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.
Super Micro Computer
Super Micro Computer (SMCI), together with its subsidiaries, develops and provides high-performance server solutions based on modular and open-standard architecture in the U.S. and internationally. This stock closed up 2.4% at $21.50 in Monday's trading session.
Monday's Volume: 707,000
Three-Month Average Volume: 287,411
Volume % Change: 140%
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From a technical perspective, SMCI trended higher here right above some near-term support at $20.40 with above-average volume. This stock recently gapped up sharply from $18 to $23.54 with monster upside volume. Following that move, shares of SMCI have sold off to its recent low of $20.40. Shares of SMCI are now starting to bounce off that low and move within range of triggering a big breakout trade. That trade will hit if SMCI manages to take out Monday's high of $21.94 to its 52-week high at $23.54 with high volume.
Traders should now look for long-biased trades in SMCI as long as it's trending above some key near-term support levels at $20.40 or at $20 and then once it sustains a move or close above those breakout levels with volume that's near or above 287,411 shares. If that breakout hits soon, then SMCI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $27 to $30.
Rubicon Technology
Rubicon Technology (RBCN), an electronic materials provider, develops, manufactures and sells monocrystalline sapphire and other crystalline products for light-emitting diodes, radio frequency integrated circuits, blue laser diodes, optoelectronics and other optical applications. This stock closed up 1.8% to $11.33 in Monday's trading session.
Monday's Volume: 727,000
Three-Month Average Volume: 484,039
Volume % Change: 95%
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From a technical perspective, RBCN spiked modestly higher here with above-average volume. This spike briefly pushed shares of RBCN into breakout territory, after the stock flirted with some key overhead resistance levels at $11.54 to $11.70. Shares of RBCN closed just below those levels at $11.33. Market players should now look for a continuation move higher in the short-term if RBCN can manage to take out Monday's high of $11.75 with strong volume.
Traders should now look for long-biased trades in RBCN as long as it's trending above $11 or above its 50-day at $10 and then once it sustains a move or close above Monday's high of $11.75 with volume that's near or above 484,039 shares. If we get that move soon, then RBCN will set up to re-test or possibly take out its next major overhead resistance levels at $13 to its 52-week high at $13.78. Any high-volume move above those levels will then give RBCN a chance to tag $14 to $15.
Qihoo 360 Technology
Qihoo 360 Technology (QIHU) provides Internet and mobile security products in the People's Republic of China. This stock closed up 6.2% to $89.99 in Monday's trading session.
Monday's Volume: 4.49 million
Three-Month Average Volume: 2.91 million
Volume % Change: 58%
From a technical perspective, QIHU spiked sharply higher here right off its 50-day moving average of $83.74 with above-average volume. This move is starting to push shares of QIHU within range of triggering a big breakout trade. That trade will hit if QIHU manages to take out Monday's high of $90.48 to just above $94 and then once it clears some more key overhead resistance levels at $96.25 to its all-time high at $96.74 with high volume.
Traders should now look for long-biased trades in QIHU as long as it's trending above its 50-day at $83.74 or above $82.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.91 million shares. If that breakout triggers soon, then QIHU will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $105 to $110, or even $115.
ICG Group
ICG Group (ICGE) is a private equity and venture capital firm specializing in growth capital, acquisitions and mid and late venture investments in public and private companies. This stock closed up 3.2% to $18.85 in Monday's trading session.
Monday's Volume: 449,000
Three-Month Average Volume: 202,306
Volume % Change: 150%
From a technical perspective, ICGE spiked notably higher here right above its 50-day moving average of $17.66 with above-average volume. This move pushed shares of ICGE into breakout and new 52-week-high territory, after the stock took out some near-term overhead resistance at $18.81. Market players should now look for a continuation move higher in the short-term if ICGE can manage to take out Monday's high of $18.99 with strong volume.
Traders should now look for long-biased trades in ICGE as long as it's trending above its 50-day moving average of $17.66 or above more near-term support at $17 and then once it sustains a move or close above $18.99 with volume that hits near or above 202,306 shares. If we get that move soon, then ICGE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $23 to $25.
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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