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.
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With that in mind, let's take a look at several stocks rising on unusual volume recently.
GW Pharmaceuticals
GW Pharmaceuticals (GWPH), a biopharmaceutical company, together with its subsidiaries, is engaged in discovering, developing, and commercializing cannabinoid prescription medicines. This stock closed up 6.2% at $71.99 in Friday's trading session.
Friday's Volume: 2.54 million
Three-Month Average Volume: 875,411
Volume % Change: 169%
From a technical perspective, GWPH gapped sharply higher here with above-average volume. This move briefly pushed shares of GWPH into breakout territory, since this stock flirted with some near-term overhead resistance at $72.70. Shares of GWPH tagged an intraday high of $74.90, before closing well off that level at $71.99. Market players should now look for a continuation move higher in the short-term if GWPH manages to take out Friday's intraday high of $74.90 with strong upside volume.
Traders should now look for long-biased trades in GWPH as long as it's trending above Friday's low of $70.52 and then once it sustains a move or close above Friday's intraday high of $74.90 with volume that this near or above 875,411 shares. If that move gets underway soon, then GWPH will set up to re-test or possibly take out its next major overhead resistance level at $78.08. Any high-volume move above that level will then give GWPH a chance to make a run at its all-time high of $86.45.
Montage Technology Group
Montage Technology Group (MONT) designs, develops, and markets various analog and mixed-signal semiconductor solutions for the home entertainment and cloud computing markets. This stock closed up 4.5% at $20.32 in Friday's trading session.
Friday's Volume: 992,000
Three-Month Average Volume: 428,195
Volume % Change: 185%
From a technical perspective, MONT jumped higher here back above its 50-day moving average of $19.77 with above-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $17.01 to its intraday high of $20.59. During that uptrend, shares of MONT have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MONT within range of triggering a near-term breakout trade. That trade will hit if MONT manages to take out Friday's intraday high of $20.59 to some more key near-term resistance at $20.87 with high volume.
Traders should now look for long-biased trades in MONT as long as it's trending above $19 and then once it sustains a move or close above those breakout levels with volume that hits near or above 428,195 shares. If that breakout materializes soon, then MONT will set up to re-test or possibly take out its next major overhead resistance levels at $22.36 to $23.44. Any high-volume move above those levels will then give MONT a chance to make a run at its all-time high of $26.70.
Keurig Green Mountain
Keurig Green Mountain (GMCR) is engaged in the specialty coffee and coffeemaker businesses in the U.S. and Canada. This stock closed up 8.3% at $122.07 in Friday's trading session.
Friday's Volume: 5.66 million
Three-Month Average Volume: 3.03 million
Volume % Change: 128%
From a technical perspective, GMCR exploded higher here and broke out above some near-term overhead resistance at $117.44 with above-average volume. This breakout has now pushed shares of GMCR above the upper-end of its recent sideways trading chart pattern, which saw the stock move between $111.09 on the downside and $117.44 on the upside. Shares of GMCR are now quickly trending within range of triggering another big breakout trade. That trade will hit if GMCR manages to take out some key overhead resistance levels at $123.62 to its 52-week high of $124.14 with high volume.
Traders should now look for long-biased trades in GMCR as long as it's trending above $117.44 and then once it sustains a move or close above those breakout levels with volume that's near or above 3.03 million shares. If that breakout triggers soon, then GMCR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $135 to $140.
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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