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.
Without further ado, here's a look at today's stocks.
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Tesla Motors
Nearest Resistance: $290
Nearest Support: $245
Catalyst: Analyst Note, Technical Setup
Tesla Motors (TSLA) has been the definition of a momentum stock in 2014, rallying close to 70% since the calendar flipped to January -- but Monday's 9% drop in shares made Tesla the poster-child for the tech stock momentum correction that started the week. Tesla's particularly bad selling was spurred by an analyst note from Morgan Stanley suggested that shares were overpriced near-term -- and the big drop comes despite an overall positive tone to the Tesla note.
But things could look a whole lot worse from a technical standpoint. Tesla has been bouncing its way higher in a textbook uptrending channel for more than a year now, and this week's drop puts shares back at the trend line support level that's been a buying opportunity all year long. Wait for a bounce before adding to a TSLA position here.
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Nearest Resistance: $84
Nearest Support: $72
Catalyst: Technical Setup
Facebook (FB) was another big technology name that corrected hard for technical reasons in Monday's session. Like many other tech names, Facebook has been bouncing its way higher in a well-defined uptrending channel since the start of the summer -- and Monday's pullback puts shares back within grabbing distance of trend line support for the fifth time in the channel.
The 50-day moving average has been a good proxy for support on the way up. If you decide to buy the bounce in FB here, I'd recommend putting a protective stop on the other side of that 50-day.
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RadioShack
Nearest Resistance: $1.10
Nearest Support: $0.90
Catalyst: Restructuring
RadioShack's (RSH) restructuring is keeping the micro-cap electronics retailer in the headlines, this time following a change-up in the C-suite. CFO John Feray resigned from RSH, bringing Holly Etlin back at interim CFO (she previously served as interim CFO during another round of management shakeups from last July through February). Now shares of RadioShack are consolidating sideways in a symmetrical triangle, bleeding off some of the extreme volatility that's been plaguing this stock since the calendar flipped to September.
That reduction in volatility likely won't last long. This setup is likely to end up with a volatility squeeze. But traders will need to be quick to take advantage of it.
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, portfolios managed by the author were long TSLA.
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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