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 and market data 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: $245
- Nearest Support: $235
- Catalyst: Q4 Earnings
First on our list of Wall Street's most active stocks is Goldman Sachs (GS) . Goldman is correcting slightly on big volume following the firm's fourth quarter earnings call. The firm earned an adjusted profit of $5.48 per share for the quarter, besting the $4.84 in earnings that analysts had been forecasting, on average. The better-than-expected results aren't translating into higher share prices, however. Goldman is down 0.23% on high volume as of this writing.
Technically speaking, not much has changed for Goldman's price trajectory at this point, but shares are in "make-or-break mode" this afternoon. Since the beginning of December, Goldman Sachs has been consolidating sideways in a tight price channel, but shares are testing support at $235 this afternoon. If shares violate that $235 price floor, consider it a sell signal.
- Nearest Resistance: $13
- Nearest Support: $12.25
- Catalyst: Dividend, December Sales
Ford (F) is another big stock that's mostly trading sideways on abnormal volume this afternoon. Ford's attention is coming from a pair of sources today: shares are going ex-dividend for their combined 20-cent cash dividend payout, and December's sales numbers signaled a rise in Europe. Ford's European sales rose 5% in 2016, with high growth numbers in the region across the board.
From a technical standpoint, now looks like a good time to be a Ford buyer. Shares have been bouncing their way higher in an uptrending channel, catching a bid at every successive test of trendline support since November. With that uptrend intact here, it makes sense to buy the next bounce higher in Ford.
- Nearest Resistance: $76
- Nearest Support: $66
- Catalyst: Forecast Cut
Big-box retailer Target (TGT) is dropping this afternoon, selling off more than 5% as of this writing following a cut to the firm's fourth quarter and full year guidance. Target now sees its fourth-quarter earnings range between $1.45 and $1.55 per share, versus the $1.55 to $1.75 range that the company had previously been touting -- analysts expected 4Q profits to hit $1.66 on average. That disappointment is sending shares of Target down to test long-term support at $66.
A $66 bounce in Target could be a buying opportunity for investors. Shares of this retailer have caught a bid at that price floor on the last four tests of that level, but it's important not to be early on the trade - don't buy Target until it can actually manage to effect a bounce higher off of that $66 price floor. The bounce acts as confirmation that buyers are still in place below that price line.
- Nearest Resistance: $46.50
- Nearest Support: $46.20
- Catalyst: Acquisition
Small-cap biopharmaceutical stock CoLucid Pharmaceuticals (CLCD) is up 32% this afternoon, boosted by news that Eli Lilly (LLY) is acquiring the firm for $46.50 a share in cash. The deal comes ahead of CoLucid's data from a second Phase 3 trial of its lasmiditan migraine treatment, expected later this year.
At this point, CoLucid trades for a nearly-nonexistent discount to the deal price - that means the money has already been made on the CLCD trade. Late-to-the-game traders should look elsewhere for upside opportunities in this market.
- Nearest Resistance: $8.50
- Nearest Support: N/A
- Catalyst: Analyst Downgrade
It's been a rough 2017 so far for shares of department store retailer J.C. Penney (JCP) . Penney violated its long-term uptrend at the start of January, and shares have been in freefall ever since. Today, this stock is shedding another nearly 1.5% of its market value following an analyst downgrade from Credit Suisse. The violation of support earlier this month means that JCP is a stock you don't want to own until it can establish some semblance of support again - for now, it's just not there.
- Nearest Resistance: $44
- Nearest Support: $29
- Catalyst: Revenue Warning
Gigamon (GIMO) is in selloff mode this afternoon, dropping nearly 30% on huge volume after management warned on revenues for the fourth quarter. The firm said that it expects sales in a range between $84.5 million and $85 million for the fourth quarter. Analysts were expecting revenues to hit $92.2 million, on average. Likewise, profit projections came in on the low-end of their estimated range.
Gigamon's selloff comes after shares broke their uptrend back in the first days of December. That trend reversal (and ensuing lack of demand for shares of GIMO) has a lot to do with this stock's ability to drop as far as it's dropping this afternoon. This is another stock to avoid until it can establish some semblance of support for 2017.
- Nearest Resistance: $13.50
- Nearest Support: $11
- Catalyst: Guidance Cut
Finally, uranium producer Cameco (CCJ) is down 13% this afternoon after management told analysts that 2016 results will be "significantly" below estimates. The surprise guidance cut comes ahead of fourth quarter earnings results in early February. Until then, investors are taking gains off the table following a solid rebound in Cameco from its November lows.
Technically, Cameco may be down this afternoon, but it's not out. Shares are holding onto trendline support this afternoon, a fact that could actually present a buying opportunity for Cameco if shares can bounce higher from here. Keep a close eye on how this stock behaves over the next few trading sessions.