So the election is over and Donald Trump is the president-elect. Time to put down the 10-K filings and the stock screeners and 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...
Bank of America
- Nearest Resistance: $18
- Nearest Support: $16.50
- Catalyst: Trump Win
Bank of America (BAC) is topping the list of the market's most-active stocks once again today, boosted more than 4% on huge volume this afternoon thanks to speculation that Donald Trump's presidential win could come with looser regulations on banks and more pressure on Janet Yellen and the Federal Reserve to increase interest rates at a faster pace. Bank of America is leading the rest of the financial sector higher this afternoon.
The outperformance from Bank of America isn't totally surprising given this stock's technical trajectory coming into today's financial sector rally. BofA has been in a well-defined uptrend since July, and shares are testing new 52-week highs at $18 this afternoon. From a relative strength standpoint, Bank of America continues to look like a stock that investors should want to own in the months ahead.
SPDR S&P 500 ETF
- Nearest Resistance: $218
- Nearest Support: $208
- Catalyst: Election Results
Another big move that's unsurprising this afternoon is the heavy trading volume in the SPDR S&P 500 ETF (SPY) , investors' most accessibly proxy for "the stock market" as a group. S&P futures plummeted last night as election results surprised market participants, but they've completely reversed course today, the S&P up nearly 1% as of this writing.
Technically speaking, SPY is catching a bid at a newfound support level that got sniffed out a few trading sessions ago. The surprise upside we're seeing in equities this afternoon could spell a move toward new highs for SPY - investors looking to build a position in this popular ETF should consider parking a protective stop just below support at $208.
- Nearest Resistance: $34
- Nearest Support: $31.50
- Catalyst: Clinton Loss
The healthcare sector is another broad group that's climbing higher following the election results -- and the pack is being led by pharma giant Pfizer (PFE) . Pfizer is up more than 8% this afternoon, exploding higher on big volume. But the move has more to do with Hillary Clinton losing the election than Donald Trump winning, specifically. The upset in the market's election expectations means that Clinton's table-pounding on the issue of drug pricing is less likely to result in restrictions for drug makes like Pfizer.
From a technical standpoint, today's big rally in Pfizer is material. Shares are breaking out of a downtrend that's harangued shares since the middle of the summer, signaling a potential sustained reversal higher from here. Buyers should hold off until Pfizer can establish a series of higher lows before jumping into this trade.
- Nearest Resistance: $8
- Nearest Support: $6
- Catalyst: Trump FCC Speculation
Sprint (S) is another stock that's popping on huge volume following speculation over what a Trump presidency might mean for it. With Trump likely to appoint the next FCC chairman, a Republican majority among the agency's commissioners could be more tolerant of wireless industry consolidation, putting a possible deal with T-Mobile US (TMUS) back on the table down the road for Sprint.
Long term, the trend in Sprint's shares is pretty hard to miss. This stock has been bouncing its way higher in a well-defined uptrend for all of 2016. And now, as shares bounce off of trendline support again this week, we're seeing a buying opportunity off of Sprint's 12% rally today. Investors who jump in here should consider a protective stop on the other side of $6 support.
VanEck Vectors Gold Miners ETF
- Nearest Resistance: $25
- Nearest Support: $21
- Catalyst: Spot Gold
Higher gold prices aren't coming as a surprise to market participants today - a gold rally has been a highly anticipated outcome of a Trump presidential win, as the precious metal has become market participants' favorite uncertainty trade this fall. The VanEck Vectors Gold Miners ETF (GDX) continues to be one of the most popular ways to play the moves in spot gold.
But while GDX is up 4.5% this afternoon, it's premature to get bullish on it. That's because GDX broke its uptrend back in August, and shares have been tracking lower in a well-defined downtrend ever since. While today's pop higher brings GDX up to test resistance at $25, it's still far too early to call the downtrend in this ETF over. Buyers beware.
- Nearest Resistance: $14
- Nearest Support: $9
- Catalyst: Trump Win
Materials stocks are some of today's biggest post-election winners, as market participants see higher infrastructure spending as part of a Trump administration. That's turning into a big-volume 8% rally today in shares of natural resource stock Freeport-McMoRan (FCX) .
Freeport is finally breaking free of a prolonged downtrend that's held shares lower since this stock peaked back in late April. That breakout looks like a buying opportunity for traders, as Freeport makes a run for its prior highs just above $14.
- Nearest Resistance: $140
- Nearest Support: $121
- Catalyst: Technical Setup
Finally, social media giant Facebook (FB) , a holding in Jim Cramer's Action Alerts PLUS portfolio, is seeing an active trading session this afternoon, tipping the scales as one of the most actively-traded issues on the Nasdaq thanks to a technical setup that's been brewing in shares.
Facebook has spent effectively all of 2016 in a well-defined uptrend, bouncing higher on every test of trendline support so far this year. Now, with shares touching that support level once again, the next leg up looks like a tradable buy signal in Facebook. For traders who opt to build a position here, it makes sense to park a protective stop on the other side of the 200-day moving average.