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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. Often when above-average volume moves into an equity, it precedes a large spike in volatility.
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.
>>5 "Magic Formula" Stocks for 2013
With that in mind, let's take a look at
several stocks rising on unusual volume today.Coinstar(CSTR) =
This is a provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. This stock is trading up 3.4% at $52.54 in recent trading.
Today's Volume: 1.96 million
Average Volume: 1.15 million
Volume % Change: 248%
Shares of CSTR are moving higher today after Northland upgraded the stock to outperform from market perform, saying that RedBox rental trends are improving significantly from summer lows. The firm set a price target of $62 per share.
From a technical perspective, CSTR is gapping higher here right off some near-term support at $50 with above-average volume. This move is quickly pushing CSTR within range of triggering a major breakout trade. That trade will hit once CSTR manages to take out some key overhead resistance levels at $53.75 to its 200-day moving average at $55.73 with high volume. At last check, CSTR has hit an intraday high of $54.16 and volume is well above its three-month average action of 1.15 million shares.
Traders should now look for long-biased trades in CSTR as long as it's trending above $50, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.15 million shares. If that breakout triggers soon, then CSTR will set up to re-fill some of its previous gap down zone from July that started above $60.