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.
CoStar Group
CoStar Group (CSGP) provides information, analytics, and marketing services to the commercial real estate industry in the U.S., the United Kingdom, and France. This stock closed up 4.5% to $169.51 in Friday's trading session.
Friday's Volume: 1.59 million
Three-Month Average Volume: 280,597
Volume % Change: 462%
From a technical perspective, CSGP ripped higher here right off its 50-day moving average of $164.09 with heavy upside volume. This move briefly pushed shares of CSGP into breakout territory, since this stock flirted with some near-term overhead resistance at $169.81. Shares of CSGP tagged an intraday high of $171, before closing just below that level at $169.51. Market players should now look for a continuation move higher in the short-term if CSGP manages to take out Friday's high of $171 with strong volume.
Traders should now look for long-biased trades in CSGP as long as it's trending above Friday's low of $163.48 and then once it sustains a move or close above Friday's high of $171 with volume that hits near or above 280,597 shares. If that move begins soon, the CSGP will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $174.85 to $179.80. Any high-volume move above those levels will then give CSGP a chance to re-test or possibly take out its next major overhead resistance level at $193.37.
E*Trade Financial
E*Trade Financial (ETFC), a financial services company, provides brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand name in the U.S. This stock closed up 4.3% at $20.74 in Friday's trading session.
Friday's Volume: 9.45 million
Three-Month Average Volume: 5.15 million
Volume % Change: 68%
From a technical perspective, ETFC spiked higher here right above its 200-day moving average of $19.55 with strong upside volume. This spike higher on Friday is starting to push shares of ETFC within range of triggering a big breakout trade above a key downtrend line. That trade will hit if ETFC manages to take out its 50-day moving average of $21.14 to some more key near-term overhead resistance levels at $21.48 to $21.90 with high volume.
Traders should now look for long-biased trades in ETFC as long as it's trending above its 200-day at $19.55 or above more near-term support at $19.24 and then once it sustains a move or close above those breakout levels with volume that's near or above 5.15 million shares. If that breakout kicks off soon, then ETFC will set up to re-test or possibly take out its next major overhead resistance levels at $22.95 to $23.25. Any high-volume move above those levels will then give ETFC a chance to tag its next major overhead resistance levels at $23.87 to its 52-week high at $25.58.
Autohome
Autohome (ATHM) operates as an online destination for automobile consumers in the People's Republic of China. This stock closed up 3.5% at $35.71 in Friday's trading session.
Friday's Volume: 683,000
Three-Month Average Volume: 381,997
Volume % Change: 65%
From a technical perspective, ATHM trended higher here back above its 50-day moving average of $34.45 with above-average volume. This spike higher on Friday is starting to push shares of ATHM within range of triggering a major breakout trade. That trade will hit if ATHM manages to take out some key overhead resistance levels at $36.80 to $37.79 with high volume.
Traders should now look for long-biased trades in ATHM as long as it's trending above Friday's low of $34.11 or above $33 and then once it sustains a move or close above those breakout levels with volume that's near or above 381,997 shares. If that breakout gets underway soon, then ATHM will set up to re-test or possibly take out its next major overhead resistance levels at $42.68 to $45, or even $46.96.
VeriFone Systems
VeriFone Systems (PAY) designs, markets, and services electronic payment solutions at the point of sale (POS) worldwide. This stock closed up 8.5% at $36.72 in Friday's trading session.
Friday's Volume: 6.17 million
Three-Month Average Volume: 1.72 million
Volume % Change: 277%
From a technical perspective, PAY gapped up sharply higher here right above its 50-day moving average of $33.20 with heavy upside volume. This sharp spike higher on Friday pushed shares of PAY into breakout and new 52-week-high territory, after this stock took out some key near-term overhead resistance at $35.38. Market players should now look for a continuation move higher in the short-term if PAY manages to take out its new 52-week high at $36.84 with strong upside volume.
Traders should now look for long-biased trades in PAY as long as it's trending above Friday's low of $34.95 and then once it sustains a move or close above $36.84 with volume that's near or above 1.72 million shares. If that move starts soon, then PAY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are its next major overhead resistance levels at $39 to $40. Any high-volume move above $40 will then give PAY a chance to re-fill some of its previous gap-down-day zone from May of 2012 that started just above $47.50.
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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