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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.
Cognex (CGNX) is a provider of machine vision products that capture and analyze visual information in order to automate tasks, mainly in manufacturing processes, where vision is required. This stock closed up 1.7% at $57.97 in Tuesday's trading session.
Tuesday's Volume: 287,000
Three-Month Average Volume: 174,770
Volume % Change: 115%
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From a technical perspective, CGNX rose modestly higher here and broke out above some near-term overhead resistance levels at $57.41 to $57.90 with above-average volume. At last check, shares of CGNX closed at $57.97 with volume that was well above its three-month average action of 174,770 shares. Shares of CGNX are quickly moving within range of triggering another big breakout trade. That trade will hit if CGNX manages to take out its 52-week high at $59.02 with high volume.
Traders should now look for long-biased trades in CGNX as long as it's trending above Tuesday's low of $57.50 or above that $56 and then once it sustains a move or close above its 52-week high at $59.02 with volume that's near or above 174,770 shares. If that breakout hits soon, then CGNX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $62 to $65.
Infinera (INFN) provides optical networking equipment, software, and services to communications service providers, Internet content providers, cable operators, and subsea network operators worldwide. This stock closed up 9.3% at $10.14 in Tuesday's trading session.
Tuesday's Volume: 3.54 million
Three-Month Average Volume: 1.41 million
Volume % Change: 167%
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From a technical perspective, INFN skyrocketed higher here right off some near-term support at $9.24 with heavy upside volume. This strong bounce is coming after shares of INFN have been downtrending badly for the last two months, with shares sliding lower from its high of $12.16 to that low of $9.24. During that downtrend, shares of INFN have been making mostly lower highs and lower lows, which is bearish technical price action. That said, the bounce today could be setting up INFN for the end of its downside volatility and a possible continuation move higher.
Traders should now look for long-biased trades in INFN as long as it's trending above that key near-term support level at $9.24 and then once it sustains a move or close above Tuesday's high of $10.25 and above its 50-day at $10.85 with volume that's near or above 1.41 million shares. If we get that move soon, then INFN will set up to re-test or possibly take out its next major overhead resistance levels at $11.35 to its 52-week high at $12.16.
LogMeln (LOGM) provides SaaS-based, on-demand, remote-connectivity, collaboration and support solutions to small and medium-sized businesses, or SMBs, IT service providers, mobile carriers, and consumers. This stock closed up 2% at $30.39 in Tuesday's trading session.
Tuesday's Volume: 371,000
Three-Month Average Volume: 175,628
Volume % Change: 113%
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From a technical perspective, LOGM bounced modestly higher here right above some near-term support levels at $28.92 and its 50-day at $28.43 with strong upside volume. This stock has been trending sideways for the last month, with shares moving between $27.67 on the downside and $31.74 on the upside. Any high-volume move above the upper-end of its recent range could easily trigger a big breakout trade for LOGM. That trade will hit if LOGM manages to clear some near-term overhead resistance levels at Tuesday's high of $30.63 to its 52-week high at $31.74 with high volume.
Traders should now look for long-biased trades in LOGM as long as it's trending above some key near-term support levels at $28.92 to its 50-day at $28.43, and then once it sustains a move or close above those breakout levels with volume that's near or above 175,628 shares. If that breakout hits soon, then LOGM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $34.50 to $38.
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.