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.
>>5 Stocks Under $10 Set to Soar
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.
>>5 Rocket Stocks to Buy for a Santa Claus Rally
With that in mind, let's take a look at several stocks rising on unusual volume recently.
Madison Square Garden
Madison Square Garden (MSG) operates in the sports, entertainment and media businesses primarily in the U.S. This stock closed up 1.3% at $56.70 in Thursday's trading session.
Thursday's Volume: 582,000
Three-Month Average Volume: 412,491
Volume % Change: 50%
From a technical perspective, MSG spiked modestly higher here right off some near-term support at $56 with above-average volume. This move is quickly pushing shares of MSG within range of triggering a near-term breakout trade. That trade will hit if MSG manages to take out its 50-day moving average of $56.92 and its 200-day moving average of $58.15 and then once it clears more key overhead resistance at $58.50 with high volume.
Traders should now look for long-biased trades in MSG as long as it's trending above Monday's low of $56 or above $55.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 412,491 shares. If that breakout hits soon, then MSG will set up to re-test or possibly take out its next major overhead resistance levels at $61.50 to its 52-week high at $63.44.
Mattress Firm
Mattress Firm (MFRM) is a specialty retailer of mattresses and related products and accessories in the U.S. This stock closed up 5.8% at $44.50 in Thursday's trading session.
Thursday's Volume: 271,000
Three-Month Average Volume: 227,033
Volume % Change: 50%
From a technical perspective, MFRM trended sharply higher here right above some near-term support at $41 with above-average volume. This stock has been uptrending strong for the last two months, with shares soaring higher from its low near $29 to its intraday high of $44.62. During that uptrend, shares of MFRM have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MFRM within range of triggering a big breakout trade. That trade will hit if MFRM manages to take out its 52-week high at $46.85 to its all-time high at $48.18 with high volume.
Traders should now look for long-biased trades in MFRM as long as it's trending above Thursday's low of $41.86 or above $40, and then once it sustains a move or close above those breakout levels with volume that hits near or above 227,033 shares. If that breakout triggers soon, then MFRM will set up to enter new 52-week- and all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60.
Bitauto
Bitauto (BITA) is a provider of Internet content and marketing services for China's automotive industry. This stock closed up 7.7% to $31.27 in Thursday's trading session.
Thursday's Volume: 2.20 million
Three-Month Average Volume: 1.16 million
Volume % Change: 126%
From a technical perspective, BITA spiked sharply higher here right above its 50-day moving average of $27.99 with strong upside volume. This move pushed shares of BITA into breakout territory, since the stock took out some near-term overhead resistance at $30.11. Shares of BITA are now quickly moving within range of triggering another near-term breakout trade. That trade will hit if BITA manage to clear Thursday's high of $31.89 to some more near-term overhead resistance at $32.90 with high volume.
Traders should now look for long-biased trades in BITA as long as it's trending above Monday's low of $29.22 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.16 million shares. If that breakout hits soon, then BITA will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $35.04. Any high-volume move above that level will then give BITA a chance to tag $40.
China Mobile Games and Entertainment Group
China Mobile Games and Entertainment Group (CMGE) is a mobile gaming company with a diversified portfolio of games for feature phones and smartphone. This stock closed up 6.1% to $21.62 in Thursday's trading session.
Thursday's Volume: 162,000
Three-Month Average Volume: 92,942
Volume % Change: 90%
From a technical perspective, CMGE spiked sharply higher here and broke out above some near-term overhead resistance at $21 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $16.26 to its intraday high of $22.44. During that uptrend, shares of CMGE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CMGE within range of triggering another big breakout trade. That trade will hit if CMGE manages to take out Thursday's high of $22.44 to its all-time high at $23.35 with high volume.
Traders should now look for long-biased trades in CMGE as long as it's trending above Thursday's low of $20.44 or above more near-term support at $19 and then once it sustains a move or close above those breakout levels with volume that hits near or above 92,942 shares. If that breakout hits soon, then CMGE will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $27 to $30.
FireEye
FireEye (FEYE) provides automated threat forensics and dynamic malware protection against advanced cyber threats, such as advanced persistent threats and spear phishing. This stock closed up 8.3% to $43.43 in Thursday's trading session.
Thursday's Volume: 1.07 million
Three-Month Average Volume: 519,955
Volume % Change: 123%
From a technical perspective, FEYE ripped sharply higher here right above its 50-day moving average of $38.42 with strong upside volume. This move is quickly pushing shares of FEYE within range of triggering a big breakout trade. That trade will hit if FEYE manages to take out Thursday's high of $43.85 to its all-time high of $44.55 with high volume.
Traders should now look for long-biased trades in FEYE as long as it's trending above $42 or above Thursday's low of $40.23 and then once it sustains a move or close above those breakout levels with volume that hits near or above 519,955 shares. If we get that breakout soon, then FEYE will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $50 to $60.
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.
RELATED LINKS:
>>5 Stocks Poised for Breakouts
>>5 Stocks With Big Insider Buying
>>5 Dividend Stocks Ready to Pay You More in 2014
Follow Stockpickr on Twitter and become a fan on Facebook.
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.
No comments:
Post a Comment