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3 Stocks Rising on Big 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.
>>QE5 Is Coming -- Here Is What It Means to Your Portfolio With that in mind, let's take a look at several stocks rising on unusual volume recently.
Natus Medical (BABY) provides newborn care and neurology health care products worldwide. This stock closed up 6.9% to $26.08 in Wednesday's trading session.
Wednesday's Volume: 636,000
Three-Month Average Volume: 393,673
Volume % Change: 104%
From a technical perspective, BABY spiked sharply higher here back above its 50-day moving average of $25.35 with strong upside volume. This move pushed shares of BABY into breakout territory, since the stock took out some near-term overhead resistance at $25.94. Shares of BABY are now starting to trend within range of triggering a much bigger breakout trade. That trade will hit if BABY manages to clear some more near-term overhead resistance levels at $27 to its 52-week high at $27.71 with high volume.
Traders should now look for long-biased trades in BABY as long as it's trending above Wednesday's low of $24.32 or above $24 and then once it sustains a move or close above those breakout levels with volume that hits near or above 393,673 shares. If that breakout triggers soon, then BABY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $33 to $35.
SodaStream International (SODA) engages in the development, manufacture and sale of home beverage carbonation systems that enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. This stock closed up 10.7% to $44.76 in Wednesday's trading session.
Wednesday's Volume: 8.17 million
Three-Month Average Volume: 1.58 million
Volume % Change: 477%
From a technical perspective, SODA exploded higher here and broke out above some near-term overhead resistance at $42.25 with heavy upside volume. Shares of SODA also flirted with some more near-term overhead resistance at $45.20, before it closed just below that level at $44.76. Market players should now look for a continuation move higher in the short-term if SODA manages to take out Wednesday's high of $47.30 with high volume.
Traders should now look for long-biased trades in SODA as long as it's trending above $42.25 and then once it sustains a move or close above $47.30 with volume that hits near or above 1.58 million shares. If that move kicks off soon, then SODA will set up to re-fill some of its previous gap-down-day zone from January that started above $50. Any high-volume move above $52 to $52.50 will then give SODA a chance to tag $55.
Medidata Solutions (MDSO) provides cloud-based clinical development solutions for life sciences in the U.S. and internationally. This stock closed up 7.9% at $43.93 in Wednesday's trading session.
Wednesday's Volume: 4.41 million
Three-Month Average Volume: 920,495
Volume % Change: 409%
From a technical perspective, MDSO ripped sharply higher here right above its recent low of $37.15 with heavy upside volume. This stock recently gapped down sharply from over $52 to $37.15 with heavy downside volume. Following that gap down, shares of MDSO have started to rebound sharply and move back into that gap-down-day zone with strong upside volume. Market players should now look for a continuation move higher in the short-term if MDSO manages to take out Wednesday's high of $44.30 with high volume.
Traders should now look for long-biased trades in MDSO as long as it's trending above Wednesday's low of $40.36 and then once it sustains a move or close above $44.30 with volume that hits near or above 920,495 shares. If we get that move soon, then MDSO will set up to re-fill some of its previous gap-down-day zone that started near $52. Some possible upside targets if MDSO gets into that gap with volume are $47 to $50, or even its 200-day moving average at $53.40. 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.