fundamental growth story remains intact, long term. Given Apple's enduring ability to draw in consumers and engender unparalleled brand loyalty, we do not expect a sudden reversal of demand for their products."
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- Nearest Resistance: $60
- Nearest Support: $47.50
- Catalyst: Tax Credit Extension
SolarCity (SCTY) is having a huge session today, up more than 25% following news that Congress had agreed to a five-year extension of tax credits for solar equipment production and solar projects, giving this beaten-down stock a shot in the arm. At the same time, news that California legislators had denied utilities' requests to cut payments for solar rooftop customers removed a potential black cloud from the nation's biggest market for solar equipment.
Today's big breakout is ending the downtrend that's been in place in SolarCity for most of 2015. From here, a re-test of prior highs at $60 looks likely.
- Nearest Resistance: $7.50
- Nearest Support: $5
- Catalyst: Tax Credit Extension
Another solar stock that's benefitting from the news in solar tax credits is SunEdison (SUNE) , a stock that's been one of the most volatile names on the Nasdaq this year.
Shares started forming a bottom in late November, and today's 15% breakout looks like it's triggering a buyable move in the near-term. That said, the longer-term downtrend in SunEdison isn't over until buyers can push this stock back above $7.50.
- Nearest Resistance: $74
- Nearest Support: $64
- Catalyst: Heartland Acquisition
Finally, shares of $9 billion payment services stock Global Payments (GPN) are seeing a 10% correction on big volume, following the announcement that the firm is acquiring Heartland Payment Systems (HPY) in a cash and stock deal worth approximately $4.3 billion. Heartland shareholders will receive $53.28 per share in cash, plus 0.6687 shares of Global Payments for every HPY share they own.
From a technical standpoint, the drop in Global Payments puts shares at the bottom of the uptrend that shares have been trading within since the beginning of the summer. That makes a bounce off of trendline support buyable in Global Payments this winter. On the flip side, a violation of support just below $64 signals that the uptrend is over in this payments stock.