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WINDERMERE, Fla. (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.
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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.
Zumiez (ZUMZ) is a specialty retailer of action sports related apparel, footwear, equipment and accessories operating under the Zumiez brand name. This stock is trading up 8% at $27.44 in recent trading.
Today’s Volume: 905,000
Average Volume: 609,542
Volume % Change: 139%
Shares of ZUMZ are rising sharply today after William Blair said investor sentiment is already weak and reiterated its outperform rating on the stock.
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From a technical perspective, ZUMZ is bouncing strongly to the upside here with above-average volume. This move is coming off of oversold territory, since its current relative strength index reading is near 40. This move is also coming after the stock recently plunged from its August high of $36.02 to today’s low of $25.01.
Traders should now look to play the next major breakout trade for ZUMZ if it can continue to bounce off oversold levels. That breakout will hit once ZUMZ manages to take out $28.33 to $29.86 with high volume. Traders should now look for long-biased trades in ZUMZ as long as it’s trending above today’s low of $25.01, and then once it sustains a move or close above those breakout levels with volume that’s near or above 609,542 shares. If that breakout triggers soon, then ZUMZ will have a great chance of re-testing or possibly taking out its 50-day moving average of $32.14.
Deckers Outdoor (DECK) is a designer, producer, marketer and brand manager of footwear, apparel and accessories. Deckers markets its products under three brands: UGG, Teva and Sanuk. This stock is trading up 3.6% at $36.27 in recent trading.
Today’s Volume: 1.8 million
Average Volume: 2 million
Volume % Change: 50%
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From a technical perspective, DECK is bouncing notably here with decent volume. This bounce is coming off of extremely oversold levels, since its current relative strength index (RSI) reading is 32. Oversold can always get more oversold, but this strength is coming after the stock fell from its August high of $51.65 to its recent low of $34.59.
Traders should now look for long-biased trades in DECK as long as its trending above today’s low of $34.59 with strong upside volume flows. I would consider any upside volume day that registers near or above 2 million shares as bullish. If DECK can sustain that trend, then this stock has a chance to bounce more and possibly tag $42.50 to its 50-day moving average of $45.13. Michael Kors
Michael Kors (KORS) engages in the design, marketing, distribution, and retail of branded women’s apparel and accessories, and men’s apparel. This stock is trading up 1.5% at $53.11 in recent trading.
Today’s Volume: 3.52 million
Average Volume: 3.54 million
Volume % Change: 70%
From a technical perspective, KORS is bouncing higher around some near-term support at $51.02 with decent volume. This move is coming after KORS sold off yesterday with massive downside volume.
Traders should now look for long-biased trades in KORS as long as it’s trending above $51.02 with strong upside volume flows. I would consider any upside volume day that registers near or above 3.54 million shares. If KORS can maintain that trend, then this stock will setup to re-test or possibly take out its all-time high of $57.35 in the near future.
On the flip side, I would avoid KORS or look for short-biased trades if it mangos to take out $51.02 with high volume. Any move below $51.02 with volume could put KORS into danger of filing a gap from August that started around $41. To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.