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.
Envestnet (EVN), together with its subsidiaries, provides wealth management software and services to financial advisors and institutions in the U.S. and internationally. This stock closed up 1.6% at $43.14 in Wednesday's trading session.
Wednesday's Volume: 569,000
Three-Month Average Volume: 275,512
Volume % Change: 100%
From a technical perspective, ENV trended up modestly higher here right off its 50-day moving average of $42.38 with above-average volume. This move is quickly pushing shares of ENV within range of triggering a near-term breakout trade. That trade will hit if ENV manages to take out Wednesday's high of $43.18 to some more near-term overhead resistance levels at $43.72 to $44 with high volume.
Traders should now look for long-biased trades in ENV as long as it's trending above $42 or $41 and then once it sustains a move or close above those breakout levels with volume that hits near or above 275,512 shares. If that breakout materializes soon, then ENV will set up to re-test or possibly take out its 52-week high at $48.54.
OncoGenex Pharmaceuticals (OGXI), a biopharmaceutical company, is developing novel therapeutics that target important mechanisms of treatment resistance in cancer. This stock closed up 6.7% at $12.16 in Wednesday's trading session.
Wednesday's Volume: 373,000
Three-Month Average Volume: 194,335
Volume % Change: 185%
From a technical perspective OGXI spiked sharply higher here right above some near-term support at $11 with above-average volume. This move pushed shares of OGXI into breakout territory, since the stock took out some near-term overhead resistance levels at $11.85 to $12. That move is now pushing shares of OGXI within range of triggering an even bigger breakout trade. That trade will hit if OGXI manages to take out Wednesday's high of $12.25 to its 52-week high at $12.86 with high volume.
Traders should now look for long-biased trades in OGXI as long as it's trending above Wednesday's low of $11.30 and then once it sustains a move or close above those breakout levels with volume that this near or above 194,335 shares. If that breakout hits soon, then OGXI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $13.75 to $15. Any high-volume move above those levels will then put $16 to $17 into range for shares of OGXI.
Ruckus Wireless (RKUS) provides carrier-class Wi-Fi solutions to service providers and enterprises worldwide. This stock closed up 5.7% to $15.29 in Wednesday's trading session.
Wednesday's Volume: 3.20 million
Three-Month Average Volume: 1.22 million
Volume % Change: 187%
From a technical perspective, RKUS ripped sharply higher here right above its 200-day moving average of $14.12 with above-average volume. This move pushed shares of RKUS into breakout territory, since the stock took out some near-term overhead resistance at $15.22. Shares of RKUS are now quickly moving within range of triggering another big breakout trade. That trade will hit if RKUS manages to take out Wednesday's high of $15.49 to some more near-term overhead resistance at $15.55 with high volume.
Traders should now look for long-biased trades in RKUS as long as it's trending above its 50-day at $14.04 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.22 million shares. If that breakout hits soon, then RKUS will set up to re-test or possibly take out its next major overhead resistance levels at $17 to $18.50.
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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