Turn Up the Volume With These Winners

The overall action in the stock market has been a lot healthier following a strong day of gains than at any other time since the November selloff.

However, the same problem exists that existed when the rally started: Volume is lame and well below the average of the past 50 days. History has proved over and over that for a stock market to have a prolonged bull market, the rally must be driven by volume.

Without volume, it is nothing but a rally based on hope of the retail crowd, which doesn't move the market for long. I prefer to follow the elephants, not the public masses. Therefore let's look at some stocks that are receiving some elephant following in a market being moved by mice.

Koppers

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Source: TeleChart Gold

If Koppers (KOP - commentary - Cramer's Take) can break out here or pull back to the 50-day moving average on low volume then bounce on heavy volume, I would love to add to my existing position in this leading chemicals-specialty stock.

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Massey Energy

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Source: TeleChart Gold

If Massey Energy (MEE - commentary - Cramer's Take) can pull back to the pivot point or 50-day moving average on low volume and then bounce on heavy volume, I would love to get long this leading energy/coal stock.

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Fastenal

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Source: TeleChart Gold

Fastenal (FAST - commentary - Cramer's Take) needs to move sideways or drift lower on low volume for at least a couple of weeks and then either break out to a new high or bounce off the 50-day moving average on heavy volume before I can get long this retail/wholesale-building-products stock.

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Grupo Aeroportuario del Sureste

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Source: TeleChart Gold

If Grupo Aeroportuario del Sureste (ASR - commentary - Cramer's Take) can move sideways or drift lower for a couple of weeks and then bounce or break out on heavier volume, I would like to get long this leading real estate operations stock.

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LKQ Corp.

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Source: TeleChart Gold

LKQ Corp. (LKQX - commentary - Cramer's Take) is bouncing right off the 50-day moving average and is at an excellent place to add to my current long position in this leading auto/truck-replacement-parts stock.

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Jinpan

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Source: TeleChart Gold

Jinpan (JST - commentary - Cramer's Take) is following through on the breakout from four days ago on heavy volume. If the stock can pull back on low volume to the pivot point area and bounce on heavy volume, I would love to add more to my position in this leading electrical-equipment stock.

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Graham Corp.

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Source: TeleChart Gold

If Graham Corp. (GHM - commentary - Cramer's Take) can move sideways, then break out to a new all-time high, on heavier volume, I would like to go long this leading machinery-general industries stock.

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Exco

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Source: TeleChart Gold

If Exco (XCO - commentary - Cramer's Take) can pull back to the pivot point or 50-day moving average on low volume and then bounce on heavier volume, I would love to get long this leading oil and gas exploration stock.

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Gencor

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Source: TeleChart Gold

If Gencor (GENC - commentary - Cramer's Take) can break out from the symmetrical triangle on higher volume or pull back to the 50-day moving average then bounce on heavier volume, I would love to add to my existing position in this leading machinery/general industrial stock.

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Schnitzer Steel

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Source: TeleChart Gold

If Schnitzer Steel (SCHN - commentary - Cramer's Take) can pull back to the pivot point area or 50-day moving average on lower volume and then bounce on heavier volume, I would like to get long this leading metal-fabrication stock.

Remember, if my setup does not work and the pattern fails, I will sell all with a close below the 50-day moving average.

Obviously, there are a lot of stocks that are starting to look a lot better. The only problem in the long term is that these stocks are all in long-term cyclical bullish sectors and not necessarily new, exciting, innovative industries that are changing the U.S. and the world forever.

However, in this market, the leaders now are the same stocks we have seen lead before. Some of these names are new, but most of these are familiar names to growth investors.

Enjoy the rally, but until we see more above-average volume show up in the NYSE and Nasdaq, don't fall in love with the rally.

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Please note that due to factors including low market capitalization and/or insufficient public float, we consider Jinpan, Graham Corp. and Gencor to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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At time of publication, Hayes was long Koppers, LKQ Corp., Jinpan and Gencor.

Joshua "MauiTrader" Hayes is CEO, president and founder of Big Wave Trading LLC, a Maui, Hawaii-based stock market advisory service. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Hayes appreciates your feedback; click here to send him an email.