4 Big-Volume Stocks to Trade for Breakouts

These stocks rising on unusual volume are within range of triggering breakout trades.
By Roberto Pedone ,

 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.

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.

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

Monday's Volume: 1.07 million
Three-Month Average Volume: 965,233
Volume % Change: 96%

From a technical perspective, VSLR is spiking sharply higher here with above-average volume. This stock recently gapped sharply higher here from just above $8 to over $11 with strong upside volume. Following that move, shares of VSLR have pulled back to Monday's intraday low of $10.34, and the stock has subsequently started to bounce higher and move within range of triggering a big breakout trade. That trade will hit if VSLR manages to clear Monday's intraday high of $11.35 and then once it takes out its gap-up-day high of $11.80 with high volume.

Traders should now look for long-biased trades in VSLR as long as it's trending above Monday's intraday low of $10.34 and then once it sustains a move or close above those breakout levels with volume that hits near or above 965,233 shares. If that breakout gets started soon, then VSLR will set up to re-test or possibly take out its next major overhead resistance levels at $13 to $15.

Habit Restaurants

Habit Restaurants (HABT) - Get Report focuses on operating fast casual restaurants under The Habit Burger Grill name in the U.S. This stock is trading up 5.1% to $34.81 in Monday's trading session.

Monday's Volume: 478,000
Three-Month Average Volume: 492,657
Volume % Change: 185%

From a technical perspective, HABT is ripping higher here right above its 50-day moving average of $31.84 with decent upside volume flows. This spike to the upside on Monday has now pushed shares of HABT into breakout territory, since the stock has flirted with or taken out some near-term overhead resistance levels at $34 to $34.45 a share. Market players should now watch shares of HABT for a much bigger breakout trade to trigger if this stock manages to clear some more key overhead resistance levels at $35.56 to $36 with high volume.

Traders should now look for long-biased trades in HABT as long as it's trending above Monday's intraday low of $33.22 or above its 50-day at $31.84 and then once it sustains a move or close above those breakout levels with volume that hits near or above 492,657 shares. If that breakout begins soon, then HABT will set up to re-test or possibly take out its next major overhead resistance level at its all-time high of $44.20.

Adeptus Health

Adeptus Health (ADPT) - Get Report owns and operates a network of independent freestanding emergency rooms in the U.S. This stock is trading up 3.6% to $44.94 in Monday's trading session.

Monday's Volume: 44,000
Three-Month Average Volume: 101,057
Volume % Change: 50%

From a technical perspective, ADPT is spiking higher here right above some near-term support at $41.81 with decent upside volume flows. This stock has been uptrending strong over the last month and change, with shares moving higher from its low of $30.12 to its recent high of $46.42. During that uptrend, shares of ADPT have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ADPT within range of triggering a big breakout trade above some key near-term overhead resistance levels. That trade will hit if shares of ADPT manage to take out its all-time high of $46.42 with high volume.

Traders should now look for long-biased trades in ADPT as long as it's trending above some near-term support levels at $41.81 or above $40 and then once it sustains a move or close above its 52-week high of $46.52 with volume that hits near or above 101,057 shares. If that breakout kicks off soon, then ADPT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $50 to $55 or even $60.

58.com

58.com (WUBA) - Get Report operates online marketplace for local merchants and consumers in the People's Republic of China. This stock is trading up 7% at $44.65 in Monday's trading session.

Monday's Volume: 1.04 million
Three-Month Average Volume: 585,152
Volume % Change: 211%

From a technical perspective, WUBA is gapping up sharply higher here back above its 200-day moving average of $43.05 with strong upside volume flows. This big gap to the upside on Monday has briefly pushed shares of WUBA into breakout territory, since this stock has flirted with some key near-term overhead resistance at $45. Market players should now look for a continuation move higher in the short-term if WUBA can manage to take out Monday's intraday high of $45.48 with strong volume.

Traders should now look for long-biased trades in WUBA as long as it's trending above Monday's intraday low of $43.62 or above its 200-day at $43.05 and then once it sustains a move or close above Monday's intraday high of $45.48 with volume that hits near or above 585,152 shares. If that move gets underway soon, then WUBA will set up to re-test or possibly take out its next major overhead resistance levels at $49.75 to $55.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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