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: $56
- Nearest Support: $54
- Catalyst: Acquisition
Mid-cap medical equipment stock Alere (ALR) is seeing a huge-volume rally this afternoon, up more than 45% following the announcement that Abbott Labs (ABT - Get Report) is buying the smaller firm for $56 per share in cash.
The last year has been a challenging one, shoving shares of Alere lower in a well-defined downtrend. But today's acquisition news erases that share price retreat, shoving shares back up to their 52-week highs. At this point, though, the money's already been made on Alere. Shares currently have a tiny 3.7% risk premium left in them. Investors who didn't already own this stock are better off looking elsewhere for gains.
- Nearest Resistance: $115
- Nearest Support: $95
- Catalyst: Technical Setup
Buying pressure is spilling into the new week for shares of Facebook (FB - Get Report) . This social media giant rallied more than 14% last week thanks to better-than-expected earnings results, and shares are pushing up to test the top of their price channel this afternoon.
The fact that Facebook is touching trend line resistance makes a correction look likely in shares next -- that resistance line has served as a reversal point the last two times it was tested. A sideways correction, like the one Facebook experienced last fall, is the more likely move considering the strength of the earnings bounce last week. Buyers are still in control of shares here, but it makes sense for Facebook to bleed off some overbought momentum before jumping in.
Facebook is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. "All in all, we are completely blown away by Facebook's quarter where it outdid expectations across the board," wrote Cramer and portfolio co-manager Jack Mohr recently. "The company and its agile management team are outdoing their peers in all categories and they are just getting started on what is promised to be a long, profitable journey."
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- Nearest Resistance: $18.50
- Nearest Support: $17
- Catalyst: Silver Lake Deal
Twitter (TWTR - Get Report) is bouncing higher on big volume today, following reports that Twitter is involved in talks with investor Mark Andreessen and private equity firm Silver Lake for "some sort of deal."
Twitter's shares have struggled recently, tumbling more than 51% in the last 12 months to new all-time lows. Longer-term, Twitter is beginning to look "bottomy," though. Shares have a resistance level up at $18.50 that, if taken out by increasingly eager buyers, would signal additional technical upside in this technology stock.
Twitter is another Action Alerts PLUS holding, but Cramer and Mohr rank the stock as a Three, meaning they would sell it on strength. "Twitter is not only our smallest position but has been our sole Three-rated name for over eight months,"," they wrote this morning. "It is beyond a show-me story, and we have no reason to be optimistic around any near-term turnaround in core trends."
Exclusive Look Inside: You see Jim Cramer on TV. Now, see where he invests his money and why Twitter is a core holding of his multi-million dollar portfolio.
Want to be alerted before Jim Cramer buys or sells TWTR? Learn more now.
Market Vectors Gold Miners ETF
- Nearest Resistance: $17
- Nearest Support: $13
- Catalyst: Gold Prices
The Market Vectors Gold Miners ETF (GDX - Get Report) is seeing big volume this afternoon, up 1.5% on moves in gold prices. Because gold mining stocks are effectively a leveraged bet on gold prices, this ETF has become a favorite among investors looking to capitalize on big price swings in the precious metal. And technically speaking, shares of GDX are finally starting to look attractive in the very long-term.
Since this past summer, GDX has been forming a very long-term double bottom pattern, a bullish reversal setup that triggers a buy signal with a breakout above $17. Shares are obviously far from that breakout buy level this winter – but they're getting closer. If $17 gets taken out, GDX becomes a buy.