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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.
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.
Power Integrations (POWI) designs, develops, manufactures and markets proprietary, high-voltage, analog integrated circuits for use in AC-DC and DC-DC power conversion in the consumer, communications, computer and industrial electronics markets. This stock closed up 5.9% at $55.15 in Wednesday's trading session.
Wednesday's Volume: 571,000
Three-Month Average Volume: 218,547
Volume % Change: 173%
From a technical perspective, POWI ripped higher here right above some near-term support at $50.68 with above-average volume. This move also pushed shares of POWI into breakout and new 52-week-high territory, since the stock took out some near-term overhead resistance at $55.38. At last check, POWI closed a bit off its intraday high and volume was well above its three-month average action of 218,547 shares.
Traders should now look for long-biased trades in POWI as long as it's trending above Wednesday's low of $52.60 and then once it sustains a move or close above Wednesday's high of $55.59 with volume that this near or above 218,547 shares. If we see that move soon, then POWI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $60 to $62.
Take-Two Interactive Software
Take-Two Interactive Software (TTWO) is a developer, marketer and publisher of interactive entertainment for consumers around the globe. This stock closed up 3.3% at $17.56 in Wednesday's trading session.
Wednesday's Volume: 4.70 million
Three-Month Average Volume: 2.08 million
Volume % Change: 147%
From a technical perspective, TTWO spiked higher here and broke out above some past overhead resistance levels at $17.35 to $17.54 with above-average volume. Shares of TTWO also flirted with some more resistance at $17.58 and the stock tagged new 52-week highs. At last check, shares of TTWO closed a bit off its intraday high of $17.84 and volume was well above its three-month average action of 2.08 million shares.
Traders should now look for long-biased trades in TTWO as long as it's trending above some support at $16.50 and then once it sustains a move or close above Wednesday's high at $17.84 with volume that hits near or above 2.08 million shares. If we get that move soon, then TTWO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $25.
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.
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.