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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.
>>5 Hated Earnings Stocks You Should Love With that in mind, let's take a look at several stocks rising on unusual volume recently.
Time Warner Cable
Time Warner Cable (TWC), together with its subsidiaries, offers video, high-speed data and voice services to residential and business service customers over its broadband cable systems in the U.S. This stock closed up 0.56% to $134.01 in Monday's trading session.
Monday's Volume: 4.02 million
Three-Month Average Volume: 2.90 million
Volume % Change: 55%
>>5 Stocks Ready to Break Out From a technical perspective, TWC spiked modestly higher here right off its 50-day moving average of $133.13 with above-average volume. This stock recently formed a triple bottom chart pattern at $129.69, $130.88 and $130.53. Following that bottom, shares of TWC have started to spike higher and move within range of triggering a major breakout trade. That trade will hit if TWC manages to take out Monday's high of $135.90 to some more resistance at $137.20 and then once it clears its 52-week high at $139.85 with high volume.
Traders should now look for long-biased trades in TWC as long as it's trending above $129.69 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.90 million shares. If that breakout hits soon, then TWC will set up to enter new 52-week-high territory above $139.85, which is bullish technical price action. Some possible upside targets off that move are $145 to $150. Herbalife
Herbalife (HLF), through its subsidiaries, produces and distributes weight management, sports and fitness, energy and targeted nutritional products; healthy meals and snacks; and personal care products worldwide. This stock closed up 7.2% to $69.02 in Monday's trading session.
Monday's Volume: 8.87 million
Three-Month Average Volume: 3.38 million
Volume % Change: 178%
>>5 Stocks Under $10 Set to Soar From a technical perspective, HLF spiked sharply higher here right above its 200-day moving average of $60.68 with heavy upside volume. This move pushed shares of HLF into breakout territory, after the stock took out some near-term overhead resistance levels just above $66. Market players should now look for a continuation move higher in the short-term if HLF can manage to take out Monday's high of $69.02 with strong volume.
Traders should now look for long-biased trades in HLF as long as it's trending above $66 or above $64 and then once it sustains a move or close $69.02 with volume that hits near or above 3.38 million shares. If we get that move soon, then HLF will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $73.55 to $74.82, or even $76.
Taser International (TASR) engages in the development, manufacture and sale of conducted electrical weapons for use in law enforcement, federal, military, corrections, private security and personal defense markets worldwide. This stock closed up 5.2% to $16.90 in Monday's trading session.
Monday's Volume: 3.02 million
Three-Month Average Volume: 1.28 million
Volume % Change: 135%
>>5 Stocks With Big Insider Buying From a technical perspective, TASR gapped up sharply higher here back above its 50-day moving average of $16.77 with strong upside volume. This move is starting to push shares of TASR within range of triggering a major breakout trade. That trade will hit if TASR manages to take out Monday's high of $17.52 to some more key overhead resistance levels at $18.60 to its 52-week high at $18.88 with high volume.
Traders should now look for long-biased trades in TASR as long as it's trending above Monday's low of $16.63 or above $16 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.28 million shares. If that breakout hits soon, then TASR will set up to enter new 52-week-high territory above $18.88, which is bullish technical price action. Some possible upside targets off that breakout are $24 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.
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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.