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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.
Moneygram International (MGI) is a global payment services company whose major products include global money transfers, bill payment solutions and financial paper products. This stock closed up 6.6% at $22.06 in Friday's trading session.
Friday's Volume: 492,000
Three-Month Average Volume: 139,470
Volume % Change: 329%
From a technical perspective, MGI ripped higher here right off its 50-day moving average of $20.65 with above-average volume. This move is quickly pushing shares of MGI within range of triggering a major breakout trade. That trade will hit if MGI manages to take out some near-term overhead resistance at $23.39 to its 52-week high at $24.88 with high volume.
Traders should now look for long-biased trades in MGI as long as it's trending above its 50-day at $20.65 or above more near-term support at $20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 139,470 shares. If that breakout triggers soon, then MGI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $29 to $30.
Keep in mind that MGI is set to report earnings on July 25. Look to play that breakout action before the quarter and then after as long as the stock continues to uptrend once earnings are out.
SEI Investments (SEIC) is a provider of investment processing, fund processing and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors and affluent families create and manage wealth. This stock closed up 2.2% at $31.45 in Friday's trading session.
Friday's Volume: 3.35 million
Three-Month Average Volume: 849,529
Volume % Change: 293%
Shares of SEIC trended up on Friday after the company reported a profit and beat Wall Street estimates but came up short on beating revenue expectations.
From a technical perspective, SEIC moved higher here right off some near-term support at $30.50 with heavy upside volume. This move pushed shares of SEIC into breakout and new 52- week-high territory, since the stock took out some near-term resistance at $31.07. This breakout could be setting up SEIC for much higher prices, since it entered new highs with above-average volume.
Traders should now look for long-biased trades in SEIC as long as it's trending above its 50-dy at $29.48 and then once it sustains a move or close above its new 52-week high at $31.55 with volume that's near or above 849,529 shares. If we get that move soon, then SEIC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $35 to $40.
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.