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 an online retailer of diamonds and jewelry. This stock closed up 1.2% to $39.99 in Monday's trading session.
Monday's Volume: 380,000
Three-Month Average Volume: 110,185
Volume % Change: 246%
From a technical perspective, NILE trended modestly higher here right above its 50-day moving average of $38.46 with strong upside volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $36.56 to its intraday high of $40.20. During that move, shares of NILE have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in NILE as long as it's trending above its 50-day at $38.46 or above $38 and then once it sustains a move or close above Monday's high at $40.20 with volume that hits near or above 110,185 shares. If we get that move soon, then NILE will set up to re-test or possibly take out its next major overhead resistance levels at $42.34 to $43, or even $43.50 to $45.
), through its operating subsidiaries, acquires, develops, licenses and enforces patented technologies. This stock closed up 3.6% at $16.05 in Monday's trading session.
Monday's Volume: 1.83 million
Three-Month Average Volume: 669,894
Volume % Change: 233%
From a technical perspective, ACTG bounced higher here right above its recent low of $14.86 with heavy upside volume. This stock recently gapped down sharply from over $20 to that $14.86 low with massive downside volume. Following that gap down, shares of ACTG have now started to rebound and trend back above its gap down day high of $15.75. That move is also coming off oversold levels, since the current relative strength index reading for ACTG is 21.81.
Traders should now look for long-biased trades in ACTG as long as it's trending above Monday's low of $15.27 or above that recent low of $14.86 and then once it sustains a move or close above Monday's high of $16.11 with volume that hits near or above 669,894 shares. If we get that move soon, then ACTG will set up to re-fill some more of its previous gap down zone that started just over $20. Some possible upside targets if ACTG gets into that gap with volume are $18 to $19.
) acquires and develops various oil and gas properties in the U.S. This stock closed up 4.6% at $28.69 in Monday's trading session.
Monday's Volume: 2.89 million
Three-Month Average Volume: 1.91 million
Volume % Change: 115%
From a technical perspective, LINE surged higher here and broke out above some near-term overhead resistance at $28.49 with above-average volume. This stock has found buying interest over the last month at around $25 to $26. Following that action, shares of LINE have now started to uptrend and move within range of filling some of its previous gap down zone from July that started just above $32.
Traders should now look for long-biased trades in LINE as long as it's trending above Monday's low of $27.75 or above $26 and then once it sustains a move or close above Monday's high of $28.85 to its gap down day high near $29 with volume that hits near or above 1.91 million shares. If we get that move soon, then LINE will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $31.05 to $33.50.
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.