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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.
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 today.
Onconoca Therapeutics (ONTX) is engaged in the discovery and development of small-molecule product candidates for the treatment of cancer. This stock closed up 6.3% to $16.68 in Monday's trading session.
Monday's Volume: 388,000
Three-Month Average Volume: 141,960
Volume % Change: 175%
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From a technical perspective, ONTX bounced sharply higher here right above its recent low of $15.12 with above-average volume. This stock has been downtrending badly for the last month, with shares plunging lower from its high of $31.13 to its 52-week low of $15.12. During that drop, shares of ONTX have been consistently making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of ONTX into oversold territory, since its current relative strength index reading is 26.41. Oversold can always get more oversold, but it's also an area a stock can experience a powerful bounce higher from.
Traders should now look for long-biased trades in ONTX as long as it's trending above its 52-week low at $15.12 and then once it sustains a move or close above Monday's high of $16.95 with volume that hits near or above 141,960 shares. If we get that move soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels at $20 to $22, or even its 50-day moving average of $24.38. Cameron International
Cameron International (CAM) is a provider of flow equipment products, systems and services to worldwide oil, gas and process industries. This stock closed up 2.2% at $54.44 in Monday's trading session.
Monday's Volume: 11.19 million
Three-Month Average Volume: 3.09 million
Volume % Change: 294%
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From a technical perspective, CAM bounced modestly higher here right above its recent low of $52.50 with heavy upside volume. This stock recently gapped down sharply from over $63 to below $52.50 with heavy downside volume. That move pushed shares of CAM into oversold territory, since its current relative strength index reading is 31.60. Oversold can always get more oversold, but it's also an area a stock can bounce sharply higher from. The action in CAM on Monday could be signaling that this stock is ready to bounce and see an end in the short-term to its downside volatility.
Traders should now look for long-biased trades in CAM as long as it's trending above Monday's low of $53.02 or above $52.50 and then once it sustains a move or close above Monday's high of $54.67 with volume that hits near or above 3.09 million shares. If we get that move soon, then CAM will set up to bounce higher and potentially tag $57 to its 50-day moving average at $59.39. 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.