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.
Bank of America
- Nearest Resistance: $14
- Nearest Support: $13
- Catalyst: Buybacks
Bank of America (BAC - Get Report) ended the week on a strong note, thanks to news that the bank's board had approved a share buyback up to $800 million. The buyback will offset investor dilution that was slated to take place as a result of stock-based compensation for executives. The news was good enough for a 3% boost on Friday, a jump that brought shares within grabbing distance of breakout territory.
From a technical standpoint, Bank of America has been looking "bottomy" for a while now. The firm has spent most of 2016 forming a textbook inverse head and shoulders pattern that triggers a buy signal with a close above $14 resistance. If shares can shove their way above that $14 price level, BofA becomes a buy.
"On Friday, BAC announced that its board had authorized up to $800 million in buybacks through the end of the second quarter on top of the $4 billion existing authorization and in addition to the previously Fed-approved share repurchase amounts from 2015. We view this as a net positive for Bank of America, both strategically as a means to efficiently redeploy excess capital while also signaling how far the bank has come in terms of its relationship with regulators. That said, we remain a bit skeptical on the bank's operating model given expectations for weak investment banking fees and trading activity as well as expected increase in provisions related to its energy loan exposure. We remain on the sidelines for now and reiterate our $16 price target."
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Columbia Pipeline Group
- Nearest Resistance: $25.50
- Nearest Support: $23
- Catalyst: Acquisition
The Columbia Pipeline Group (CPGX) saw a second straight week of upside last week, rallying after Canadian energy infrastructure firm TransCanada (TRP - Get Report) announced that it was buying the $10 billion pipeline firm for $25.50 per share in cash. The deal didn't come as a total surprise to investors. Rumors first hit a week ago that the deal was likely to happen, but the official announcement was good for a nearly 6% pop in shares Friday.
At this point, shares have a tiny 2.4% premium left in them as of last week's closing prices. That means that the money's already been made on the Columbia Pipeline trade.
Starwood Hotels & Resorts Worldwide
- Nearest Resistance: $85
- Nearest Support: $80
- Catalyst: Rival Bid
On Friday, luxury hotelier Starwood Hotels & Resorts Worldwide (HOT) announced that it had received a new acquisition bid from a consortium of investors -- a bid that comes in superior to the offer made by Marriott International (MAR - Get Report) . The new offer would hand investors $78 per share in cash, plus additional consideration from a previously announced spinoff. All told, that brings the deal value for shareholders to $85.80 per share at current prices.
Technically speaking, Starwood is breaking above $80 resistance in March, a level that's now serving as support. And while there's still about a 7% risk premium left in this stock right now, the headline risk surrounding the acquisition offer makes it a trade that's not for the risk-averse.
- Nearest Resistance: $13
- Nearest Support: $10.50
- Catalyst: Technical Setup
After the huge rally in offshore drillers this month, Transocean (RIG - Get Report) is consolidating sideways. Transocean broke free of its long-term downtrend at the beginning of March, rallying hard up to $13 resistance before retracing and falling into a sideways range with a price floor at $10.50.
As long as that $10.50 support level remains intact, Transocean remains a worthwhile rebound trade. Wait for shares to trade above $11.50 again before trying to buy it.
Advanced Micro Devices
- Nearest Resistance: $3
- Nearest Support: $2.50
- Catalyst: Intel Licensing Rumors
Shares of midcap chipmaker Advanced Micro Devices (AMD - Get Report) ended Friday on a high note, rallying 4.6% by the close on reports that giant rival Intel (INTC - Get Report) could be interested in licensing some of its graphics patents. The prospect of Intel partnering with AMD was enough to get investors excited enough to bid shares to levels not seen since 2015.
From here, $3 resistance is a major barrier for AMD buyers to take on. Shares previously got swatted down from that perch back in late December, tumbling by about 50% before they rebounded alongside the rest of the broad market in February. If buyers can muster the strength to bid shares above $3, consider it an important buy signal in AMD for 2016.
- Nearest Resistance: $8
- Nearest Support: $6.50
- Catalyst: Analyst Upgrade
An upgrade from Credit Suisse following Cemex's (CX - Get Report) investor day in New York is proving enough to drive buyers back into this Mexican construction material stock. Cemex closed last week 13% than it started, and half of that upside came on Friday after the upgrade.
Technically speaking, this stock has been looking attractive since early March, when shares finally broke the downtrend that had harangued shares since last fall. Now, with a minor resistance level at $6.50 out of the way, expect a test of $8 to come next for Cemex.
- Nearest Resistance: $72.50
- Nearest Support: $70
- Catalyst: Q4 Earnings
Luxury jeweler Tiffany (TIF - Get Report) saw a modest bounce last week, capping off the week with a modest earnings win. Tiffany reported fourth-quarter profits of $1.46 per share, just beating analysts' best guess number of $1.40. That earnings win was enough to spur a small 2.9% jump on high volume on Friday.
The bigger story in Tiffany is the technical picture that's shaping up right now. Shares have been stock in a downtrend since last summer, but that downtrend is being tested this week with the earnings jump. At this point, we're still to close to the trend line to call the breakout in Tiffany "confirmed" -- but we'll likely get an answer either way in the week ahead. If Tiffany extends its upside in Monday's session, we've got an important buy signal here.