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: $1.50
- Nearest Support: $1.16
- Catalyst: Phase 3 Results
Topping the charts from a volume standpoint is clinical-stage vaccine company Novavax (NVAX - Get Report) . Shares of this stock ended the week by getting obliterated, selling off more than 84% Friday on the heels of Resolve phase 3 trials that missed objectives. The respiratory virus vaccine performed worse than the placebo during the trials, sending shares plummeting as investors lost faith in the firm's ability to commercialize a treatment.
From a technical standpoint, there's no doubt that Novavax's chart is broken at this point. From here, it's too early to have a clear sign of where Novavax will ultimately find meaningful support. While it probably seems hard to believe for anyone who owned this stock heading into Friday's gap down, shares could still have further to fall from here.
For another technical take on Novavax, check out Bruce Kamich's "Novavax's Chart Looked Good, Until It Didn't."
SPDR S&P 500 ETF
- Nearest Resistance: $220
- Nearest Support: $210
- Catalyst: Market Correction
The SPDR S&P 500 ETF (SPY - Get Report) was near the top of the NYSE's most actively traded issues list again this Friday -- but shares were down a lot less than they were the prior week. Friday came with a correction of only 0.4% for SPY -- and about the same in the S&P 500 index by extension.
Technically speaking, the injection of volatility last week wasn't particularly meaningful. Shares are still holding up their long-term uptrend from 2016's lows, signaling that we might actually be looking at an attractive buying opportunity for the broad market as shares sit near trend line support for the first time since late June. Long-term, SPY is still a buy-the-dips ETF.
- Nearest Resistance: $3.80
- Nearest Support: $3.30
- Catalyst: Telenor Stock Sale
Shares of emerging-markets telecom company VimpelCom (VIP) ended the week on a sour note Friday, selling off more than 6% during the session following news that Nowegian telecom firm Telenor had sold its 8.1% stake in the company at a discount to Thursday's closing price. The Telenor sell transaction took place at a $3.50 share price.
Heavy emerging market exposure precipitated a selloff in VimpelCom in September, causing this stock to violate the bottom of the uptrend that's defined shares all year long. That sudden breakdown means that VimpelCom has just opened up considerable new downside risk here. The glut of supply of shares added by the Telenor sale only exacerbated the situation last week.
With its uptrend broken, it makes sense to steer clear of VimpelCom until this stock can establish some semblance of support again.
- Nearest Resistance: N/A
- Nearest Support: $36.50
- Catalyst: Higher Forecast
Intel (INTC - Get Report) saw a 3% pop on Friday, jumping on big volume following higher forecasted third-quarter sales. The firm now expects to generate $15.6 billion in sales for the third quarter, plus or minus $300 million. That higher guidance comes with generally higher expectations for PC sales in 2016, a stat that's previously been a major stumbling block for component makers like Intel. That good news sent the chipmaker's stock price to the highest levels since 2001.
Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last 52-weeks is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. This recent up move in momentum actually looks like a decent buying opportunity here.
- Nearest Resistance: $120
- Nearest Support: $110
- Catalyst: Technical Setup
In the last five trading sessions, Apple has rallied almost 12%, boosted by reports of higher pre-orders from carriers as well as news from Apple that the firm has already sold out of certain models of the new handset. The upside was helped in part by a technical breakout in Apple that pushed shares higher on a breakout above $110.
From here, shares look likely to make a test of prior resistance at $120, but a little pause isn't out of the ordinary after such a large upside break.
Apple is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. "Overall, AAPL's momentum is undeniable, with an extra boost coming from a slew of analyst notes including raised iPhone estimates," Cramer and Research Director Jack Mohr wrote on Friday. "We go back to our 'own, don't trade' mantra and reiterate our long-term $130 price target."
- Nearest Resistance: $41.50
- Nearest Support: $39
- Catalyst: Q1 2017 Earnings
Enterprise software stock Oracle (ORCL - Get Report) ended the week almost 5% lower, selling off following the firm's miss for the first fiscal quarter of 2017. Oracle reported adjusted earnings of 55 cents per share, coming in slightly below the 58 cent profit that analysts were expecting, on average. Despite making the case that the firm is outperforming its internal expectations on moving users to the cloud, Wall Street wasn't impressed, and shares ended the week lower.
Longer-term, Oracle is down, but it's not out yet. Shares are currently forming an ascending triangle pattern, a bullish continuation setup that's formed by horizontal resistance up above shares at $41.50, and uptrending support to the downside. If shares can catch a bid here at support, the level to focus on becomes $41.50 this fall.
For another technical take on Oracle, check out "Here's When to Buy Oracle After the Post-Earnings Collapse."
- Nearest Resistance: $21
- Nearest Support: $15.50
- Catalyst: NFL Streaming Success
Twitter (TWTR - Get Report) ended last week a winner, finishing Friday up 4.5% thanks to the success of its first stream of NFL Thursday night football. Twitter has been touting live video streams as an important ad growth opportunity, and the overwhelmingly positive feedback from Thursday night's stream could pave the way for more of the same.
Long-term, it looks like Twitter is actually carving out a bottom from a technical standpoint. While this stock's price chart actually looked pretty rough from a technical standpoint just a couple of months ago, shares reversed higher in August, forming what looks like a wide inverse head and shoulders pattern. From here, a breakout above the pattern's neckline at $21 would signal a high-probability buying opportunity in Twitter.