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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.
>>Buy These 5 Rocket Stocks to Beat the Market With that in mind, let's take a look at several stocks rising on unusual volume recently.
Banco Macro (BMA) provides various banking products and services to individuals, entrepreneurs, companies and corporate customers in Argentina. This stock closed up 4.3% at $37.26 in Monday's trading session.
Monday's Volume: 506,000
Three-Month Average Volume: 194,039
Volume % Change: 181%
From a technical perspective, BMA trended notably higher here with above-average volume. This spike higher on Monday is quickly pushing shares of BMA within range of triggering a near-term breakout trade. That trade will hit if BMA manages to take out Monday's intraday high of $37.58 to its 52-week high of $37.99 with high volume.
Traders should now look for long-biased trades in BMA as long as it's trending above Monday's low of $34.81 or above past resistance at $34 and then once it sustains a move or close above those breakout levels with volume that this near or above 194,039 shares. If that breakout gets underway soon, then BMA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45. Alder Biopharmaceuticals
Alder Biopharmaceuticals (ALDR), a clinical-stage biopharmaceutical company, discovers, develops and commercializes various therapeutic antibodies in the U.S. and Australia. This stock closed up 5.2% at $18.83 in Monday's trading session.
Monday's Volume: 257,000
Three-Month Average Volume: 161,835
Volume % Change: 187%
From a technical perspective, ALDR ripped higher here right above some near-term support at $17.12 with above-average volume. This stock recently pulled back off its all-time high of $22.95 to its recent low of $17.12. Following that pullback, shares of ALDR are now starting to rebound higher and move within range of triggering a near-term breakout trade. That trade will hit if ALDR manages to take out Monday's intraday high of $19.37 to some more near-term overhead resistance at $20.25 with high volume.
Traders should now look for long-biased trades in ALDR as long as it's trending above Monday's intraday low of $17.56 or above more near-term support at $17.12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 161,835 shares. If that breakout triggers soon, then ALDR will set up to re-test or possibly take out its all-time high at $22.95. Any high-volume move above that level will then give ALDR a chance to tag $25.
Tonix Pharmaceuticals (TNXP), a development stage specialty pharmaceutical company, focuses on the identification and development of pharmaceutical products for the disorders of central nervous system. This stock closed up 5.5% to $13.11 in Monday's trading session.
Monday's Volume: 249,000
Three-Month Average Volume: 105,244
Volume % Change: 207%
From a technical perspective, TNXP ripped sharply higher here with above-average volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $8.14 to its intraday high of $13.77. During that uptrend, shares of TNXP have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TNXP within range of triggering a major breakout trade. That trade will hit if TNXP manages to take out some key past resistance levels at $14.19 to $15.46 and then once it clears $15.88 with high volume.
Traders should now look for long-biased trades in TNXP as long as it's trending above Monday's intraday low of $12.45 or above $12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 105,244 shares. If that breakout kicks off soon, then TNXP will set up to re-test or possibly take out its next major overhead resistance levels at $17 to $19.88. 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.