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.
Fairchild Semiconductor
- Nearest Resistance: $20
- Nearest Support: 19.40
- Catalyst: Acquisition
Chipmaker Fairchild Semiconductor (FCS - Get Report) is up almost 10% this afternoon, boosted by news that ON Semiconductor (ON - Get Report) is offering $2.4 billion in cash to acquire Fairchild in a deal that values shares at $20. That announcement brings Fairchild's rally to more than 50% since the end of August -- and it's a number that could go higher if speculators are right about a rival bid for this legacy tech company.
That said, for traders who missed the move, the obvious money has already been made on Fairchild at this point. Traders should look elsewhere for a high-probability price setup.
That said, for traders who missed the move, the obvious money has already been made on Fairchild at this point. Traders should look elsewhere for a high-probability price setup.
ON Semiconductor
- Nearest Resistance: $12
- Nearest Support: $9.70
- Catalyst: FCS Acquisition
The other side of the Fairchild trade is ON Semiconductor (ON - Get Report) , a stock that's correcting by almost 10%on huge volume this afternoon after the Fairchild acquisition was reported.
While today's selling in ON Semi looks ugly at first blush, shares are actually holding onto the bottom of their uptrend this week, implying that the next bounce off of trend line support would make a great buying opportunity for traders willing to step in here. If buyers can prevent shares from ending the session materially below the bottom of that uptrend, the next up day is a tradable buy signal.
While today's selling in ON Semi looks ugly at first blush, shares are actually holding onto the bottom of their uptrend this week, implying that the next bounce off of trend line support would make a great buying opportunity for traders willing to step in here. If buyers can prevent shares from ending the session materially below the bottom of that uptrend, the next up day is a tradable buy signal.
Qualcomm
- Nearest Resistance: $52
- Nearest Support: N/A
- Catalyst: South Korean Antitrust Probe
Qualcomm (QCOM - Get Report) is selling off this afternoon, down more than 8% on big volume following news that South Korea's Fair Trade Commission has accused the company of violating antitrust regulations in the way it licenses its technology. The announcement comes just months after the firm paid a costly fine to Chinese regulators and cut its royalties on Chinese handsets for another antitrust probe in that country. Investors are worried that the South Korean charges will lead to similar value destruction for shareholders.
Shares broke through key support at $52 on today's report, a move that clears the way to further downside in Qualcomm in the near-term. Buyers should wait for shares to establish support before trying to find a buying opportunity.
Cisco Systems
Cisco Systems
- Nearest Resistance: $29.50
- Nearest Support: $26
- Catalyst: Technical Setup
Finally, a technical setup is driving a high-volume session in shares of tech firm Cisco Systems (CSCO - Get Report) this afternoon.
Cisco started off November correcting, gapping lower after fiscal first-quarter 2016 earnings were released last week. Shares managed to catch a bid at long-term $26 support, and that's clearing the way back for a re-test of an equally long-term resistance level up at $29.50.
Cisco has spent most of 2015 trading sideways in that price range. A breakout above $29.50 would be the signal that shares are ready to resume an uptrend in 2016.
By Jonas Elmerraji Cisco started off November correcting, gapping lower after fiscal first-quarter 2016 earnings were released last week. Shares managed to catch a bid at long-term $26 support, and that's clearing the way back for a re-test of an equally long-term resistance level up at $29.50.
Cisco has spent most of 2015 trading sideways in that price range. A breakout above $29.50 would be the signal that shares are ready to resume an uptrend in 2016.
Source: http://www.thestreet.com/story/13371308/1/4-stocks-trading-on-big-volume-and-what-to-do-with-them-now.html
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