How to Trade This Week's Most Active Stocks -- Fitbit, Bank of America, Qorvo and More

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.

So, 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: $218
  • Nearest Support: $208
  • Catalyst: Technical Setup

The big SPDR S&P 500 ETF (SPY) , the best investing proxy for "the market," is leading off our list of most active stocks. SPY has been a popular trading vehicle lately, albeit not for the right reasons.

Following the first eight-day losing streak since 2008, market participants have been selling SPY as a way to cut their exposure to equities. Technically speaking, the recent selloff in the S&P coincides with a violation of the index's main trendline for 2016. At this point, it's unclear where the next important support level comes into play, although it's plausible that we see buyers step in here (see that dashed line on the chart above).

It's a good idea to wait for confirmation of an up-move in SPY before increasing your exposure to stocks this fall.

Bank of America

  • Nearest Resistance: $17
  • Nearest Support: $15
  • Catalyst: Technical Setup

Bank of America (BAC) saw big volume on Friday, fueled by another technical setup. BofA is basically flat, but shares are touching the bottom of their recent uptrend, signaling the potential for a bounce higher from here. Bank of America has been looking bullish since shares broke out above prior resistance at $15 back in August.

Following a throwback to confirm newfound support at that $15 level at the start of October, Bank of America has been materially outperforming the rest of the market ever since. A bounce here off of BofA's new uptrend would be a low-risk buying opportunity for traders who want to jump on this trend.


  • Nearest Resistance: $12
  • Nearest Support: $8.50
  • Catalyst: Post-Earnings Bounce

Shares of $2 billion wearable fitness device stock Fitbit  (FIT) caught a bid on Friday, rebounding following a brutal selloff in Thursday's session. Fitbit plunged almost 34% following third-quarter earnings results this past week, dogged by guidance that pointed to a weak fourth quarter. The big gap-down got followed up on Friday by a 2.5% rebound.

From a technical standpoint, you don't want to buy Fitbit here. The violation of a critical support level at $12 leaves this stock without a meaningful price floor, opening up the potential for more downside risk in the longer-term. Wait for Fitbit to establish a track record of higher lows before you jump into this stock.


  • Nearest Resistance: $17
  • Nearest Support: $11
  • Catalyst: Q3 Earnings

Cyber security stock FireEye (FEYE) rallied hard on Friday, rocketing more than 12% higher during the trading session thanks to strong third quarter earnings results. Excluding one-time charges, FireEye lost 18 cents per share for the quarter, a number that was far less bad than the 31-cent loss that Wall Street analysts were expecting, on average. Likewise, the firm boosted guidance for the coming quarter, indicating to investors that FireEye's performance rout could be ending.

Still, FireEye's downtrend isn't ending. This stock has been pointed lower all year long, and while Friday's pop looks promising, it's still a drop in the bucket compared to the decline in the last handful of sessions. Shares are still down nearly 40% year-to-date, and FireEye remains a stock you don't want to own until it can break out above its downtrend. That's something that doesn't happen until shares can catch a bid above resistance all the way up at $17.


  • Nearest Resistance: $52.50
  • Nearest Support: $45
  • Catalyst: Q2 Earnings

Qorvo  (QRVO) ended the week on a sour note, shedding 10% of its market value on Friday thanks to second-quarter earnings numbers that missed the mark. While Qorvo earned an adjusted profit of $1.29 per share, analysts were expecting closer to $1.41, on average. That earnings miss got followed up by a nearly 8% miss on guidance for the third quarter, a factor that contributed to the gap-down in shares.

Qorvo's technical setup has looked shaky for the last several months as shares formed a descending triangle near the top of their range. Friday's breakdown through $52.50 support triggered the sell signal from the pattern, an indication that the downside risk may not be over yet. From here, prior support at $45 looks like the next meaningful support level on the way down.

Activision Blizzard

  • Nearest Resistance: $44
  • Nearest Support: $39
  • Catalyst: Q3 Earnings

Third-quarter earnings were the big driver behind the high-volume correction in Activision Blizzard (ATVI) on Friday, spurring a 3.9% decline in shares. Earnings were actually better than expected, but guidance missed the mark at Activision -- the firm expects to post a profit of 74 cents a share in the fourth quarter, a nickel shy of the average projection from Wall Street.

The move lower is actually a followup from a violation of Activision's trendline. After pulling back to confirm newfound resistance at that uptrend line, Activision reacted with the bounce lower on Friday. It makes sense to avoid buying Activision Blizzard until shares can right themselves and establish a series of higher lows again. Meanwhile, the uptrend that's been in force for most of 2016 is broken at this point.


  • Nearest Resistance: $25
  • Nearest Support: $20
  • Catalyst: Q2 Earnings

Last up, Symantec (SYMC) saw a correction to end the week, dropping approximately 7% during the trading session thanks to second-quarter earnings results. Profits for the quarter came in better than expected, with adjusted earnings of 23 cents per share versus the 20-cent profit that analysts were counting on. Still, the drop signals that the results weren't enough to impress market participants.

More importantly, Friday's drop broke Symantec below the parabolic uptrend that had pulled shares of the security software maker more than 13% higher in 2016. From here, it's unclear where Symantec will find its next price floor, but prior support at $20 looks like a conservative bet. Investors should wait for Symantec to resolve its direction in the week ahead before trying to trade this stock.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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