Stocks on the Move Right Now

"If I have seen further than others, it is by standing on the shoulders of giants."
-- Sir Isaac Newton

There's a reason that more than 30,000 investors flock to Omaha, Neb., every May, and why millions more rummage through the Berkshire Hathaway annual reports: Gleaning knowledge from proven investors is one way to find the stocks that will make you rich.

Using Motley Fool CAPS, the Fool's 115,000-plus-member investing community, we can see which stocks received a boost in attention from proven investors in the past month.

In addition to a stock's CAPS star rating, a sudden increase in bullish interest from CAPS members ranked in the top 20% of the community -- we call them CAPS All-Stars -- is a very good sign, one you should take note of. One striking example is genetic-research equipment maker Sequenom, which is up 108% since its bullish interest doubled the first week of June.

Conversely, a sudden increase in bearish interest from CAPS All-Stars might be an early signal that the stock's one to avoid.

A bullish stampede
To illustrate, here are five stocks receiving more support from CAPS All-Stars over the past four weeks:

Data from Motley Fool CAPS as of Sept. 29, 2008.

What I take from this data is that despite the recent Wall Street turmoil, CAPS All-Star members think certain financials, such as BB&T and JPMorgan Chase, show stronger prospects than some might think. Additionally, discount retailers such as Wal-Mart and dividend-paying utilities such as Southern are attracting investors seeking some shelter in a bear market. And surprisingly, CAPS All-Stars appear to be making bold bets against oil companies.

Given that some are currently well off their 52-week highs, and given the increase in All-Star approval, there are some great opportunities for further research -- particularly Southern, which is also a five-star stock. That matters, because our proprietary data has shown that, as a group, four- and five-star CAPS stocks have significantly outperformed the S&P 500.

When bears attack
Now that we've seen which stocks CAPS All-Stars think are poised to rebound, here are five stocks being bombarded by "underperform" ratings over the past month:

Data from Motley Fool CAPS as of Sept. 29, 2008.

Even though these companies aren't entirely disdained in the CAPS community, the bears have nevertheless begun to creep in. The CAPS All-Stars' concerns are logical -- a prolonged credit crisis could lower the credit limits available to consumers, which could reduce the number of transactions Visa processes. A pinched consumer would be bad for Disney, and a slower business environment could hurt Google's ad sales.

And although none of these shares is a blatant time bomb -- most still enjoy strong All-Star bullish support, despite the past month's events -- the large increase in All-Star bears over the past month could signal turbulence ahead.

What to do next
Knowing when stocks are poised to change direction takes a keen sense of changing conditions and thorough fundamental analysis. Missing either of these key ingredients could end up being a very bad investment, particularly if you short the stock.

At our new Motley Fool Pro service, we'll be standing on the shoulders of proven investors by using similar proprietary data points in addition to our own thorough fundamental analysis to identify opportunities to use stocks, ETFs, and options to go both long and short. Our ultimate goal is to help subscribers make money regardless of whether the market is up, down, or flat. If you'd like to learn more about Motley Fool Pro, simply enter your email address in the box below.