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.
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.
Yum! Brands
- Nearest Resistance: $81
- Nearest Support: $76
- Catalyst: China Assets
Fast food chain Yum! Brands (YUM - Get Report) is seeing bigger volume this afternoon, following yesterday's reports that private equity firm KKR and sovereign fund China Investment are potentially interested in buying the firm's substantial business interests in China. Yum! agreed last fall to look into selling off its China business, and the firm has been talking with suitors in 2016.Technically, Yum! Brands' chart looks strong here. Shares are hovering near a multi-month high this week, and any potential progress on the China asset sale is likely to spur upside in shares. This looks like a good time to build a starter-position in Yum!; just be sure to park a protective stop nearby.
Exelon
- Nearest Resistance: $35.50
- Nearest Support: $34
- Catalyst: Pepco Deal
Exelon (EXC - Get Report) is seeing big volume this afternoon, following yesterday's approval of its takeover of utility Pepco Holdings by Washington, D.C.'s public service commission. That regulatory thumbs-up was all Exelon needed to officially close its acquisition of Pepco, a buyout that's been mired in regulatory risk as Wall Street priced in a high likelihood of rejection by the government. Exelon completed its deal immediately after the D.C. PSC's decision, creating the biggest utility in the country.
Technically, Exelon is grinding sideways following its merger deal. Shares are sitting about a dollar shy of their 52-week highs as I write. A breakout to new highs would mark a buy signal for Exelon.
Accenture
- Nearest Resistance: N/A
- Nearest Support: $109
- Catalyst: Q2 Earnings
$73 billion consulting company Accenture (ACN - Get Report) is breaking out this afternoon, up almost 4% as of this writing, on the heels of second-quarter earnings results. Accenture reported second-quarter profits of $1.34 per share, besting Wall Street's average best guess of $1.18. Likewise, the firm also reported a 2016 earnings forecast that fell on the high end of analysts' expected range. The end result is a breakout to new highs.
TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, called Accenture "the real deal" during CNBC's"Mad Dash" segment and said the stock should do well over time.
Until this morning, $109 had been acting like a very long-term resistance level for Accenture; today's gap higher means that $109 price level is now acting like support, propping Accenture's stock price up. Now looks like a good time to be a buyer, as Accenture sets a new high-water mark in March.
By Jonas Elmerraji
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