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.
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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.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
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Interface
Interface (TILE) designs, produces, and sells modular carpet products for the commercial, institutional, and residential markets primarily in the Americas, Europe, and the Asia-Pacific. This stock closed up 3.9% at $14.13 in Friday's trading session.
Friday's Volume: 1.35 million
Three-Month Average Volume: 344,989
Volume % Change: 301%
From a technical perspective, TILE bounced higher here right above its new 52-week low of $12.98 with strong upside volume flows. This stock recently gapped down sharply from $16 to $12.98 with monster downside volume flows. That move has pushed shares of TILE into oversold territory, since its current relative strength index reading is 28.95. Oversold can always get more oversold, but it's also an area from which a stock can experience a sharp bounce higher.
Traders should now look for long-biased trades in TILE as long as it's trending above Friday's intraday low of $13.38 or above its recent 52-week low of $12.98 and then once it sustains a move or close above Friday's intraday high of $14.56 with volume that's near or above 344,989 shares. If that move materializes soon, then TILE will set up to re-fill some of its previous gap-down-day zone from a few trading sessions ago that started at $16.
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Hi-Crush Partners LP
Hi-Crush Partners LP (HCLP) operates as a producer and supplier of monocrystalline sand. This stock closed up 6% at $43.19 in Friday's trading session.
Friday's Volume: 1.32 million
Three-Month Average Volume: 644,375
Volume % Change: 78%
From a technical perspective, HCLP bounced sharply higher here after breaking some near-term support at $40.29 in intraday action on Friday and then recovering above it with above-average volume. This stock has been downtrending badly for the last month and change, with shares moving lower from its high of $71.88 to its intraday low on Friday of $39.06. During that downtrend, shares of HCLP have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of HCLP have now started to bounce off oversold territory, since its current relative strength index reading is 27.59. Oversold can always get more oversold, but it's also an area from which as stock can experience a powerful bounce higher.
Traders should now look for long-biased trades in HCLP as long as it's trending above Friday's intraday low of $39.06 and then once it sustains a move or close above Friday's intraday high of $44.40 with volume that's near or above 644,375 shares. If that move gets started soon, then HCLP will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $48.20 to around $52 to $55.
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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.
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