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.
Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."
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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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Iron Mountain
Iron Mountain (IRM), together with its subsidiaries, provides storage and information management services primarily in North America, Europe, Latin America and the Asia Pacific. This stock closed up 6.2% to $33.90 in Monday's trading session.
Monday's Volume: 9.29 million
Three-Month Average Volume: 1.70 million
Volume % Change: 447%
From a technical perspective, IRM ripped sharply here right above its 50-day moving average of $31.09 with monster upside volume flows. This strong spike to the upside on Monday also pushed shares of IRM into breakoutterritory, since the stock took out some near-term overhead resistance levels at $32.44 to $32.84. Market players should now look for a continuation move to the upside in the short-term if IRM manages to take out Monday's intraday high and its new 52-week high of $34.31 with high volume.
Traders should now look for long-biased trades in IRM as long as it's trending above its 50-day moving average at $31.09 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.70 million shares. If that move starts soon, then IRM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $42.
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Clovis Oncology
Clovis Oncology (CLVS), a biopharmaceutical company, focuses on acquiring, developing and commercializing anti-cancer agents in the U.S., Europe and internationally. This stock closed up 13.1% at $48.08 in Monday's trading session.
Monday's Volume: 2.35 million
Three-Month Average Volume: 713,516
Volume % Change: 229%
From a technical perspective, CLVS gapped sharply higher here back above its 50-day moving average of $42.38 with strong upside volume flows. This large spike to the upside on Monday also pushed shares of CLVS into breakout territory, since the stock took out some near-term overhead resistance at $46.48. Shares of CLVS are now quickly moving within range of triggering another big breakout trade. That trade will hit if CLVS manages to clear Monday's intraday high of $49.30 to some more key overhead resistance at $50.87 with high volume.
Traders should now look for long-biased trades in CLVS as long as it's trending above $46.48 or above $45 and then once it sustains a move or close above those breakout levels with volume that hits near or above 713,516 shares. If that breakout hits soon, then CLVS will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $55.41 to $59.09.
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Conns
Conns (CONN) operates as a specialty retailer of durable consumer goods and related services in Texas, Arizona, Louisiana, Oklahoma and New Mexico, the U.S. This stock closed up 6.4% to $30.70 in Monday's trading session.
Monday's Volume: 4.96 million
Three-Month Average Volume: 1.24 million
Volume % Change: 253%
From a technical perspective, CONN ripped sharply higher here right above some near-term support at $28 with strong upside volume flows. This stock recently gapped down sharply from over $44 to under $32 with heavy downside volume. Following that move, shares of CONN went on to trend lower and print a new 52-week low at $26.60. Shares of CONN have now started to bounce off that 52-week low and it's starting to trend within range of triggering a major breakout trade. That trade will hit if CONN manages to take out some key near-term overhead resistance levels at $31.44 to its gap-down-day high of $33.65 with high volume.
Traders should now look for long-biased trades in CONN as long as it's trending above Monday's intraday low of $28.43 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.24 million shares. If that breakout triggers soon, then CONN will set up to re-fill some of its previous gap-down-day zone that started just above $44.
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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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