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3 Stocks Rising on 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.
>>5 Hated Earnings Stocks You Should Love With that in mind, let's take a look at several stocks rising on unusual volume recently. Splunk
Splunk (SPLK) provides software solutions that provide real-time operational intelligence in the U.S. and internationally. This stock closed up 4.8% to $60.50 in Monday's trading session.
Monday's Volume: 6.08 million
Three-Month Average Volume: 2.64 million
Volume % Change: 127%
From a technical perspective, SPLK bounced sharply higher here with strong upside volume. This stock has been downtrending badly for the last month and change, with shares moving lower from its high of $106.15 to its low of $55.55. During that downtrend, shares of SPLK have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of SPLK are now starting to bounce higher off oversold levels, since its current relative strength index reading is 33.57. Oversold can always get more oversold, but it's also an area where a stock can rebound sharply higher from.
Traders should now look for long-biased trades in SPLK as long as it's trending above Monday's low of $58.86 or above $58 and then once it sustains a move or close above Monday's intraday high of $61.95 with volume that hits near or above 2.64 million shares. If that move gets underway soon, then SPLK will set up to re-test or possibly take out its next major overhead resistance levels at $65 to its 200-day moving average of $66.09. Any high-volume move above those levels will then give SPLK a chance to tag $70 to $75.
Andersons (ANDE) is engaged in the grain, ethanol, plant nutrient, railcar leasing, turf and cob products, and consumer retailing businesses. This stock closed up 4% at $61.46 in Monday's trading session.
Monday's Volume: 421,000
Three-Month Average Volume: 269,673
Volume % Change: 57%
From a technical perspective, ANDE ripped higher here with above-average volume. This spike higher on Monday is quickly pushing shares of ANDE within range of triggering a big breakout trade. That trade will hit if ANDE manages to take out some near-term overhead resistance levels at $61.72 to its 52-week high at $62.28 with high volume.
Traders should now look for long-biased trades in ANDE as long as it's trending above some near-term support levels at $59 or at $58 and then once it sustains a move or close above those breakout levels with volume that this near or above 269,673 shares. If that breakout hits soon, then ANDE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $65 to $70.
Aruba Networks (ARUN) provides enterprise mobility solutions worldwide. This stock closed up 5.9% at $19.98 in Monday's trading session.
Monday's Volume: 3.09 million
Three-Month Average Volume: 2.11 million
Volume % Change: 85%
From a technical perspective, ARUN bounced sharply higher here right above its 200-day moving average of $18.49 with above-average volume. This move briefly pushed shares of ARUN back above its 50-day moving average of $20, before the stock closed just below that level at $19.98. Shares of ARUN are now starting to trend within range of triggering a near-term breakout trade. That trade will hit if ARUN manages to take out Monday's high of $20.10 to more near-term overhead resistance at $20.46 with high volume.
Traders should now look for long-biased trades in ARUN as long as it's trending above Monday's low of $19 or above its 200-day at $18.49 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.11 million shares. If that breakout triggers soon, then ARUN will set up to re-test or possibly take out its next major overhead resistance levels at $22.10 to its 52-week high at $23.58. 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.