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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. >>5 Stocks Poised for Breakouts
With that in mind, let's take a look at several stocks rising on unusual volume today. Fuel Systems Solutions
Fuel Systems Solutions (FSYS) designs, manufactures and supplies alternative fuel components and systems for transportation and industrial applications. This stock closed up 3.7% at $13.95 in Monday's trading session.
Monday's Volume: 434,000
Three-Month Average Volume: 121,175
Volume % Change: 261% >>5 Breakout Trades Under $10
From a technical perspective, FSYS spiked higher here with above-average volume. This stock has been downtrending badly for the last three months, with shares plunging lower from its high of $21.44 to its intraday low of $13.25. During that downtrend, shares of FSYS have been consistently making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of FSYS into oversold territory, since its current relative strength index reading is 19.9. Oversold can always get more oversold, but it's also an area from which a stock can make a powerful bounce higher.
Traders should now look for long-biased trades in FSYS as long as it's trending above Monday's low of $13.25 and then once it sustains a move or close above Monday's high of $14.22 with volume that hits near or above 121,175 shares. If we get that move soon, then FSYS will set up for a powerful bounce that could take the stock back towards $16 to its 200-day at $17.05.
EZCorp (EZPW) is a provider of specialty consumer financial services. This stock closed up 5.4% at $11.96 in Monday's trading session.
Monday's Volume: 1.61 million
Three-Month Average Volume: 331,657
Volume % Change: 326% >>5 Rocket Stocks to Buy in November
From a technical perspective, EZPW ripped higher here right off its 52-week low of $11.30 with strong upside volume. This stock has been downtrending badly for the last three months, with shares moving lower from its high of $19.44 to its recent low of $11.30. During that downtrend, shares of EZPW have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of EZPW have now entered oversold territory, since its current relative strength index reading is 19.63. Oversold can always get more oversold, but it's also an area from which a stock can make a powerful bounce higher.
Traders should now look for long-biased trades in EZPW as long as it's trending above its 52-week low of $11.30, and then once it sustains a move or close above Monday's high at $12.07 with volume that hits near or above 331,657 shares. If we get that move soon, then EZPW will set up for a large oversold bounce that could take the stock back towards $13.50 to $14.50, or even $15.50. 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.