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: $22
- Nearest Support: $18.50
- Catalyst: Buyout Speculations
Leading things off today is social networking giant Twitter (TWTR) . Twitter is up nearly 6% this afternoon, boosted by comments from co-founder Evan Williams on Bloomberg TV. Williams said that Twitter is in "a strong position" from an M&A standpoint, fueling speculation that the firm is fielding buyout offers. Williams' statements may be vague, but they're proving to be enough to get investors excited today.
From a technical standpoint, Twitter is in good shape. The firm has been in a well-defined uptrending channel since shares bottomed back at the beginning of the summer, and today's most recent swing higher coincides with the latest test of trendline support. Now looks like a good opportunity to be a buyer in Twitter.
- Nearest Resistance: $29
- Nearest Support: $28.86
- Catalyst: Dell Deal
Computer storage giant EMC (EMC) is seeing a hike in trading volume this week following reports that the firm's long-awaited deal to be acquired by Dell is set to close on Sept. 7. The deal will be the biggest technology deal in history and has been in process for nearly a year as the pair awaited regulatory approvals. EMC shareholders will receive $24.05 per share in cash, plus a tracking stock that's linked to EMC's stake in VMWare (VMW) .
At this point, most of the money has been made on the EMC trade. With the deal a week away from closing, it makes sense for investors to look elsewhere for upside opportunities in this market.
- Nearest Resistance: $13.25
- Nearest Support: $12
- Catalyst: Q2 Earnings
Apparel stock Chico's FAS (CHS) is up big this afternoon, rallying almost 13% on big volume today following the firm's second-quarter earnings call. Chico's reported an adjusted second-quarter profit of 25 cents per share, edging out the 22-cent best guess that Wall Street had been hoping for. That earnings-fueled push higher is sending Chico's FAS into breakout territory this afternoon.
CHS' price chart looks attractive here. Shares had been forming an ascending triangle since the beginning of August, and the pattern finally triggered a buy thanks to today's push through prior resistance up at $12. From here, look for a potential secondary breakout if Chico's can push above its multi-month highs nearby at $13.25.
VanEck Vectors Gold Miners ETF
- Nearest Resistance: $30
- Nearest Support: $25
- Catalyst: Spot Gold Correction
All year long, the VanEck Vectors Gold Miners ETF (GDX) has been one of the most popular ways to play the sustained rally in gold prices. And now, as spot gold corrects this month, GDX is holding onto investors' attention as this big ETF moves to the downside.
GDX spent most of this year in a very well-defined uptrending channel, a price setup that got violated earlier in August. Now that gold miner rally is very much in jeopardy. While GDX's recent retracement could still be just a correction at this point, it makes sense to avoid shares until they can start establishing some higher lows once again.
U.S. Oil Fund
- Nearest Resistance: $13.50
- Nearest Support: $9.75
- Catalyst: Spot Crude Oil
Another commodity-centric ETF that's getting big trading volume this afternoon is the U.S. Oil Fund (ETF) , a $3 billion commodity pool that's one of the most popular ways for traders to get exposure to the up and down moves in crude oil prices. USO ended a correction at the start of August, and it's been moving higher ever since, save for last week, when commodity prices broadly rolled over again.
At this point, USO's long-term uptrend is still intact, implying a buying opportunity on the next test of trendline support. At this point, support at $9.75 is the line in the sand to watch if you're looking for a buying opportunity in USO. If this ETF can bounce off of that price line, we've got a pretty clear-cut buy signal.
- Nearest Resistance: $5.75
- Nearest Support: $4
- Catalyst: Technical Setup
After spending the last few trading sessions rallying hard, shares of $2.4 billion mortgage insurer Genworth Financial (GNW) are correcting just as violently this afternoon, down almost 10% on big trading volume. Genworth's biggest benefactor was the Fed late last week, as Janet Yellen's comments propelled the price action in the entire insurance industry; Genworth was just one of the most prominent examples.
Today's correction isn't all that significant from a technical standpoint, however, and that means that shares could still have considerable room for an upside move from here. Wait for the correction to run its course first if you're looking for a buying opportunity in this active financial sector trade.
- Nearest Resistance: $45
- Nearest Support: $38
- Catalyst: Q2 Earnings
Cloud-based software stock Veeva Systems (VEEV) is up 7.2% this afternoon, rallying hard compared to the rest of the broad market thanks to bullish second-quarter earnings results. Veeva reported a second-quarter profit of 15 cents per share, slightly edging out analysts' expectations and the firm's own prior estimates of 13 cents. Likewise, Veeva upped its profit expectations for the full year, boosting its forecast above the high-end of its prior range.
Technically, Veeva looks attractive here. Shares have spent most of 2016 in a well-defined uptrend, and today's earnings rally is being boosted by a test of trendline resistance at yesterday's close. Look for shares to make an attempt toward the top of their price channel as we flip the calendar over to September.