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.
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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.
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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. And when there's a big catalyst, there's often a trading opportunity.
Without further ado, here's a look at today's stocks.
Yahoo!
Nearest Resistance: $36
Nearest Support: $32
Catalyst: TV Show Development
News that Yahoo! (YHOO) plans on commissioning four new online TV shows isn't enough to spare the firm from selling off more than 2.4% this afternoon, the result of a shift in leadership from tech-heavy momentum names to more conventional blue chips. So while the TV development news is driving volume in YHOO today, it's not helping to create upside in this stock.
Yahoo! broke its uptrend back in mid-March, ending a long-term push higher. That doesn't mean that Yahoo! is moving down forever, of course, but it does mean that more downside is the high-probability trade from here.
MannKind
Nearest Resistance: $6.75
Nearest Support: $5.50
Catalyst: FDA Extended Review
Biopharmaceutical firm MannKind (MNKD) can't seem to stay out of the news -- and that's not a good thing for shareholders this time around. MNKD is down more than 10% this afternoon, following news that the FDA was extending its review of the firm's insulin inhaler by three months. That added scrutiny on the firm's product was enough to break shares back below the key support level at $6.75 that they cleared just last week.
Now shares are stuck in a range between that newfound resistance level at $6.75 and support down at $5.50. But frankly, the event risk is just too high in this name to justify taking a trade. The next round of news could break shares through support or resistance without too much trouble. The sidelines are the safest spot to be in MNKD right now.
Mallinckrodt
Nearest Resistance: $67.50
Nearest Support: $55
Catalyst: QCOR Acquisition
Shares of $3.3 billion pharmaceutical maker Mallinckrodt (MNK) are getting hammered lower this afternoon, following news that the firm was acquiring Questcor Pharmaceuticals (QCOR) for $5.6 billion. As I write, MNK is down 8%. It's easy to look at the price action today and say that it's an investor vote against the deal, but in reality, the deck was already stacked against MNK thanks to a major trend line break in this stock.
Mallinckrodt broke trend line support back in late March, falling below the price floor that had been in effect since back in November. There's a lot more downside risk than upside potential in shares of MNK right now -- and that's reason enough to avoid being a buyer until this name can manage to catch a bid again.
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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At the time of publication, author had no positions in stocks mentioned.
Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to
TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.Follow Jonas on Twitter @JonasElmerraji
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