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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 recently. JA Solar (JASO), through its subsidiaries, engages in the design, development, production, marketing and sale of solar power products based on crystalline silicon technologies. This stock closed up 5.6% at $11.18 in Friday's trading session.
Friday's Volume: 4.97 million
Three-Month Average Volume: 2.32 million
Volume % Change: 185%
>>5 Stocks Under $10 Set to Soar From a technical perspective, JASO ripped higher here right above some near-term support at $10 with strong upside volume. This move is quickly pushing shares of JASO within range of triggering a major breakout trade. That trade will hit if JASO manages to take out Friday's high of $11.19 to some more near-term overhead resistance at $11.32 with high volume.
Traders should now look for long-biased trades in JASO as long as it's trending above some key near-term support levels at $10 or its 50-day at $9.73 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.32 million shares. If that breakout materializes soon, then JASO will set up to re-test or possibly take out its 52-week high at $12.80. Quantum Fuel Systems Technologies (QTWW) engages in the design, development and production of compressed natural gas storage tanks and packaged fuel systems. This stock closed up 9% to $10.25 in Friday's trading session.
Friday's Volume: 3.8 million
Three-Month Average Volume: 751,266
Volume % Change: 436%
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From a technical perspective, QTWW spiked sharply higher and broke out above some near-term overhead resistance at $9.80 with heavy upside volume. This move pushed shares of QTWW into new 52-week-high territory, which is bullish technical price action. Market players should now watch for a continuation move higher in the short-term if QTWW manages to take out its new 52-week high at $11.25 with strong volume.
Traders should now look for long-biased trades in QTWW as long as it's trending above Friday's low of $9 and then once it sustains a move or close above $11.25 with volume that hits near or above 751,266 shares. If we get that move soon, then QTWW will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $13 to $14. 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.