How to Trade Lilly, Deere and Other Most-Active Stocks Wednesday

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.

Financial Select Sector SPDR ETF

  • Nearest Resistance: $22.50
  • Nearest Support: $19.50
  • Catalyst: Technical Setup

Leading off the list of the most active pre-Thanksgiving trades is the Financial Select Sector SPDR ETF (XLF) . This financial sector fund has been getting plenty of attention in recent weeks, as the financial sector took off following the results of the presidential election earlier this month. Now, XLF is tracking at the top of its price channel, riding trendline resistance for another straight trading session. Long-term, the uptrend is very much alive in XLF. That said, investors looking to build a position in this ETF should either wait for a pullback toward the bottom of the channel, or a breakout through the top of it, before clicking buy.

Eli Lilly 

  • Nearest Resistance: $22.50
  • Nearest Support: $19.50
  • Catalyst: Trial Failure

Shareholders of Eli Lilly (LLY) aren't feeling very thankful right now. This $72 billion pharma stock is off 12.8% this afternoon, following news that the firm's Alzheimer drug Solanezumab failed to meet its primary endpoint in the Expedition3 clinical trial. The phase 3 study failure is turning investors bearish on Lilly today.

Technically speaking, Lilly actually violated its uptrend back at the end of October. Today's big event-fueled gap down is just a continuation of that bearish shift. That said, with a series of support levels taken out with today's big move lower, it makes sense to avoid Eli Lilly until this pharma stock can establish some semblance of a price floor first.

VanEck Vectors Gold Miners ETF

  • Nearest Resistance: $24
  • Nearest Support: $20
  • Catalyst: Spot Gold Prices

The VanEck Vectors Gold Minters ETF (GDX) continues to be a popular way to play metals prices -- but it's not necessarily a bullish one this afternoon. GDX is down more than 5% today, knocked lower by a drop in spot gold prices. The downward direction doesn't come as much of a surprise though; GDX violated a strong 2016 uptrend back in August, and it's been selling off in a well-defined downtrend ever since. Today's big-volume selling doesn't change GDX's technical trajectory. Count on lower prices for GDX between now and the end of the year.

Deere

  • Nearest Resistance: $102.50
  • Nearest Support: $91
  • Catalyst: Q4 Earnings

Shares of agricultural equipment giant Deere  (DE) are rallying hard this afternoon, up almost 10% in today's trading session on the heels of strong fourth quarter earnings results. Deere posted an adjusted profit of 90 cents per share for the quarter, exceeding the 38.6-cent earnings that Wall Street was rooting for, on average. Even better, the firm guided its income for the year ahead to be above the range that analysts were expecting, a big factor in today's rally.

Deere has been in an uptrend for all of 2016. In fact, the rally in this stock accelerated in August, when third-quarter earnings beat estimates, sending shares 13.5% higher in a single day. Today's breakout looks strong from a technical standpoint, in large part because it also pushed Deere to a new all-time high. Expect more strength from this stock in the final stretch of 2016.

Juno Therapeutics

  • Nearest Resistance: $22.50
  • Nearest Support: N/A
  • Catalyst: Patient Deaths

Juno Therapeutics (JUNO) is selling off this afternoon, plunging 29% following news that it was halting a trial of its experimental cancer therapy following two patient deaths. The announcement is raising fresh concerns over the safety of Juno's JCAR015 cancer treatment. Juno's stock price is hitting new lifetime lows this afternoon as a result.

Technically, Juno's chart is waving a caution flag. Shares are violating a key support level at $22.50 today, opening up this stock to the potential for a lot more downside risk from here. Caveat emptor.

Twitter

  • Nearest Resistance: $23
  • Nearest Support: $17.50
  • Catalyst: Analyst Downgrade

Twitter (TWTR) is dropping 2.6% on big volume this afternoon, the selling spurred by a negative analyst note from research firm OTR Global. The note warned that video and NFL streaming haven't had the upward impact on advertisers' social media budgets that Twitter has been teasing. OTR Global cut its rating on Twitter to Negative in the note.

The good news for Twitter bulls is that shares are still looking attractive from a technical standpoint. Twitter has been trending higher since shares bottomed back in May. As long as support holds at $17.50, the next bounce higher could actually be a buying opportunity in shares of TWTR. Wait for the hangover from the downgrade to dissipate before trying to buy shares.

Urban Outfitters

  • Nearest Resistance: $50
  • Nearest Support: $33
  • Catalyst: Q3 Earnings

Last on our list of high volume trades today is $4 billion specialty retailer Urban Outfitters Inc. (URBN) . Shares are unloading this afternoon, down 9.4% on big volume following third-quarter earnings results. Urban Outfitters earned a third-quarter profit of 40 cents per share, missing the 44-cent average estimate from analysts. Likewise, net sales and comps both came in below estimates, scaring off investors who've been participating in URBN's upside move all year long.

This is another stock that's still holding up technically despite the drop in shares. The uptrend that's propelled Urban Outfitters 55% higher year to date is still intact here, with support down at $33. Wait for buyers to reassert themselves with a bounce higher off of support before you try buying shares.

At the time of publication, author had no positions in the stocks mentioned.

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