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3 Stocks Breaking Out With Unusual Volume - 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. Read More: Do You Own These 5 Toxic Stocks? Watch Out! With that in mind, let's take a look at several stocks rising on unusual volume recently. H&E Equipment Services
H&E Equipment Services (HEES) operates as an integrated equipment services company. This stock closed up 3% to $38.20 in Friday's trading session.
Friday's Volume: 466,000
Three-Month Average Volume: 235,138
Volume % Change: 97%
From a technical perspective, HEES jumped higher here right around its 50-day moving average of $36.75 with above-average volume. This spike higher here is quickly pushing shares of HEES within range of triggering a near-term breakout trade. That trade will hit if HEES manages to take out some key near-term overhead resistance levels at $39.22 to $39.42 with high volume.
Traders should now look for long-biased trades in HEES as long as it's trending above Friday's intraday low of $36.47 or above $36 and then once it sustains a move or close above those breakout levels with volume that hits near or above 235,138 shares. If that breakout hits soon, then HEES will set up to re-test or possibly take out its next major overhead resistance levels at $41 to its 52-week high at $41.51. Any high-volume move above $41.51 will then give HEES a chance to make a run at $45.
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Thoratec (THOR) develops, manufactures and markets proprietary medical devices used for mechanical circulatory support for the treatment of heart failure patients. This stock closed up 2.3% to $23.27 in Friday's trading session.
Friday's Volume: 4 million
Three-Month Average Volume: 723,578
Volume % Change: 470%
From a technical perspective, THOR trended higher here right above its new 52-week low of $22.50 with monster upside volume. This stock recently gapped down sharply from around $33 to $22.50 with large downside volume. Following that move, shares of THOR have started to rebound and it's now moving within range of triggering a major breakout trade. That trade will hit if THOR manages to take out Friday's intraday high of $23.30 and then once it clears its gap-down-day high of $24.98 with high volume.
Traders should now look for long-biased trades in THOR as long as it's trending above its 52-week low of $22.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 723,578 shares. If that breakout gets underway soon, then THOR will set up to re-fill some of its previous gap-down-day zone that started near $33.
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Infinity Pharmaceuticals (INFI), a drug discovery and development company, focuses on discovering, developing, and delivering medicines to people with difficult-to-treat diseases. This stock closed up 2.7% at $10.84 in Friday's trading session.
Friday's Volume: 801,000
Three-Month Average Volume: 515,829
Volume % Change: 75%
From a technical perspective, INFI trended higher here with above-average volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $8.80 to its recent high of $11.08. During that uptrend, shares of INFI have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of INFI within range of triggering a near-term breakout trade. That trade will hit if INFI manages to take out its 50-day moving average of $10.95 to some more near-term overhead resistance at $11.08 with high volume.
Read More: 4 Stocks Warren Buffett Is Selling in 2014 Traders should now look for long-biased trades in INFI as long as it's trending above some key near-term support levels at $10.50 or at $10.25 and then once it sustains a move or close above those breakout levels with volume that hits near or above 515,829 shares. If that breakout kicks off soon, then INFI will set up to re-test or possibly take out its next major overhead resistance levels at $12 to its 200-day moving average of $12.15. Any high-volume move above those levels will then give INFI a chance to tag its next major overhead resistance levels at $13 to $13.25.
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.