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3 Big-Volume Stocks to Trade for Breakouts - views
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. GasLog
GasLog (GLOG), together with its subsidiaries, owns, operates and manages vessels in the liquefied natural gas market worldwide. This stock closed up 7.7% at $26.67 in Monday's trading session.
Monday's Volume: 2.46 million
Three-Month Average Volume: 1.24 million
Volume % Change: 56%
From a technical perspective, GLOG exploded higher here back above its 50-day moving average of $25.39 with above-average volume. This move higher on Monday also pushed shares of GLOG into breakout territory, since the stock took out some key overhead resistance levels at $24.88 to $24.99. Market players should now look for a continuation move to the upside in the short-term if GLOG manages to take out Monday's intraday high of $26.90 with high volume.
Traders should now look for long-biased trades in GLOG as long as it's trending above Monday's low of $24.63 or above $24 and then once it sustains a move or close above $26.90 with volume that hits near or above 1.24 million shares. If we get that move soon, then GLOG will set up to re-test or possibly take out its 52-week high of $28.89.
DXP Enterprises (DXPE) is engaged in distributing maintenance, repair and operating products, equipment and services to industrial customers in the U.S. This stock closed up 5.1% at $71.91 in Monday's trading session.
Monday's Volume: 284,000
Three-Month Average Volume: 187,229
Volume % Change: 50%
From a technical perspective, DXPE ripped sharply higher here right above some near-term support at $67.60 with above-average volume. This move also pushed shares of DXPE into breakout territory, since the stock took out some near-term overhead resistance at $70.53. Market players should now look for a continuation move to the upside in the short-term if DXPE manages to take out Monday's intraday high of $72.03 with strong upside volume.
Traders should now look for long-biased trades in DXPE as long as it's trending above Monday's low of $68.06 or above more near-term support at $67.60 and then once it sustains a move or close above $72.03 with volume that's near or above 187,229 shares. If that breakout kicks off soon, then DXPE will set up to re-fill some of its previous gap-down-day zone from May that started above $85.
Luxottica Group (LUX), together with its subsidiaries, provides luxury and sports eyewear worldwide. This stock closed up 1.2% at $56.69 in Monday's trading session.
Monday's Volume: 156,000
Three-Month Average Volume: 51,512
Volume % Change: 205%
From a technical perspective, LUX trended modestly higher here right above its 50-day moving average of $55.85 with above-average volume. This stock has been uptrending for the last month and change, with shares moving higher from its low of $54.48 to its recent high of $57.20. During that uptrend, shares of LUX have been making mostly higher lows and higher highs, which is bullish technical price action. This spike higher on Monday is starting to push shares of LUX within range of triggering a big breakout trade. That trade will hit if LUX manages to take out some key near-term overhead resistance levels at $57.20 to $57.63 and then once it clears its 52-week high of $58.55 with high volume.
Traders should now look for long-biased trades in LUX as long as it's trending above its 50-day at $55.85 or above more near-term support at $54.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 51,512 shares. If that breakout kicks off soon, then LUX will set up to enter new 52-week-high territory above $58.55, which is bullish technical price action. Some possible upside targets off that breakout are $63 to $65. 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.