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3 Stocks Triggering Breakouts on Big Volume

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.

>>5 Big Charts Ready to Break Out in May

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 Stocks Insiders Love Right Now

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

Omnicom Group

Omnicom Group (OMC), together with its subsidiaries, operates as an advertising, marketing and corporate communications services company in the Americas, Europe, the Middle East, Africa and the Asia pacific. This stock closed up 2.2% to $67.66 in Friday's trading session.

Friday's Volume: 12.28 million
Three-Month Average Volume: 1.81 million
Volume % Change: 670%

From a technical perspective, OMC ripped sharply higher here right above its recent low of $65.43 with heavy upside volume. This stock has been downtrending badly for the last two months, with shares moving lower from its high of $76.69 to its low of $65.43. During that move, shares of OMC have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of OMC are now starting to rebound off $65.43 with volume and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if OMC manages to take out its 200-day moving average of $68.41 with volume.

Traders should now look for long-biased trades in OMC as long as it's trending above that recent low of $65.43 and then once it sustains a move or close above its 200-day at $68.41 with volume that hits near or above 1.81 million shares. If that breakout hits soon, the OMC will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $70.87 or at $72 to $74.

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