Stock Quotes in this Article: AZO, BYI, ENDP, INCY, MIND, NFLX, TZOO

WINDERMERE, Fla. (Stockpickr) -- Professional traders that run 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.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by “superinvestors.”

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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.

Let's take a look at a several stocks rising on unusual volume today. They are all recording volume in midday trading that is already at least 50% above their average trading volume for a full day.

 

 

Endo Pharmaceuticals

Endo Pharmaceuticals (ENDP) is a specialty health care solutions company focused on branded products and generics, and devices and services. The stock is trading up 2% at $36.01 in recent trading.

Today’s Volume: 2.5 million shares

Average Volume: 1.3 million shares

Volume % Change: 336%

This stock is ripping to the upside today after the Food and Drug Administration has approved a new formulation of Endo’s pain drug Opana ER that is designed to be crush-resistant, which makes the drug safer and reduces the potential of abuse.

From a technical standpoint, ENDP has started to gap up above some past overhead resistance at $34.89 on heavy volume. This gap up is also trigging a breakout now that shares are moving above $34.89 with volume.

Market players should watch for a close today that is near the high of the day of $36.35. If we get that action, then this stock could be setting up trend significantly higher towards $40 to $42.

Endo is one of the top holdings at Bridgewater Associates and also shows up in D.E. Shaw's portfolio as of the most recently reported period.

 

Bally Technologies

Bally Technologies (BYI) is a diversified, worldwide gaming company that designs, manufactures, operates and distributes advanced technology-based gaming devices, systems and server-based solutions. The stock is trading up 2% at $38.29 in recent trading.

Today’s Volume: 497,000 shares

Average Volume: 595,758 shares

Volume % Change: 178%

This stock is advancing modestly today after JPMorgan upgraded the stock to overweight from neutral.

From a technical standpoint, BYI has recently found some buying support near its 200-day moving average of $36.02. This move today now sets the stock up for a big breakout if it can manage to take out some overhead resistance levels on heavy volume.

Traders should watch for a sustained high-volume move and close above $39.36. Look for volume that’s close to or well above 595,758 shares. If we see that action, look for BYI to re-test its next significantly overhead resistance level at $41.80.

Bally is one of the top holdings at Columbia Wanger Asset Management.

AutoZone

AutoZone (AZO) is a retailer and a distributor of automotive replacement parts and accessories. The stock is trading up 1.3% at $331.03 in recent trading.

Today’s Volume: 119,000 shares

Average Volume: 373,889 shares

Volume % Change: 67%

From a technical standpoint, AZO is starting to find some buying support today right around its 50-day moving average of $327.62 on decent volume.

Market players should watch to see if AZO can close above its 50-day today on volume that’s close to or above 373,889. If we get that action, then look for this stock to test $335 in the short-term and potentially make a run at $343 if $335 is taken out with volume.

AutoZone shows up on a recent list of 20 Winning Stocks to Post New Highs in 2012.

Incyte

Incyte (INCY) is a drug discovery and development company, focused on developing small molecule drugs to treat serious unmet medical needs. This stock is trading up 6% at $14.43 in recent trading.

Today’s Volume: 1.2 million shares

Average Volume: 2 million shares

Volume % Change: 50%

From a technical standpoint, INCY has started to spike back above its 50-day moving average of $13.75 on decent volume.

Market players should now watch for a sustained high-volume move and close above its next significant overhead resistance levels at 14.72 to $14.75. Look for volume above those levels that tracks in close to or above 2 million. If we get that action, then look for this stock to re-test $15.49 to $15.94 (its 200-day) in the near future.

Incyte shows up on a list of 10 Biotech Stocks Loved and Hated by the Pros.

Netflix

Netflix (NFLX) is an Internet subscription service streaming television shows and movies. This stock is trading up 6.8% at $75.79 in recent trading.

Today’s Volume: 7.2 million shares

Average Volume: 10.2 million shares.

Volume % Change: 62%

Shares of Netflix are soaring today after some rumors circulated trading desks that Verizon (VZ) could be interested in buying Netflix.

From a technical standpoint, NFLX has started to trigger a major breakout today above some past overhead resistance levels at $70.76 and $71.91 on decent volume.

Traders should now watch to see how NFLX closes today. Look for a close near the highs of the day on volume that’s close to or above 10.2 million shares. If we get that action, then this stock should setup to re-test $89.61 (its 50-day) on the coming days or weeks.

Netflix, one of TheStreet Ratigns' top-rated online retail stocks and one of SAC Capital's top holdings, shows up on a recent list of the 5 Worst Stocks of the Year.

Mitcham Industries

Mitcham Industries (MIND), through its subsidiaries, engages in the leasing, manufacture, and sale of seismic equipment to the oil and gas industry worldwide. This stock is trading up 1.8% at $20.83 in recent trading

Today’s Volume: 176,000 shares

Average Volume: 142,592 shares

Volume % Change: 79%

From a technical standpoint, MIND is trigging a big breakout today now that the stock has started to move above some past overhead resistance of $20.57 on decent volume. Volume today has already eclipsed its three-month average volume of 142,592 shares, which is bullish with the stock breaking out.

Market players should now watch for a sustained move and close above $20.5 to signal that this stock wants to trend higher.

The only cautionary sign for MIND is that the stock now shows a relative strength index (RSI) reading of 79.37. Any reading above 70 on any stock is considered overbought. This doesn’t mean that MIND can’t climb higher; it just means that if you start bearish action, then the buyers are most likely exhausted.

I featured MIND recently in "5 Stocks Set to Soar off Strong Earnings."

Travelzoo

Travelzoo (TZOO) is a global Internet media company. Travelzoo informs over 22 million subscribers worldwide, as well as millions of Website users, about the best travel, entertainment and local deals available from thousands of companies. This stock is trading up 2.8% at $28.02 in recent trading.

Today’s Volume: 507,000 shares

Average Volume: 717,156 shares

Volume % Change: 57%

From a technical standpoint, TZOO is starting to challenge its 50-day moving average today at $28.29 on decent volume.

Market players should now watch for a sustained high-volume move and close above the 50-day and $28.84 to trigger a much larger run higher. If TZOO can clear those levels on volume that’s near or above 717,156 shares, then this stock should setup to re-test $31 to $32.75 in the near future.

To see more stocks rising on unusual volume, inclusing Dollar General (DG), G-III Apparel Group (GIII) and Diageo (DEO), 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.