Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generatinginvestment 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.
Hewlett-Packard
- Nearest Resistance: $78
- Nearest Support: $68
- Catalyst: Split-Up
Tech giant Hewlett-Packard (HPQ - Get Report) is seeing big volume today, following its official split into two separate companies. HP retains its printer and PC businesses, while Hewlett Packard Enterprise (HPE) sells servers, data storage solutions and other enterprise IT tools. The split-up has been long-awaited, and it's the lower-margin legacy business that's actually seeing the biggest upside from the announcement today. Shares of HP are up 13% as of this writing.
Technically speaking, HP looks "bottomy" here. Shares have been forming a pretty classic inverse head and shoulders setup, a bullish price pattern that signals a major change in trend for HP. The breakout comes on a move above $13.50, so if HP can hold its multi-month highs today, buyers have a green light to go buying shares.
Hewlett Packard Enterprise
- Nearest Resistance: $15.75
- Nearest Support: $14.00
- Catalyst: Split-Up
The other side of the HP trade is Hewlett Packard Enterprise, which is up about 2% on big volume in today's session.
HPE has actually been trading as a standalone "when issued" stock since Oct. 19, so shares have had a short while to establish some semblance of a technical trajectory. At this point, shares of HPE are establishing a floor around $14, butsupport levels have been easily violated in recent sessions. Buyers looking for a chance to get into HP Enterprise should wait for this stock to show a more meaningful floor before buying.
HPE has actually been trading as a standalone "when issued" stock since Oct. 19, so shares have had a short while to establish some semblance of a technical trajectory. At this point, shares of HPE are establishing a floor around $14, butsupport levels have been easily violated in recent sessions. Buyers looking for a chance to get into HP Enterprise should wait for this stock to show a more meaningful floor before buying.
Dyax
- Nearest Resistance: $37
- Nearest Support: $35
- Catalyst: Acquisition
Shares of biopharma stock Dyax (DYAX - Get Report) are seeing a big pop this afternoon, up more than 30% after the announcement that Dyax is being acquired by larger pharma firm Shire in a deal with at least $5.9 billion. Shire will pay $37.30 per share for Dyax, plus an extra $4 per share if the firm's DX-2930 compound receives approval for treating hereditary angioedema.
While shares of Dyax trade for a slight premium here, the easy money has already been made on this trade at this point. A lot of risk still exists in the deal getting done and the treatment getting approved.
While shares of Dyax trade for a slight premium here, the easy money has already been made on this trade at this point. A lot of risk still exists in the deal getting done and the treatment getting approved.
Facebook
- Nearest Resistance: $105
- Nearest Support: $97.50
- Catalyst: Technical Setup
Finally, tech giant Facebook (FB - Get Report) is seeing some big volume of its own this afternoon, with shares up slightly following Friday's broad market correction. Facebook continues to be a hot momentum name in 2015, with shares up more than 11% in the last four weeks alone.
Technically speaking, shares of Facebook are in breakout mode following a push through $97.50 resistance in October. And while shares have been correcting in the last couple of sessions, a retest of all-time highs looks likely from here.
Technically speaking, shares of Facebook are in breakout mode following a push through $97.50 resistance in October. And while shares have been correcting in the last couple of sessions, a retest of all-time highs looks likely from here.
If you decide to be a buyer up at these levels, just be sure to keep a tight protective stop in place.
By Jonas Elmerraji
By Jonas Elmerraji
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