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.
Infoblox
Infoblox (BLOX) develops, markets and sells automated network control solutions worldwide. This stock closed up 5.6% to $18.16 in Wednesday's trading session.
Wednesday's Volume: 8.33 million
Three-Month Average Volume: 1.58 million
Volume % Change: 708%
From a technical perspective, BLOX ripped higher here right above its recent low of $17.10 with monster upside volume. This stock recently gapped down sharply from over $32 to $17.10 with monster downside volume. That move has pushed shares of BLOX into oversold territory, since its current relative strength index reading is 20.38. Oversold can always get more oversold, but it's also an area where a stock can bounce sharply higher from.
Traders should now look for long-biased trades in BLOX as long as it's trending above its recent low of $17.10 and then once it sustains a move or close above Wednesday's high of $18.38 to its gap-down-day high of $18.94 with volume that hits near or above 1.58 million shares. If we get that move soon, then BLOX will set up to re-fill some of its previous gap-down-day zone that started at $32. Look for a quick move towards $24 to $25.
Generac
Generac (GNRC) designs, manufactures, and markets a range of generators and other engine powered products for the residential, light commercial, industrial, and construction markets in the U.S. Canada, and Mexico. This stock closed up 3.9% to $49.89 in Wednesday's trading session.
Wednesday's Volume: 2.09 million
Three-Month Average Volume: 768,027
Volume % Change: 166%
From a technical perspective, GNRC bounced notably higher here right above some near-term support at $47.95 with above-average volume. This stock has been uptrending over the last month, with shares moving higher from its low of $45.02 to its intraday high of $50.72. During that move, shares of GNRC have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GNRC within range of triggering a near-term breakout trade. That trade will hit if GNRC manages to take out Wednesday's high of $50.72 to its 50-day moving average of $52.25 with high volume.
Traders should now look for long-biased trades in GNRC as long as it's trending above support at $47.95 and then once it sustains a move or close above those breakout levels with volume that hits near or above 768,027 shares. If that breakout hits soon, then GNRC will set up to re-test or possibly take out its next major overhead resistance levels at $56 to its 52-week high at $57.29.
Ophthotech
Ophthotech (OPHT), biopharmaceutical company, develops various therapeutics to treat diseases of the eye. This stock closed up 4.2% at $34.04 in Wednesday's trading session.
Wednesday's Volume: 1.57 million
Three-Month Average Volume: 171,718
Volume % Change: 866%
From a technical perspective, OPHT ripped higher here and broke out above some near-term overhead resistance at $33.42 with heavy upside volume. This move is quickly pushing shares of OPHT within range of triggering an even bigger breakout trade. That trade will hit if OPHT manages to clear Wednesday's high of $34.42 to its all-time high at $36.60 with high volume.
Traders should now look for long-biased trades in OPHT as long as it's trending above Wednesday's low of $32.42 or above its 50-day at $30.91 and then once it sustains a move or close above those breakout levels with volume that hits near or above 171,718 shares. If that breakout hits soon, then OPHT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.
TripAdvisor
TripAdvisor (TRIP) is an online travel research company, enabling users to plan and have a trip. This stock closed up 7.2% at $90.27 in Wednesday's trading session.
Wednesday's Volume: 9.08 million
Three-Month Average Volume: 1.83 million
Volume % Change: 406%
From a technical perspective, TRIP gapped up sharply higher here and broke out into new 52-week-high territory with heavy upside volume. Market players should now look for a continuation move higher in the short-term if TRIP manages to take out Wednesday's high of $93.13 with high volume.
Traders should now look for long-biased trades in TRIP as long as it's trending above Wednesday's low of $87.60 and then once it sustains a move or close above $93.13 with volume that's near or above 1.83 million shares. If we get that move soon, then TRIP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $100 to $110.
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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