BALTIMORE (Stockpickr) -- 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. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.
These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity.
Without further ado, here's a look at today's stocks.
Nearest Resistance: N/A
Nearest Support: $34
Catalyst: Earnings Carryover
First up is Facebook (FB), a name that's one of the most active stocks for the second week in a row after posting strong earnings numbers on July 24. It's not so much that FB posted good earnings that's sent it soaring in the days since the release. Instead, shares broke out to new 52-week highs on the heels of the earnings numbers, and that left FB without any resistance from a technical standpoint.
Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. If you're looking for an entry, I'd suggest waiting -- momentum is showing signs of fatigue.
Chesapeake Energy
Nearest Resistance: $25
Nearest Support: $23.50
Catalyst: Earnings
The same exact thing is happening over at Chesapeake Energy (CHK) following the firm's second-quarter earnings numbers. Chesapeake earned 66 cents per share for the quarter, besting Wall Street's meager 41-cent expectations by a big margin. Shares are up more that 6% in today's session as a result.
CHK looks strong from a technical standpoint too. While $25 looks like intraday resistance for CHK right now, it's not a particularly strong price ceiling. For investors who aren't risk-averse, I'd suggest putting on a position in today's session -- just keep a tight stop in place.
Rite Aid
Nearest Resistance: $3.20
Nearest Support: $2.70
Catalyst: July Sales Release
Retail pharmacy chain Rite Aid (RAD) is getting some attention this afternoon, after the firm released its July sales report to Wall Street. Same-store-sales increased 1.3% in the last month, a strong boost for a firm that's already seen its fair share of fundamental strength in 2013. Today's 5% increase in shares could just be the first step.
That's because RAD is currently forming a bullish ascending triangle pattern. The setup is formed by horizontal resistance at $3.20 and uptrending support to the downside of shares. I'd recommend becoming a buyer if RAD is able to print above $3.20 -- then it makes sense to keep a protective stop at the 50-day moving average.
Trulia
Nearest Resistance: N/A
Nearest Support: $38
Catalyst: Q2 Earnings
Last, but certainly not least, is Trulia (TRLA), the $1.5 billion real estate search engine company that went public in September. Shares may not have had a very long public history, but it's been an impressive one: TRLA has doubled since its first trade. Today, the stock is up more than 22% after posting impressive second quarter results.
New highs may be anxiety-inducing for investors who've missed out on a big move up, but they're a lot less anxiety-inducing for current shareholders. That's a big reason why uptrends historically continue moving up -- and why now looks like as good a time as any for investors who aren't risk-averse to think about picking up shares of TRLA. It's got upside potential in August for the same psychological reasons as Facebook.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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