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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.
>>5 Bargain Bin Stocks to Buy in March With that in mind, let's take a look at several stocks rising on unusual volume recently. Ocera Therapeutics (OCRX), a clinical-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for patients with acute and chronic liver disease. This stock closed up 3.4% to $16.77 in Wednesday's trading session.
Wednesday's Volume: 206,000
Three-Month Average Volume: 81,613
Volume % Change: 155%
From a technical perspective, OCRX trended higher here and broke out above some near-term overhead resistance at $16.45 with strong upside volume. This stock has been uptrending for the last month, with shares moving higher from its low of $12.01 to its intraday high of $16.97. During that move, shares of ORCX have been making mostly higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if OCRX takes out Wednesday's high of $16.97 with high volume.
Traders should now look for long-biased trades in OCRX as long as it's trending above $16 or $15 and then once it sustains a move or close above $16.97 with volume that hits near or above 81,613 shares. If that move gets underway soon, then OCRX will set up to re-test or possibly take out its 52-week high at $19.94. E-House (EJ), through its subsidiaries, operates as a real estate services company in China. This stock closed up 10.6% at $14.28 in Wednesday's trading session.
Wednesday's Volume: 3.81 million
Three-Month Average Volume: 1.96 million
Volume % Change: 190%
From a technical perspective, EJ soared sharply higher here back above its 50-day moving average of $13.29 with heavy upside volume. This move also pushed shares of EJ into breakout territory, since the stock took out some near-term overhead resistance levels at $13.02 to $14.03. Market players should now look for a continuation move higher in the short-term if EJ manages to take out Wednesday's high of $14.32 with strong volume.
Traders should now look for long-biased trades in EJ as long as it's trending above Wednesday's low of $12.90 and then once it sustains a move or close above $14.32 with volume that's near or above 1.96 million shares. If we get that move soon, then EJ will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $15.14.
Ciena (CIEN) provides communications networking equipment, software and services that support the transport, switching, aggregation, and management of voice, video and data traffic worldwide. This stock closed up 2.6% at $25.36 in Wednesday's trading session.
Wednesday's Volume: 5.19 million
Three-Month Average Volume: 3.65 million
Volume % Change: 63%
From a technical perspective, CIEN spiked higher here right above some near-term support at $24.05 with above-average volume. This move is quickly pushing shares of CIEN within range of triggering a near-term breakout trade. That trade will hit if CIEN manages to take out some key near-term overhead resistance levels at $25.50 to $26.50 with high volume.
Traders should now look for long-biased trades in CIEN as long as it's trending above some key near-term support at $24.05 or above its 50-day at $23.54 and then once it sustains a move or close above those breakout levels with volume that's near or above 3.65 million shares. If that breakout kicks off soon, then CIEN will set up to re-test or possibly take out its 52-week high at $27.94. 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.