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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ICF International
ICF International (ICFI) provides management, technology and policy professional services to government and commercial customers in the U.S. and internationally. This stock closed up 2.6% at $34.09 in Wednesday's trading session.
Wednesday's Volume: 196,000
Three-Month Average Volume: 73,142
Volume % Change: 171%
From a technical perspective, ICFI spiked higher here back above its 50-day moving average of $33.12 with above-average volume. This move also pushed shares of ICFI into breakout territory, since the stock took out some near-term overhead resistance at $33.76. Market players should now look for a continuation move to the upside in the short-term if ICFI manages to take out Wednesday's intraday high of $34.48 with high volume.
Traders should now look for long-biased trades in ICFI as long as it's trending above Wednesday's intraday low of $32.50 and then once it sustains a move or close above $34.48 with volume that's near or above 73,142 shares. If that move begins soon, then ICFI will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $35.88 to $36.50, or even $38 to $39.
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Pacific Ethanol
Pacific Ethanol (PEIX) produces and markets low-carbon renewable fuels in the U.S. This stock closed up 6.7% to $12.33 in Wednesday's trading session.
Wednesday's Volume: 2.51 million
Three-Month Average Volume: 1.60 million
Volume % Change: 65%
From a technical perspective, PEIX showed relative strength here compared with the overall market weakness as it ripped sharply higher right above some near-term support at $11 with above-average volume. This stock has experienced dramatic downside volatility over the last month and change, with shares collapsing from its high of $23.97 to its recent low of $9.10. During that downtrend, shares of PEIX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of PEIX have now started to rebound off that $9.10 low and it's now quickly moving within range of triggering a near-term breakout trade. That trade will hit if PEIX can manage to take out Wednesday's intraday high of $12.98 to some more resistance at $13.50 with high volume.
Traders should now look for long-biased trades in PEIX as long as it's trending above Wednesday's intraday low of $11.42 or above more support at $11 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.60 million shares. If that breakout develops soon, then PEIX will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $14.29 to $15.83, or even $16.
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Cubist Pharmaceuticals
Cubist Pharmaceuticals (CBST), a biopharmaceutical company, is engaged in the research, development and commercialization of pharmaceutical products for medical needs in the acute care environment in the U.S. This stock closed up 4.1% at $69.15 in Wednesday's trading session.
Wednesday's Volume: 1.27 million
Three-Month Average Volume: 733,591
Volume % Change: 96%
From a technical perspective, CBST ripped higher here right off its 50-day moving average of $66.11 and back above its 200-day moving average of $69.01 with above-average volume. This counter trend to the upside on Wednesday also briefly pushed shares of CBST into breakout territory, since the stock flirted with some near-term overhead resistance levels at $68.72 to $69.51. Shares of CBST tagged an intraday high of $69.84, before it closed just off the level at $69.15. Market players should now look for a continuation move higher in the near-term in CBST if it manages to clear Wednesday's intraday high of $69.84 with high volume.
Traders should now look for long-biased trades in CBST as long as it's trending above its 50-day at $66.11 and then once it sustains a move or close above $69.84 with volume that's near or above 733,591 shares. If that move gets started soon, then CBST will set up to re-test or possibly take out its next major overhead resistance levels at $71.70 to $74.18.
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Abaxis
Abaxis (ABAX) develops, manufactures, markets and sells portable blood analysis systems for use in human or veterinary patient care settings to provide blood constituent measurements for clinicians worldwide. This stock closed up 3.5% at $51.11 in Wednesday's trading session.
Wednesday's Volume: 451,000
Three-Month Average Volume: 201,897
Volume % Change: 145%
From a technical perspective, ABAX ripped higher here right off its 50-day moving average and counter-trended vs. the overall market weakness with above-average volume. This move briefly pushed shares of ABAX into breakout territory, since the stock flirted with some near-term overhead resistance at $52.30. Shares of ABAX tagged an intraday high of $52.50, before closing just below that level at $51.11. This jump to the upside on Wednesday is now starting to push shares of ABAX within range of triggering another big breakout trade. That trade will hit if ABAX manages to take out Wednesday's intraday high of $52.50 to its 52-week high of $53.98 with high volume.
Traders should now look for long-biased trades in ABAX as long as it's trending above its 50-day at $48.95 or above more near-term support at $46.87 and then once it sustains a move or close above those breakout levels with volume that hits near or above 201,897 shares. If that breakout gets set off soon, then ABAX will set up to enter new 52-week-high territory above $53.98, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65.
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Cedar Fair
Cedar Fair (FUN) owns and operates amusement and water parks in the U.S. and Canada. This stock closed up 3.7% to $46.95 in Wednesday's trading session.
Wednesday's Volume: 474,000
Three-Month Average Volume: 164,788
Volume % Change: 195%
From a technical perspective, FUN gapped up notably higher here right into its 50-day moving average of $47.27 with above-average volume. This spike to the upside on Wednesday is now starting to push shares of FUN within range of triggering a near-term breakout trade. That trade will hit if FUN manages to take out its 50-day moving average of $47.27 to some more key near-term overhead resistance levels at $48 to $48.32 with high volume.
Traders should now look for long-biased trades in FUN as long as it's trending above Wednesday's intraday low of $46.06 and then once it sustains a move or close above those breakout levels with volume that hits near or above 164,788 shares. If that breakout triggers soon, then FUN will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $49.54 to $51, or even $52.
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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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