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
) supplies process optimization software, which allows manufacturers to implement best practices for optimizing their engineering, manufacturing and supply chains. This stock closed up 1.4% at $37.64 in Wednesday's trading session.
Wednesday's Volume: 637,000
Three-Month Average Volume: 410,726
Volume % Change: 59%
From a technical perspective, AZPN spiked modestly higher here right off some near-term support at $37 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $36 on the downside and $39.02 on the upside. This spike higher on Wednesday is now starting to push shares of AZPN within range of triggering a breakout trade above the upper-end of its recent range. That breakout will hit if AZPN manages to take out some key overhead resistance levels at $38.42 to its 52-week high at $39.02 with high volume.
Traders should now look for long-biased trades in AZPN as long as it's trending above support at $37 or at $36 and then once it sustains a move or close above those breakout levels with volume that's near or above 410,726 shares. If that breakout hits soon, then AZPN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $47.
) designs, develops and sells products and services that provide network infrastructure for networking requirements of service providers, enterprises, governments and research and public sector organizations worldwide. This stock closed up 2.5% to $19.90 in Wednesday's trading session.
Wednesday's Volume: 12.24 million
Three-Month Average Volume: 6.01 million
Volume % Change: 109% P/>
From a technical perspective, JNPR spiked modestly higher here right off its 200-day moving average of $19.52 with above-average volume. This stock has been uptrending for the last month, with shares moving higher from its low of $18.36 to its recent high of $20.11. During that move, shares of JNPR have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of JNPR within range of triggering a near-term breakout trade. That trade will hit if JNPR manages to take out Wednesday's high of $20.01 to more near-term resistance at $20.11 with high volume.
Traders should now look for long-biased trades in JNPR as long as it's trending above its 200-day at $19.52 or above $19 and then once it sustains a move or close above those breakout levels with volume that hits near or above 6.01 million shares. If that breakout hits soon, then JNPR will set up to re-test or possibly take out its next major overhead resistance levels at $22 to its 52-week high at $22.98. Any high-volume move above those levels will then give JNPR a chance to tag $24 to $25.
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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At the time of publication, author had no positions in stocks mentioned. 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.