DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.
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Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."
Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
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Radius Health
Radius Health (RDUS), a biopharmaceutical company, focuses on developing novel therapeutics for patients with osteoporosis and other serious endocrine-mediated diseases in the U.S. This stock closed up 13.8% at $23.31 in Wednesday's trading session.
Wednesday's Volume: 143,000
Three-Month Average Volume: 95,006
Volume % Change: 75%
From a technical perspective, RDUS exploded higher here right above some near-term support at $18.25 with above-average volume. This stock has been uptrending extremely strong for the last two months and change, with shares ripping higher from its low of $8.08 to its recent high of $24.28. During that uptrend, shares of RDUS have been making mostly higher lows and higher highs, which is bullish technical price action. This monster spike to the upside on Wednesday is now quickly pushing shares of RDUS within range of triggering a big breakout trade. That trade will hit if RDUS manages to take out Wednesday's intraday high of $23.75 to its all-time high of $24.28 with high volume.
Traders should now look for long-biased trades in RDUS as long as it's trending above $22 or $21 and then once it sustains a move or close above those breakout levels with volume that hits near or above 95,006 shares. If that breakout develops soon, then RDUS will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $35.
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Arista Networks
Arista Networks (ANET) provides cloud networking solutions for datacenter and cloud computing environments. This stock closed up 6.8% at $88.44 in Wednesday's trading session.
Wednesday's Volume: 592,000
Three-Month Average Volume: 355,689
Volume % Change: 60%
From a technical perspective, ANET ripped higher here right above some near-term support at $82.21 with above-average volume. This sharp spike higher on Wednesday also pushed shares of ANET into breakout territory, since the stock took out some near-term overhead resistance at $87.11. Market players should now look for a continuation move to the upside in the short-term if ANET manages to clear Wednesday's intraday high of $88.92 with high volume.
Traders should now look for long-biased trades in ANET as long as it's trending above $85 or above Wednesday's intraday low of $83.04 and then once it sustains a move or close above $88.92 with volume that's near or above 355,689 shares. If that move develops soon, then ANET will set up to re-test or possibly take out its next major overhead resistance level at its all-time high of $94.84. Any high-volume move above that level will then give ANET a chance to make a run at $100.
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Blackhawk Network
Blackhawk Network (HAWK) provides various prepaid products and payment services. This stock closed up 11.9% at $35.36 in Wednesday's trading session.
Wednesday's Volume: 2.21 million
Three-Month Average Volume: 280,869
Volume % Change: 721%
From a technical perspective, HAWK gapped up sharply higher here with monster upside volume flows. This explosive move to the upside on Wednesday also pushed shares of HAWK into breakout and new all-time high territory, since the stock took out some key near-term overhead resistance at $32.95. Market players should now look for a continuation move to the upside in the short-term if HAWK manages to clear its new all-time high of $35.50 with high volume.
Traders should now look for long-biased trades in HAWK as long as it's trending above Wednesday's intraday low of $32.87 and then once it sustains a move or close above its all-time high of $35.50 with volume that's near or above 280,869 shares. If that move gets underway soon, then HAWK will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45.
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To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including
CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.
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