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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.
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 number of 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.
HSN (HSNI) is an interactive multi-channel retailer. The stock is trading up 2.7% at $36.30 in recent trading.
Today’s Volume: 835,000
Average Volume: 425,136
Volume % Change: 252%
From a technical standpoint, HSNI is starting to challenge its 50-day moving average today on heavy volume.
Traders should now watch for a sustained high-volume move and close above the 50-day at $36.34 to signal that HSNI wants to trend higher. The volume is already there, so if we get a strong close look for HSNI to re-test some near-term overhead resistance at $37.19 to $38.45 in the near future.
HSNI is one of the top-yielding specialty retail stocks.
Apple (AAPL) is trading up 1.2% at $499.39 in recent trading.
Today’s Volume: 10.7 million
Average Volume: 12.55 million
Volume % Change: 69%
From a technical standpoint, AAPL has tagged the psychologically important $500 level today on strong volume. This marks the first time that AAPL has traded at and above $500.
Since AAPL broke out above its earnings-day after-hours high of $460, the stock has soared over 40 points. This huge spike up has pushed AAPL into overbought territory, with a relative strength index (RSI) reading of 86.40.
This overbought condition would keep me away from imitating longer-term buys, but traders can still look for short-term trades as long as AAPL continues to trend above $500.
Melco Crown Entertainment
Melco Crown Entertainment (MPEL) is a developer, owner and, through its subsidiary Melco Crown Gaming, operator of casino gaming and entertainment resort facilities focused on the Macau market. The stock is trading up 4.9% at $12.09 in recent trading.
Today’s Volume: 6.1 million
Average Volume: 6.09 million
Volume % Change: 105%
From a technical standpoint, MPEL is trading within range of some big breakout levels, with the stock rising today on heavy volume.
Market players should look for long biased trades in MPEL if this stock can manage to take out some overhead resistance levels at $12.25 to $12.40 with volume. Look for volume on a move above those breakout levels that’s near or well above 6,086,990 shares. If we get that action soon, then look for MEPL to test $13 to $14 in the near future.
Melco shows up on a list of 5 Casino Stocks to Bet On in 2012.
Columbus McKinnon (CMCO) is a global designer, manufacturer and marketer of hoists, rigging tools, cranes, actuators, and other material handling products serving a range of commercial and industrial end user markets. This stock is trading up 3.4% at $17.63 in recent trading.
Today’s Volume: 207,000
Average Volume: 89,266
Volume % Change: 310%
From a technical standpoint, CMCO has been on a massive tear of late, with the stock soaring from its December low of $11.40 to its current price of $17.62.
If you want to see what a high-volume up move looks like, then make sure to study this chart. During February, this stock saw massive up volume flow into the name as it skyrocketed. Now, CMCO is approaching another breakout if it can manage to trade above $18.50.
Traders should look for a sustained high-volume move and close above that that level to signal that CMCO wants to trend higher. Look for volume that’s near or well above 89,266 shares.
Westport Innovations (WPRT) is a provider of engine and fuel system technologies utilizing gaseous fuels. This stock is trading up 5% at $44.33 in recent trading.
Today’s Volume: 1.3 million
Average Volume: 1.05 million
Volume % Change: 151%
Market players should continue to look for long-biased trades in WPRT as long as the stock can continue to trend above $43.36, and see strong upside volume flows. One potential target is $50 if WPRT can hold above that breakout level of $43.36.
Priceline.com (PCLN) is a global online travel company that offers its customers a range of travel services, including the opportunity to purchase hotel room reservations, car rentals, airline tickets, vacation packages, cruises and destination services in a price-disclosed manner. This stock is trading up 4.7% at $570.84 in recent trading.
Today’s Volume: 744,000
Average Volume: 843,795
Volume % Change: 66%
From a technical standpoint, PCLN has started to trigger a big breakout trade today now that this stock is moving above some past overhead resistance at $561.88 on decent volume.
Market players should now look for a sustained high-volume move and close above $561.88 to signal that PCLN wants to continue to uptrend. Look the stock to close above $561.88 and near its daily highs today on volume that’s near or well above 843,795.
If we get that action soon, then target a move towards $600 in the near future, as long as the stock continues to trend above the breakout level.
U.S. Home Systems
U.S. Home Systems (USHS) is engaged in the specialty product home improvement business. This stock is trading up 6.8% at $10.79 in recent trading.
Today’s Volume: 189,000
Average Volume: 55,163
Volume % Change: 403%
From a technical standpoint, USHS recently triggered a major breakout trade once the stock took out some near-term overhead resistance at $9.39 on monster volume. Since triggering that breakout, the stock has continued on its upward part to its current price of $10.79.
That said, USHS is now entering overbought territory since its current relative strength index (RSI) is now 85.87. This indicates an overbought condition, but just being overbought doesn’t mean the stock is going to fall any time soon. It does mean that caution is warranted on any new longer-term bullish bets.
In the short-term, I would continue to look for long biased trades as long as USHS can continue to trend above the breakout level of $9.39.
USHS is one of TheStreet Ratings' top-rated building products stocks.
Clean Energy Fuels
Clean Energy Fuels (CLNE), together with its wholly owned subsidiaries, is engaged in the business of selling natural gas fueling solutions to its customers, primarily in the U.S. and Canada. This stock is trading up 5.9% at $17.25 in recent trading.
Today’s Volume: 1.2 million
Average Volume: 1.1 million
Volume % Change: 90%
From a technical standpoint, CLNE has taken out one major breakout level today since the stock is moving above some past overhead resistance at $17.21 on heavy volume.
Traders should now watch for a second breakout level to get taken out at $17.85. A sustained high-volume move and close above $17.85 will setup CLNE to trend higher. Look for volume that’s near or well above 1.1 million shares.
If we get that action soon, then look for CLNE to re-test $19.36 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.
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.