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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 to Break Out
With that in mind, let's take a look at several stocks rising on unusual volume today.
Linn Energy (LINE) acquires, develops various oil and gas properties in the U.S. This stock closed up 11.2% to $30.82 in Friday's trading session.
Friday's Volume: 10.40 million
Three-Month Average Volume: 2.15 million
Volume % Change: 450%
From a technical perspective, LINE skyrocketed higher here and broke out above some near-term overhead resistance at $29.79 with heavy upside volume. This move also pushed shares of LINE back above its 200-day moving average of $30.77. Market players should now look for a continuation move in the short-term if LINE can take out Friday's intraday high.
Traders should now look for long-biased trades in LINE as long as it's trending above Friday's low of $28.46 and then once it sustains a move or close above Friday's high of $31.53 with volume that hits near or above 2.15 million shares. If we get that move soon, then LINE will set up to re-test or possibly take out its next major overhead resistance levels at $33.50 to $35, or even $37.
Orient-Express Hotels (OEH) is a hotel and travel company focused on the luxury end of the leisure market with exposure to both mature and emerging national economies. This stock closed up 7.5% to $14.31 in Friday's trading session.
Friday's Volume: 3.10 million
Three-Month Average Volume: 456,006
Volume % Change: 551%
From a technical perspective, OEH gapped sharply higher here and broke out above its previous 52-week high at $13.99 with heavy upside volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $12.18 to its intraday high on Friday of $14.60. During that uptrend, shares of OEH have been making mostly higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in OEH as long as it's trending above Friday's low of $13.75 and then once it sustains a move or close above its new 52-week high at $14.60 with volume that hits near or above 456,006 shares. If we get that move soon, then OEH will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $18 to $20. 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.