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.
Hewlett-Packard
Nearest Resistance: $33.60
Nearest Support: $31.50
Catalyst: Earnings
First up is technology giant Hewlett-Packard (HPQ). Shares of the $64 billion stock are up more than 6% as I write this afternoon, buoyed by second-quarter earnings numbers that came in line with analyst expectations. H-P earned 88 cents per share last quarter, the same number that Wall Street was hoping for. The firm's cost-cutting measures are drawing buyers this afternoon, following news that the firm plans to lay off as many as 16,000 additional employees, trimming a cost structure that investors have been criticizing of late.
From a technical standpoint, H-P is still consolidating sideways in a price channel. But it's attempting to break out above an important resistance level at $33.60 in today's session. If shares can close above that high water mark, expect and extended rally from this tech name this summer.
Aeropostale
Nearest Resistance: $4
Nearest Support: N/A
Catalyst: Earnings
Teen apparel retailer Aeropostale (ARO) is getting shellacked this afternoon, dragged more than 21% lower in today's session following the firm's first quarter earnings numbers. The firm announced that sales dropped more than 12% for the quarter, as the firm's clothes failed to resonate with fickle teen shoppers. Worse, the firm announced that it expects a bigger loss than previously expected for next quarter.
Technically speaking, this chart is broken. While ARO has been in a downtrend for the better part of the last year, today's double-digit breakdown is pushing shares below the bottom of the downtrending channel that's constrained price action to date. That means that an acceleration in the selloff looks likely. Avoid being a buyer in ARO here.
Aruba Networks
Nearest Resistance: $19
Nearest Support: $16
Catalyst: Earnings
Fiscal third-quarter earnings are to blame for selling in Aruba Networks (ARUN) today: Shares are off more than 15% this afternoon thanks primarily to guidance numbers that missed the mark. While the firm's loss for the quarter narrowed to 18 cents per share, Q4 estimates fell short. That guidance miss is driving selling pressure in the wireless equipment maker today – and the technicals look rough going forward.
ARUN broke down below its trend line support level with today's selling. Support at $16 looks like the next-closest reprieve for shareholders. If you're looking for an opportunity to buy this stock, wait for support to get established at $16 before jumping in.
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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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