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3 Stocks Triggering Breakouts 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 Stocks Poised for Breakouts With that in mind, let's take a look at several stocks rising on unusual volume recently. Horizon Pharma
Horizon Pharma (HZNP), a specialty pharmaceutical company, through its subsidiaries, develops and commercializes medicines for the treatment of arthritis, pain and inflammatory diseases. This stock closed up 5.6% at $13.89 in Monday's trading session.
Monday's Volume: 5.35 million
Three-Month Average Volume: 1.87 million
Volume % Change: 187%
>>5 Hated Earnings Stocks You Should Love From a technical perspective, HZNP ripped higher here right off some near-term support at $13 with heavy upside volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $3.21 to its recent high of $14.27. During that uptrend, shares of HZNP have been consistently making higher lows and higher highs, which is bullish technical price action. Monday's spike higher is now quickly pushing shares of HZNP within range of triggering a big breakout trade. That trade will hit if HZNP manages to take out Monday's high of $14.13 to its all-time high at $14.27 with high volume.
Traders should now look for long-biased trades in HZNP as long as it's trending above some near-term support levels at $13 or at $12 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.87 million shares. If that breakout materializes soon, then HZNP will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $20.
Brown Shoe (BWS), a footwear company, engages in the retail and wholesale of footwear. This stock closed up 5.6% at $27.86 in Monday's trading session.
Monday's Volume: 782,000
Three-Month Average Volume: 290,584
Volume % Change: 163%
>>5 Stocks Under $10 Set to Soar From a technical perspective, BWS ripped sharply higher here with strong upside volume. This move briefly pushed shares of BWS into breakout and new 52-week-high territory, after the stock flirted with some key overhead resistance at $28.70. Shares of BWS closed just below that level at $27.86, but well off its daily low of $26.62. Market players should now look for a continuation move higher in the short-term if BWS manages to take out Monday's high of $28.73 with high volume.
Traders should now look for long-biased trades in BWS as long as it's trending above Monday's low of $26.62 or above $25 and then once it sustains a move or close above $28.73 with volume that hits near or above 290,584 shares. If we get that move soon, then BWS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $33 to $35. Core Laboratories NV
Core Laboratories (CLB) provides reservoir description, production enhancement and reservoir management services to the oil and gas industry in the Netherlands and internationally. This stock closed up 2.9% at $197.63 in Monday's trading session.
Wednesday's Volume: 421,000
Three-Month Average Volume: 265,021
Volume % Change: 50%
>>5 Stock Charts Screaming "Buy" in March From a technical perspective, CLB jumped notably higher here and broke out above some near-term overhead resistance at $195.94 with above-average volume. This breakout has now pushed shares of CLB above the upper-end of its long consolidating chart pattern that dates back a number of months. Shares of CLB are now quickly moving within range of triggering another big breakout trade. That trade will hit once CLB manages to take out Monday's high of $197.95 to its 52-week high at $200 with high volume.
Traders should now look for long-biased trades in CLB as long as it's trending above Monday's low of $191.60 to $190 and then once it sustains a move or close above those breakout levels with volume that's near or above 265,021 shares. If that breakout materializes soon, then CLB will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $210 to $220. 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.