- 5 Big Stocks to Trade for Gains as QE3 Ends
- How to Trade the Market's Most-Active Stocks
- 4 Big Stocks Making Headlines -- and How to Trade Them
- 4 Stocks Breaking Out on Big Volume
- 5 Stocks Spiking on Unusual Volume
3 Stocks Spiking 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 Stocks Under $10 Set to Soar With that in mind, let's take a look at several stocks rising on unusual volume recently. Dicerna Pharmaceuticals
Dicerna Pharmaceuticals (DRNA), a biopharmaceutical company, focuses on the discovery and development of treatments for liver diseases and cancers based on a proprietary RNA interference technology platform in the U.S. and internationally. This stock closed up 2.4% to $15.26 in Friday's trading session.
Friday's Volume: 350,000
Three-Month Average Volume: 157,630
Volume % Change: 100%
From a technical perspective, DRNA bounced notably higher here right off its new 52-week low at $14.36 with above-average volume. This stock has been downtrending badly for the last month, with shares moving lower from its high of $23.39 to its 52-week low of $14.36. During that downtrend, shares of DRNA have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of DRNA have now started to bounce higher off its 52-week low with volume and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if DRNA manages to take out Friday's intraday high of $15.42 to more resistance at $16.91 and then above its 50-day moving average of $17.56 with high volume.
Traders should now look for long-biased trades in DRNA as long as it's trending above its 52-week low of $14.36 and then once it sustains a move or close above those breakout levels with volume that hits near or above 157,630 shares. If that breakout hits soon, then DRNA will set up to re-test or possibly take out its next major overhead resistance levels at $19.68 to around $21.
Align Technology (ALGN) operates as a medical device company primarily in the U.S. and internationally. This stock closed up 5.8% at $56.36 in Friday's trading session.
Friday's Volume: 1.80 million
Three-Month Average Volume: 1.07 million
Volume % Change: 75%
From a technical perspective, ALGN gapped up sharply higher here back above both its 50-day moving average of $53.41 and its 200-day moving average of $54.18 with above-average volume. This strong gap to the upside on Friday is quickly pushing shares of ALGN within range of triggering a big breakout trade. That trade will hit if ALGN manages to take out Friday's intraday high of $56.91 to some more near-term overhead resistance at $57.79 with high volume.
Traders should now look for long-biased trades in ALGN as long as it's trending above Friday's intraday low of $55 or above its 200-day at $54.18 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.07 million shares. If that breakout kicks off soon, then ALGN will set up to re-test or possibly take out its next major overhead resistance levels at $60 to $62, or even its 52-week high at $65.10.
Constant Contact (CTCT) provides online marketing tools that are designed for small organizations, including small businesses, associations, and non-profits. This stock closed up 3% at $32.76 in Friday's trading session.
Friday's Volume: 839,000
Three-Month Average Volume: 389,554
Volume % Change: 152%
From a technical perspective, CTCT jumped higher here right above its 50-day moving average of $30.60 with above-average volume. This spike higher on Friday briefly pushed shares of CTCT into breakout and new 52-week-high territory, since this stock flirted with some key near-term overhead resistance at $33.54. Market players should now look for a continuation move to the upside in the short-term if CTCT manages to take out Friday's intraday high of $33.74 with strong upside volume flows.
Traders should now look for long-biased trades in CTCT as long as it's trending above its 50-day at $30.60 and then once it sustains a move or close above $33.74 with volume that hits near or above 389,554 shares. If that move gets underway soon, then CTCT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $35 to $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.
Twitter and become a fan on Facebook.
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.