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: $21
- Nearest Support: $20.81
- Catalyst: Acquisition
Small-cap biotech stock Vitae Pharmaceuticals (VTAE) is up more than 158% this afternoon, boosted following news that Allergan (AGN) (which is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio) was offering to buy the smaller company for $21 per share in cash. That is driving enough volume in to Vitae to make this small firm one of the most actively traded stocks on the Nasdaq this morning.
The deal adds Vitae's psoriasis and dermatitis treatments to Allergan's pipeline, filling out the company's skin health offerings. Allergan sees the deal closing by year-end -- and the near-immediate gap up to the offer price this morning signals that Wall Street is pricing in a high likelihood of the deal getting done.
For traders who missed the buyout, the money has already been made on the VTAE trade.
- Nearest Resistance: $120
- Nearest Support: $112
- Catalyst: iPhone Presales
Apple (AAPL) , a holding in Jim Cramer's Action Alerts PLUS charitable portfolio, is up 4% on big volume as I write this afternoon, rallying following early presales numbers for the firm's iPhone 7 and iPhone 7 Plus, which were reported by T-Mobile (TMUS) and Sprint (S) yesterday. T-Mobile CEO John Legere reported that sales were "like four times bigger than the iPhone 6 for us at the pre-order stage," with Sprint adding that preorders for the next-gen phones are up 375% versus the same period last year. That sneak peek at sales numbers is sending Apple upwards for the second straight session.
The technical picture has something to do with Apple's price strength here. Shares are breaking above an important resistance level up at $111, a price level that's acted like a ceiling for shares since April. From here, prior highs around $120 look like the next target for Apple to take out on the way up.
- Nearest Resistance: $13.75
- Nearest Support: $11.75
- Catalyst: Lower Guidance
Meanwhile, Ford Motor (F) is correcting nearly 2% this afternoon following the announcement that financial performance is set to decline next year as it increases spending on driverless and electric cars. The R&D bump is planned to help Ford push its way to a planned 2021 introduction of a driverless car, a product intro that the firm sees as a material contributor to its overall business in the years ahead.
Technically speaking, Ford's correction today is the latest in a series. Shares have been in a downtrend for much of 2016, and today's drop only brings this stock a little closer to trendline support at $11.75. Until Ford can start establishing some higher lows, it makes sense to steer clear of this stock for the time being.
- Nearest Resistance: $110
- Nearest Support: $107
- Catalyst: Acquisition
Monsanto (MON) is one of the biggest stock stories this afternoon, up slightly following news that Bayer AG had agreed to buy the firm in a deal valued at $66 billion. That update finishes four months of negotiations that will create the world's biggest agrichemical business. Bayer will pay $128 per share in cash for Monsanto, an offer price that still represents about a 20% premium to shares' current trading price. That gap between the offer price and Monsanto's current trading range represents the risks that Wall Street is pricing in that regulatory hurdles will get in the way of the acquisition being completed. In the meantime, the companies expect the deal to be completed by the end of next year.
With considerable room left on the way up to Monsanto's offer price, this stock's uptrend looks particularly important. If shares keep bouncing their way higher from a technical standpoint, then this stock could still rally appreciably before hitting any meaningful amount of resistance.
VanEck Vectors Gold Miners ETF
- Nearest Resistance: $32
- Nearest Support: $26
- Catalyst: Spot Gold
The VanEck Vectors Gold Miners ETF (GDX) is attempting to find its footing this week, slightly higher this afternoon following a violation of this ETF's uptrend in mid-August. GDX has been one of the most popular ways to play the massive uptrend in gold miners in 2016, and while the trend has lost some steam in recent weeks, shares could be establishing a new, less aggressive uptrend in September.
If GDX can manage to bounce from here, it could signal a buying opportunity for traders who don't own this gold trade yet.
Advanced Micro Devices
- Nearest Resistance: $7
- Nearest Support: $5.50
- Catalyst: Technical Setup
Advanced Micro Devices (AMD) is bouncing 2% on big volume for technical reasons this afternoon, catching a bid as this actively-traded chipmaker tries to establish a price floor just above $5.50.
AMD has been an extremely active rebound trade in 2016, but shares broke their uptrend at the beginning of the month when the firm timed a share offering at the exact same time the broad market got swatted lower from its prolonged sideways range. If AMD can successfully find a floor at $5.50, it could be the start of a new, less aggressive uptrend.
But it's too early to say for sure at this point whether that's the case. AMD is best avoided until shares can establish some higher lows.
- Nearest Resistance: $37.50
- Nearest Support: $25
- Catalyst: FDA Staffing
Finally, small-cap biopharma firm Sarepta Therapeutics (SRPT) is up 23% this afternoon following reports that an FDA reviewer who's been critical of the firm's muscle disease drug is no longer with the agency. The staffing change is leading some investors to bet on higher odds for approval while the firm awaits an FDA decision.
Long-term Sarepta is in an uptrend from its late-April lows right now, a price setup that suggests the possibility of higher ground ahead for this stock. At this point, it's not too late to be a buyer in Sarepta, but it's a prudent move to park a protective stop on the other side of support at the 50-day moving average. If that line gets violated, then the uptrend in Sarepta is over and you don't want to own it anymore.