3 Big-Volume Stocks in Breakout Territory

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.

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With that in mind, let's take a look at several stocks rising on unusual volume recently.

Kandi Technologies Group

Kandi Technologies Group (KNDI), through its subsidiaries, designs, develops, manufactures and commercializes various vehicles. This stock closed up 5.6% at $19.12 in Wednesday's trading session.

Wednesday's Volume: 5.58 million

Three-Month Average Volume: 1.86 million

Volume % Change: 202%

From a technical perspective, KNDI ripped sharply higher here with heavy upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $10.85 to its recent high of $19.92. During that uptrend, shares of KNDI have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Wednesday is starting to push shares of KNDI within range of triggering a near-term breakout trade. That trade will hit if KNDI manages to take out Wednesday's intraday high of $19.44 to some more key overhead resistance at $19.92 with high volume.

Traders should now look for long-biased trades in KNDI as long as it's trending above Wednesday's intraday low of $17.64 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.86 million shares. If that breakout hits soon, then KNDI will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high at $22.40.

Cash America International

Cash America International (CSH) provides specialty financial services to individuals through retail services locations and e-commerce activities. This stock closed up 5.8% to $43.95 in Wednesday's trading session.

Wednesday's Volume: 1.05 million

Three-Month Average Volume: 360,721

Volume % Change: 161%

From a technical perspective, CSH gapped sharply higher here right above its 200-day moving average of $41.12 with strong upside volume flows. This sharp spike to the upside on Wednesday is quickly pushing shares of CSH within range of triggering a near-term breakout trade. That trade will hit if CSH manages to take out its 50-day moving average of $44.75 to some more key overhead resistance levels at $45.33 to $47 with high volume.

Traders should now look for long-biased trades in CSH as long as it's trending above Wednesday's intraday low of $42.31 and then once it sustains a move or close above those breakout levels with volume that hits near or above 360,721 shares. If we get that move soon, then CSH will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $48.30.

AMC Networks

AMC Networks (AMCX) owns and operates various cable television's brands delivering content to audiences, and a platform to distributors and advertisers in the U.S. and internationally. This stock closed up 4.4% at $63.61 in Wednesday's trading session.

Wednesday's Volume: 2.77 million

Three-Month Average Volume: 1.04 million

Volume % Change: 164%

From a technical perspective, AMCX gapped up sharply higher here right off its 50-day moving average of $60.94 with above-average volume. This sharp move higher on Wednesday pushed shares of AMCX into breakout territory, since the stock took out some near-term overhead resistance levels at $63.11 to $63.37. This move also pushed shares of AMCX into its previous gap-down-day zone from May that started just above $66. Market players should now look for a continuation move to the upside in the short-term if AMCX manages to clear Wednesday's intraday high of $64.32 with high volume.

Traders should now look for long-biased trades in AMCX as long as it's trending above Wednesday's intraday low of $61.89 and then once it sustains a move or close above $64.32 with volume that this near or above 1.04 million shares. If that move gets started soon, then AMCX will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $66.51 to close to $70.

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.

RELATED LINKS:

>>3 Big Tech Stocks on Traders' Radars

>>5 Stocks Under $10 Making Big Moves

>>5 Breakout Stocks for a Market Near All-Time Highs

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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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Stemline Therapeutics, Inc. () is making headway this week, with the company’s rating improving to an A (“strong buy”) from a B (“buy”) last week. For more information, get Portfolio Grader’s complete analysis of STML stock.

Pharmacyclics, Inc. () is bettering its rating of C (“hold”) from last week to a B (“buy”) this week. Pharmacyclics is a pharmaceutical company developing products to improve upon current therapeutic approaches to cancer, atherosclerosis, and retinal disease. For more information, get Portfolio Grader’s complete analysis of PCYC stock.

This week, Acorda Therapeutics, Inc. () pushes up from a C to a B rating. Acorda Therapeutics is a commercial stage biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that improve neurological function in people with multiple sclerosis (MS), spinal cord injury and other disorders of the central nervous system. For more information, get Portfolio Grader’s complete analysis of ACOR stock.

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BioMarin Pharmaceutical () earns a B this week, jumping up from last week’s grade of C. BioMarin Pharmaceutical develops and commercializes innovative pharmaceuticals for serious diseases and medical conditions. Shares of the stock have been trading at an exceptionally rapid pace, up threefold from the week prior. For more information, get Portfolio Grader’s complete analysis of BMRN stock.

Seattle Genetics, Inc. () is seeing ratings go up from a C last week to a B this week. Seattle Genetics is a clinical-stage biotechnology company that is focused on the development and commercialization of monoclonal antibody-based therapies for the treatment of cancer and autoimmune disease. For more information, get Portfolio Grader’s complete analysis of SGEN stock.

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Is Mattel Up For A Great Q2?

The toy industry has become quite dynamic and is changing with the change in tastes and preferences of people. However, there has been a general shift to gadgets such as tablets and iPads, as children too are fond of such devices. Hence, toy sales are affected to some extent. In order to win back customer interests, the industry players are trying hard.

Industry players such as Mattel (MAT) and Hasbro (HAS) have suffered from this change. This is clearly reflected in their stock price, which has declined since the beginning of the year. Shares of Hasbro have dropped 1.5% whereas that of Mattel has dropped 17%.

The competitive front

Even if we look at the change in share price in the last one year, Mattel's stock price have decreased by 15.8%. On the contrary, Hasbro has inched up by 13.7%. This is mainly because of Hasbro's commendable efforts, which has helped in attracting customers.

