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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.
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With that in mind, let's take a look at several stocks rising on unusual volume today.
Garmin (GRMN) is a provider of navigation, communication and information devices and applications, which are enabled by global positioning system GPS technology. This stock closed up 3.6% to $46.58 in Friday's trading session.
Friday's Volume 2.49 million
Three-Month Average Volume: 1.18 million
Volume % Change: 108%
>>5 Rocket Stocks to Buy for 2014 Gains From a technical perspective, GRMN spiked higher here right above some near-term support at $44.56 with above-average volume. This move is quickly pushing shares of GRMN within range of triggering a near-term breakout trade. That trade will hit if GRMN manages to take out its 50-day moving average of $47 and some more near-term overhead resistance at $47.01 with high volume.
Traders should now look for long-biased trades in GRMN as long as it's trending above some near-term support at $44.56 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.18 million shares. If that breakout hits soon, then GRMN will set up to re-test or possibly take out its next major overhead resistance levels at $49.26 to its 52-week high at $50.39. Any high-volume move above those levels will then give GRMN a chance to tag $55.
YY (YY), through its subsidiaries, operates an online social platform in the Peoples Republic of China. This stock closed up 10.6% to $58.02 in Friday's trading session.
Friday's Volume: 5.31 million
Three-Month Average Volume: 1.63 million
Volume % Change: 256%
>>5 Ways You Can Trade Like a Hedge Fund in 2014 From a technical perspective, YY ripped here and broke out into new all-time-high territory above some previous resistance at $56.75 with heavy upside volume. This breakout took shares of YY above its previous range, which had the stock moving between $46 on the downside and $56 on the upside. Market players should now look for a continuation move higher in the short term if YY can manage to take out Friday's high of $58.35 with strong volume.
Traders should now look for long-biased trades in YY as long as it's trending above Friday's low of $53.01 and then once it sustains a move or close above $48.35 with volume that hits near or above 1.63 million shares. If we get that move soon, then YY will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $65 to $70.
Proofpoint (PFPT) provides threat protection, regulatory compliance, archiving and governance, and secure communication solutions worldwide. This stock closed up 5.4% to $34.18 in Friday's trading session.
Friday's Volume 904,000
Three-Month Average Volume: 339,508
Volume % Change: 147%
>>5 Stocks Under $10 Set to Soar From a technical perspective, spiked sharply higher here and broke out into new all-time-high territory with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $26.92 to it's intraday of $34.97. During that uptrend, shares of PFPT have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in PFPT as long as it's trending above Friday's low of $32.56 or above $31 and then once it sustains a move or close above Friday's high of $34.97 volume that hits near or above 339,508 shares. If we get that move soon, then PFPT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $43.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
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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.