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
-- 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
Energy Transfer Equity
Energy Transfer Equity
) owns and operates natural gas gathering systems, natural gas intrastate pipeline systems and gas processing plants. This stock closed up 1.8% at $66.21 in Wednesday's trading session.
Wednesday's Volume: 4.58 million
Three-Month Average Volume: 1.28 million
Volume % Change: 321%
From a technical perspective, ETE spiked higher here right off some near-term support at $63.90 with heavy upside volume. This move pushed shares of ETE into new 52-week high territory, since the stock took out some resistance at $66.97. At last check, ETE hit an intraday high of $67.90 with volume that was substantially above its three-month average action of 1.28 million shares.
Traders should now look for long-biased trades in ETE as long as it's trending above support at $63.90 or above more support at $62 and then once it sustains a move or close above its new 52-week high at $67.90 with volume that's near or above 1.28 million shares. If we get that move soon, then ETE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $70 to $75.
) is a global energy company, which is a supplier of low enriched uranium for commercial nuclear power plants. This stock closed up 3.9% at $18.31 in Wednesday's trading session.
Wednesday's Volume: 1.02 million
Three-Month Average Volume: 512,580
Volume % Change: 172%
From a technical perspective, USU bounced sharply higher here right above some near-term support at $16.11 with strong upside volume. This stock recently pulled back sharply from $29.12 to $15.05 with heavy downside volume flows. Following that pullback, shares of USU have started to stabilize and trend sideways between $15.05 on the downside and $21.36 on the upside. This move is now starting to push shares of USU within range of triggering a near-term breakout trade. That trade will hit if USU manages to clear some near-term overhead resistance levels at $20 to $21.36 with high volume.
Traders should now look for long-biased trades in USU as long as it's trending above $15.05 and then once it sustains a move or close above those breakout levels with volume that's near or above 512,580 shares. If that breakout hits soon, then USU will set up to re-test or possibly take out it next major overhead resistance levels at $28 to $29. A more measured move to $24 or $25 might be all we get if that breakout triggers, so adjust accordingly to what the stock gives you.
To see more stocks rising on unusual volume, check out the
portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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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
. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.