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.
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.
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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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Sprint
Nearest Resistance: $7.50
Nearest Support: $6
Catalyst: T-Mobile Talk Termination; New CEO
Shares of Sprint (S) are cratering this afternoon, down around 20% following news that the firm's talks to acquire T-Mobile (TMUS) have fallen through. According to Bloomberg, Sprint didn't think the acquisition was worth the regulatory barriers -- but investors clearly disagree with that conclusion based on today's selloff. Sprint is also getting extra attention this afternoon, following the announcement that Brightstar Corp founder Marcelo Claure will take over as CEO, replacing Dan Hesse, who has held the top spot since 2007.
From a technical standpoint, Sprint looked rough earlier in the week. Shares are just following through from a technical standpoint this afternoon, in large part thanks to the absence of buyers here.
While support is nearby at $6, it makes sense for buyers to stay away for the time being.
As of the most recently reported quarter, Spring was one of John Paulson's top holdings.
Groupon
Nearest Resistance: $7
Nearest Support: $5.75
Catalyst: Q2 Earnings
It looks like the big spikes in put volume on Groupon (GRPN) earlier this week are paying off following second-quarter earnings. Groupon reported earnings of 1 cent per share for the quarter, coming in line with analysts' expectations. But the 16% selloff today is coming thanks to a lower than expected forecast for the third quarter. GRPN only expects to earn 2 cents in profits next quarter, short of Wall Street's 3-cent average estimate.
The swat lower in shares today is rough, but the technicals are holding. A breakout above $7 is still the most important buy signal to watch for this summer. Until it happens, nothing has changed technically here.
Cognizant Technology Solutions
Nearest Resistance: $46.50
Nearest Support: $41
Catalyst: Q2 Earnings
IT outsourcer Cognizant Technology Solutions (CTSH) is down 12% on big volume this afternoon, following the firm's second quarter earnings call. While earnings beat expectations -- EPS came in at 66 cents, a 3-cent beat vs. estimates -- a cut to the firm's sales outlook for the third quarter is driving the selloff in this $26.6 billion technology name.
The technicals look rough in CTSH right now. Today's gap lower triggered the breakdown below key support at $46.50, a move that's signaling a long-term sell in CTSH. Support at $41 looks like the next stop for investors -- caveat emptor.
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-- Written by Jonas Elmerraji in Baltimore.
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At the time of publication, author had no positions in the names 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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