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WINDERMERE, Fla. (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. Many times when above average volume moves into equity it precedes a large spike in volatility.
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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.
With that in mind, let's take a look at several stocks rising on unusual volume today.
SanDisk (SNDK) develops and manufactures data storage solutions in a range of form factors using its flash memory, controller and firmware technologies. This stock is trading up 14% at $40.01 in recent trading.
Today’s Volume: 15.3 million
Average Volume: 6.1 million
Volume % Change: 390%
Shares of SNDK are soaring after the company reported non-GAAP earnings of $51 million, or 21 cents per share, on $1.03 billion of revenue for the second quarter, versus Wall Street estimates of 18 cents per share and $1.02 billion in revenue.
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From a technical perspective, SNDK is gapping up huge here with monster volume, and this move has pushed the stock into near-term breakout territory since it’s cleared some overhead resistance at $37.39 to $37.64.
Traders should now look to play the next major breakout for SNDK. That trade will trigger once SNDK takes out today’s high of $40.45 and then some more overhead resistance at $42 with high volume. Traders should look for long-biased trades once SNDK sustains a move or close above those levels with volume that’s near or above 6.1 million shares. If we get that action soon, then SNDK will have a great chance of re-testing or possibly taking out its 200-day moving average or $44.19. Any move over its 200-day will bring a previous gap-down from over $50 into play.
As of the most recently reported period, SNDK was one of David Tepper's Appaloosa Management portfolio.
Align Technology (ALGN) designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design and computer-aided manufacturing digital services used in dentistry, orthodontics, and dental records storage. This stock is trading up 5% at $33.30 in recent trading.
Today’s Volume: 2.6 million
Average Volume: 1.2 million
Volume % Change: 273%
Shares of ALGN are ripping to the upside today after the company said it sold more of its product in the second quarter to more than double its profit. The company earned $28.5 million or 34 cents per share, vs. $11.2 million, or 14 cents per share for the same period last year. Its revenue jumped to $145.6 million from $120.1 million on stronger sales across all its product and customer channels.
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From a technical perspective, ALGN is soaring back above its 50-day moving average of $31.87 here with above average volume. This move is quickly pushing ALGN within range of triggering a near-term breakout trade. That trade will hit once ALGN takes out its 52-week high of $35.56 with high volume.
Traders should now look for long-biased trades in ALGN as long as it’s trending above its 50-day with strong upside volume flows. I would consider any upside volume day that registers near or above 1.2 million shares as bullish. If we continue to see that action, then look to add to any long positions once ALGN takes out $35.65 with heavy volume. If that breakout triggers soon, then ALGN could tag $40.
SLM's (SLM) primary business is to originate, service and collect loans it makes to students and/or their parents to finance the cost of their education. This stock is trading up 5.3% at $16.00 in recent trading.
Today’s Volume: 6.75 million
Average Volume: 4.25 million
Volume % Change: 163%
Shares of SLM are ripping to the upside today after Janney Capital upgraded the stock to buy from neutral.
From a technical perspective, SLM is moving sharply higher here with above average volume. This move is quickly pushing SLM within range of triggering a major breakout trade. That trade will hit once SLM takes out some near-term overhead resistance at $16.44, and then some past overhead resistance at $16.74 with high volume.
Traders should now look for long-biased trades once SLM sustains a move or close above those levels with volume that’s near or above 4,247,980 shares. If we get that action soon, then SLM will enter new 52-week-high territory once it clears $17.00, which would be bullish technical price action.
SLM was also featured in “5 Rocket Stocks to Buy for Earnings Season.”
Cubist Pharmaceuticals (CBST) is a biopharmaceutical company focused on the research, development and commercialization of therapies to treat serious medical conditions in acutely ill patients who are hospitalized or are being treated in other acute care settings. This stock is trading up 1.4% at $41.20 in recent trading.
Today’s Volume: 859,000
Average Volume: 800,610
Volume % Change: 88%
>>5 Biotech Stocks Under $10 Set to Soar Shares of CBST are moving modestly higher today after the company beat Wall Street expectations as sales for its lead drug Cubicin soared. Total revenue registered a 30% rise to $231 million, and Cubicin sales rose 20% to $212 million.
From a technical perspective, CBST is moving modestly higher here with above average volume, after the stock briefly traded below both its 50-day and 200-day moving averages. This move is now pushing CBST within range of triggering a near-term breakout trade. That trade will trigger once CBST takes out some near-term overhead resistance at $41.85 with high volume.
Traders should now look for long-biased trades once CBST sustains a move or close over $41.85 with volume that’s near or above 800,610 shares. If we get that action soon, then CBST will have a great chance of re-testing and possibly taking out its next major overhead resistance levels at $43 to $44.95.
Lufkin Industries (LUFK) is a global supplier of artificial lift products, technology, services and solutions, including automated control equipment and analytical products for artificial lift equipment, to the oil and gas industry. This stock is trading up 3.5% at $57.82 in recent trading.
Today’s Volume: 408,000
Average Volume: 429,586
Volume % Change: 59%
From a technical perspective, LUFK is moving sharply to the upside here with decent volume, and this stock has started to take out its 50-day moving average of $56.43.
Traders should continue to look for long-biased trades as long as LUFK is trending above its 50-day with strong upside volume flows. I would consider any upside volume day that registers near or above 429,586 shares as bullish. If LUFK can hold this trend above its 50-day, then this stock could continue to spike higher and possibly take out its next significant overhead resistance levels at $60.20 to $61.87. If those levels are taken out with volume, then LUFK could re-test its 200-day moving average of $67.03.
NetScout Systems (NTCT) designs, develops, manufactures, markets, licenses, sells and supports market application and network performance management and service assurance solutions for the Internet protocol (IP) based service delivery environments. This stock is trading up 4.3% at $22.88 in recent trading.
Today’s Volume: 278,000
Average Volume: 273,338
Volume % Change: 55%
Shares of NTCT are soaring today after the company said its first quarter net income more than doubled as bookings increased. The company earned $5 million, or 12 cents per share, in the quarter. That's up from $2.4 million, or 6 cents per share, a year ago.
From a technical perspective, NTCT is ripping to the upside here with above average volume, and this stock has started to trigger a major breakout trade since it’s cleared some past overhead resistance at $22.49.
Traders should continue to look for long-biased trades in NTCT as long as this stock is trending above $22.49 with strong upside volume flows. I would consider any upside volume day that registers near or above 273,338 shares as bullish. If NTCT can hold its trend above $22.49, then this stock has a great chance of hitting $25 to $26 in the near future.
To see more stocks rising on unusual volume, check out the Stocks Rising On Unusual Volume portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.