For instance, Hasbro's introduction of Digital Gaming and its partnership with companies to introduce toys related to movies, such as Transformers, have been quite effective and successful. Also, it has teamed up with many retailers such as Wal-Mart, Target and Mc Donald's for its franchises.

However, Mattel too has undertaken a host of initiatives to lure more children to its products. For instance, even Mattel plans to partner with retailers so that it can attract more customers and gets a wider exposure.

Expansionary moves

Also, it plans to expand its footprint in Canada, by introducing American Doll in the region. However, this expansion will be made in partnership with Indigo Books & Music Inc., one of the largest gift, book and specialty retailers in Canada. Although this is quite a logical strategy since Canada is close to the U.S. and the brand is well-known to the Canadian people, this move has some drawbacks.

Firstly, the anti-American sentiment in Canada might force people to shun its products, resulting in huge losses for the retailer. Hence, it is better that the company did not go ahead with opening its wholly owned stores in the region. Secondly, it has a lot of competition in the Canadian market who offers similar products at a lower price. The regional players have a strong physical as well as an online presence.

Moreover, the entire feel of the American Girl brand is absent in Indigo stores, which are smaller in size and do not have any other themes, such as the Cafe area, Doll Hospital and Doll Pet Shop. These factors play an important role in the buying decision of customers in the U.S.

What to expect from Mattel this quarter?

Mattel is slated to report its second quarter results this week. Analysts expect a top line of $1.19 billion, a growth of 1.8% over last year. This is probably because of warmer weather which should attract more customers to its stores. However, the bottom line is expected to drop to $0.18 per share from $0.21 per share in the previous quarter. The company is unable to manage its costs, which is weighing on its earnings.

However, its launch of Entrepreneur Barbie might be a game changer. The new concept Barbie comes with a tablet, smartphone and a briefcase.

Mixed quarter expected

Although the new Barbie will boost Mattel's sales, enabling the retailer to meet the revenue estimate, it is difficult to say how the bottom line will change. Also, it faces stiff competition from peer Hasbro. Therefore, the second quarter looks mixed with higher revenue but a lower bottom line.

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SanDisk Corporation (SNDK) Earnings Report: What to Expect? WDC & STX

The Q2 2014 earnings report for storage solutions stock SanDisk Corporation (NASDAQ: SNDK), a peer or competitor of Western Digital Corp (NASDAQ: WDC) and Seagate Technology PLC (NASDAQ: STX), is scheduled for after the market closes on Wednesday. Aside from the SanDisk Corporation earnings report, it should be said that the Western Digital Corp Q4 2014 earnings report is scheduled for July 30th while the Seagate Technology PLC Q4 2014 earnings report is scheduled for after the market closes on Thursday. However, SanDisk Corporation has been getting some bullish attention from analysts lately plus the company has recently announced a new acquisition.  

What Should You Watch Out for With the SanDisk Corporation Earnings Report?

First, here is a quick recap of SanDisk Corporation's recent earnings history from Yahoo! Finance:

Earnings HistoryJun 13Sep 13Dec 13Mar 14

EPS Est	0.93	1.32	1.58	1.26
EPS Actual	1.21	1.59	1.71	1.44
Difference	0.28	0.27	0.13	0.18
Surprise %	30.10%	20.50%	8.20%	14.30%

 

Back in mid April, SanDisk Corporation reported a 13% first quarter revenue increase and a 12% sequential decrease to $1.51 billion. On a GAAPbasis, first quarter net income was $269 million, or $1.14 per diluted share, compared to net income of $166 million, or $0.68 per diluted share, in the first quarter of fiscal 2013 and $338 million, or $1.45 per diluted share, in the fourth quarter of fiscal 2013. The CEO commented:

"We delivered record first quarter results, driven by 61 percent growth in our SSD revenue and strong retail performance. We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives."

This time around and according to the Yahoo! Finance analyst estimates page, the consensus expects revenue of $1.60 billion and EPS of $1.39 - slightly higher than EPS of $1.38 expected sixty days ago and EPS of $1.34 expected ninety days ago.

On the news front and just today, Stifel raised its price target on SanDisk Corporation as they expect the company's June quarter results to beat consensus estimates and they predict that guidance for its September quarter may also beat expectations. Stifel believes that demand is shifting towards SanDisk Corporation's high valued products and it keeps a Buy rating on shares.

At the end of June, Pacific Crest Securities' analyst Monika Garg also raised her price target, as well as her 2015 sales and EPS estimates for SanDisk Corporation. She commented that a tight environment for NAND flash logic gates in 2015, due to limited 3D NAND supply, is also expected to aid the company's profit margins.

However, the big news came in mid-June when SanDisk Corporation announced a definitive agreement to acquire Fusion-IO, Inc (NYSE: FIO), a leading developer of flash-based PCIe hardware and software solutions that enhance application performance in enterprise and hyperscale datacenters, in an all-cash transaction valued at approximately $1.1 billion, net of cash assumed.

What do the SanDisk Corporation Charts Say?

The latest technical chart for SanDisk Corporation shows that shares have trended strongly upward since about February:

A long term performance chart shows that SanDisk Corporation's performance was flat for a couple of years up until 2013 while Western Digital Corp and Seagate Technology PLC have also been rising:

After taking a pause earlier this year, Western Digital Corp is trending higher while Seagate Technology PLC has given a more volatile performance:

What Should Be Your Next Move?

SanDisk Corporation is looking pretty good heading into earnings and there appears to be no black clouds on the immediate horizon. Hence, investors and traders alike might want to take a closer look at the stock before Wednesday.