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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.
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.
With that in mind, let's take a look at several stocks rising on unusual volume today.
Valspar (VAL) is engaged in the manufacture and distribution of coatings, paints and related products. This stock closed up 1.1% at $67.13 in Wednesday's trading session.
Wednesday's Volume: 1.33 million
Three-Month Average Volume: 539,531
Volume % Change: 138%
From a technical perspective, VAL jumped higher here right above its 200-day moving average of $67.47 with strong upside volume. This stock briefly flirted with its 50-day moving average of $67.43 here, since VAL hit an intraday high of $67.73, before closing at $67.13. This stock also just gapped down sharply on Tuesday from $71.32 to $64.06. Shares of VAL are now moving within range of triggering a near-term breakout trade that could take the stock back into that gap down zone. That breakout will hit if VAL manages to take out its 50-day at $67.47 and then once it clears Wednesday's high of $67.73 with high volume.
Traders should now look for long-biased trades in VAL as long as it's trending above Wednesday's low of $65.92 and then once it sustains a move or close above those breakout levels with volume that this near or above 539,531 shares. If that breakout hits soon, then VAL will set up to re-fill some of its previous gap down zone that started at $71.32. Some possible upside targets if VAL gets into that gap with volume are $69 to $70.
Posco (PKX) is the largest integrated steel producer in Korea. This stock closed up 1.9% at $76.09 in Wednesday's trading session.
Wednesday's Volume: 462,000
Three-Month Average Volume: 204,588
Volume % Change: 113%
From a technical perspective, PKX spiked higher here right off its 200-day moving average of $75.09 with above-average volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $62.30 to its intraday high of $76.09. During that uptrend, shares of PKX have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in PKX as long as it's trending above its 200-day at $75.09 or above more near-term support at $72 and then once it sustains a move or close above Wednesday's high of $76.09 with volume that's near or above 204,588 shares. If we get that move soon, then PKX will set up to re-test or possibly take out its next major overhead resistance levels at $80 to $85.
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.
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.