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2 Stocks Spiking on Unusual Volume - views
MADISON, 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.
Westlake Chemical (WLK) is a manufacturer and marketer of basic chemicals, vinyls, polymers and fabricated products. This stock is trading up 4.6% at $86.31 in recent trading.
Today's Volume: 717,000
Average Volume: 553,889
Volume % Change: 142%
Shares of WLK are trending higher here after the company delivered a profit that beat Wall Street's expectations but missed on beating revenue expectations. Adjusted earnings per share rose 40.46% to $1.84 vs. EPS of $1.31 in the year-earlier quarter. Revenue decreased 16.45% to $864.6 million from the year-earlier quarter.
From a technical perspective, WLK is gapping higher here and quickly approaching its 50-day moving average at $88.05 with above-average volume. This move is starting to push shares of WLK within range of triggering a major breakout trade. That trade will hit if WLK manages to take out its 50-day at $88.05 and then once it clears more resistance at $88.98 with high volume.
Traders should now look for long-biased trades in WLK as long as it's trending above today's low of $84.65 and then once it sustains a move or close above those breakout levels with volume that hits near or above 553,889 shares. If that breakout triggers soon, then WLK will set up to re-test or possibly take out its next major overhead resistance levels at $92.50 to $95.
Addus Homecare (ADUS) provides home- and community-based services to older adults and younger disabled individuals in the U.S. This stock is trading up 9% at $13.67 in recent trading.
Today's Volume: 150,000
Average Volume: 125,417
Volume % Change: 120%
Shares of ADUS are soaring higher after the company delivered a profit and revenue that beat Wall Street's expectations. Adjusted earnings per share jumped 185.71% to 20 cents this quarter vs. EPS of 7 cents per share in the year-earlier quarter. Revenue dropped 7.24% to $63 million from the year-earlier quarter.
From a technical perspective, ADUS is ripping higher here and breaking out above some near-term overhead resistance levels at $12.72 to $12.80 with above-average volume. This move is quickly pushing shares of ADUS within range of triggering an even bigger breakout trade. That trade will hit if ADUS manages to clear some near-term overhead resistance at $14 and then once it takes out its 52-week high at $14.60 with high volume.
Traders should now look for long-biased trades in ADUS as long as it's trending above $12.80 or above today's low of $12.62, and then once it sustains a move or close above those breakout levels with volume that hits near or above 125,417 shares. If that breakout triggers soon, then ADUS will set up to enter new 52-week-high territory above $14.60, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $18 in the near future.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Madison, Wis.
At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Madison, 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.