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
) is a provider of credit ratings-, credit- and economic-related research, data and analytical tools, risk management software and quantitative credit risk measures, credit portfolio management solutions and training services. This stock closed up 3.8% at $64.68 in Wednesday's trading session.
Wednesday's Volume: 3.19 million
Three-Month Average Volume: 1.67 million
Volume % Change: 124%
From a technical perspective, MCO spiked sharply higher here back above its 50-day at $63.14 and into breakout territory above $62.65 with above-average volume. This stock also flirted with some near-term overhead resistance at $65.83, before closing at $64.68. Shares of MCO are now starting to move within range of triggering a major breakout trade. That trade will hit if MCO manages to take out Wednesday's high of $67.05 and then when it clears its 52-week high at $69.70 with high volume.
Traders should now look for long-biased trades in MCO as long as it's trending above its 50-day at $63.14 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.67 million shares. If that breakout hits soon, then MCO will set up to enter new 52-week-high territory above $69.70, which is bullish technical price action. Some possible upside targets off that move are $75 to $77.
) is an electronic payments provider. This stock closed up 5.4% at $35.75 in Wednesday's trading session.
Wednesday's Volume: 732,000
Three-Month Average Volume: 249,245
Volume % Change: 191%
From a technical perspective, EEFT trended up here right off some near-term support at $34 with above-average volume. This move sent shares of EEFT into breakout and new 52-week-high territory, since the stock took out some near-term overhead resistance at $35.
Traders should now look for long-biased trades in EEFT as long as it's trending above $34 and then once it sustains a move or close above its new 52-week high at $36.14 with volume that's near or above 249,245 shares. If we get that move soon, then EEFT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $38 to $40.
) offers a range of traditional bank loan and deposit products and services to both its commercial and retail customers. This stock closed up 2.5% at $16.38 in Wednesday's trading session.
Wednesday's Volume: 276,000
Three-Month Average Volume: 133,054
Volume % Change: 80%
From a technical perspective, CFNL trended higher here right above its 200-day moving average at $15.80 with above-average volume. This move is quickly pushing shares of CFNL within range of triggering a near-term breakout trade. That trade will hit if CFNL manages to clear some near-term overhead resistance levels at $16.37 to $16.50 with high volume. Shares of CFNL hit an intraday high on Wednesday of $16.41 and volume was well above its three-month average action of 133,054 shares.
Traders should now look for long-biased trades in CFNL as long as it's trending above its 50-day at $15.44 and then once it sustains a move or close above those breakout levels with volume that's near or above 133,054 shares. If that breakout triggers soon, then CFNL will set up to re-test or possibly take out its next major overhead resistance levels at $17.50 to its 52-week high at $18.40. Any high-volume move above $18.40 will then give CFNL a chance to trend north of $20.
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.