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 supply and demand, so it can be valuable to see which 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.
So, today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market.
Brocade Communications Systems
- Nearest Resistance: $12.75
- Nearest Support: $12.23
- Catalyst: Acquisition
Leading off our list of today's most active stocks is mid-cap communications infrastructure technology stock Brocade Communications Systems (BRCD) . Brocade is up more than 10% this afternoon, following confirmation that the firm is being bought out by Broadcom (AVGO) in a deal that will pay Brocade shareholders $12.75 per share in cash.
Shares are up more than 40% since the first reports of the deal became public Monday.
From the technical standpoint, the money has already been made on the Brocade trade. Shares of Brocade are currently within 3% of their acquisition price, signaling that Wall Street sees a high likelihood of the deal getting closed.
Investors should look elsewhere for upside opportunities this month.