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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 Stocks Set to Soar on Bullish Earnings With that in mind, let's take a look at several stocks rising on unusual volume recently. Gibraltar Industries
Gibraltar Industries (ROCK) manufactures and distributes building products. This stock closed up 3.5% at $18.87 in Monday's trading session.
Monday's Volume: 140,000
Three-Month Average Volume: 90,129
Volume % Change: 145%
From a technical perspective, ROCK spiked notably higher here back above its 50-day moving average of $18.18 with above-average volume. This stock has been trending sideways and consolidating for the last three months, with shares moving between $16.87 on the downside and $19.23 on the upside. This spike higher on Monday is now starting to push shares of ROCK within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if ROCK manages to take out Monday's high of $19 to its 52-week high of $19.29 with high volume.
Traders should now look for long-biased trades in ROCK as long as it's trending above Monday's low of $17.82 or above more support at $17.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 90,129 shares. If that breakout kicks off soon, then ROCK will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $24 to $25. GlycoMimetics
GlycoMimetics (GLYC), a clinical stage biotechnology company, focuses on the discovery and development of glycomimetic drugs to address unmet medical needs resulting from diseases. This stock closed up 8.1% at $16.33 in Monday's trading session.
Monday's Volume: 1.15 million
Three-Month Average Volume: 183,726
Volume % Change: 530%
From a technical perspective, GLYC spiked sharply higher here right above some key near-term support at $14 with monster upside volume. This move also pushed shares of GLYC into breakout territory, since the stock took out some near-term overhead resistance at $16. Market players should now look for a continuation move higher in the short-term if GLYC manages to take out Monday's high of $16.45 to its all-time high of $18.99 with high volume.
Traders should now look for long-biased trades in GLYC as long as it's trending above $15 and then once it sustains a move or close above $16.45 to $18.99 with volume that's near or above 183,726 shares. If that move gets underway soon, then GLYC will set up to enter new all-time-high territory above $18.99, which is bullish technical price action. Some possible upside targets off that move are $23 to $25.
Innospec (IOSP) develops, manufactures, blends, markets, and supplies fuel additives, oilfield chemicals, personal care and fragrance ingredients, and other specialty chemicals to oil refineries, personal care and fragrance companies, and other chemical and industrial companies worldwide. This stock closed up 2.4% at $45.23 in Monday's trading session.
Monday's Volume: 319,000
Three-Month Average Volume: 117,547
Volume % Change: 179%
From a technical perspective, IOSP trended notably higher here right above both its 50-day moving average of $43.81 and its 200-day moving average of $43.90 with above-average volume. This move on Monday is starting to push shares of IOSP within range of triggering a near-term breakout trade. That trade will hit if IOSP manages to take out some near-term overhead resistance levels at $46.09 to $46.63 with strong volume.
Traders should now look for long-biased trades in IOSP as long as it's trending above its 50-day at $43.81 or above more near-term support at $43.10 and then once it sustains a move or close above those breakout levels with volume that's near or above 117,547 shares. If that breakout materializes soon, then IOSP will set up to re-test or possibly take out its next major overhead resistance levels at $48 to its 52-week high at $49.41. Any high-volume move above its 52-week high will then give IOSP a chance to trend north of $50. 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.