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: 411,000
Three-Month Average Volume: 176,603
Volume % Change: 132%
From a technical perspective, BBW jumped sharply higher here right above its recent breakout levels of $12.54 with above-average volume. This stock recently pulled back from $12.54 to test its 200-day moving average twice, before starting a new uptrend that pushed shares back above its 50-day moving average. This surge to the upside on Monday is now quickly pushing shares of BBW within range of triggering a near-term breakout trade. That trade will hit if BBW manages to take out Monday's intraday high of $13.50 to some more key overhead resistance at $13.89 with high volume.
Traders should now look for long-biased trades in BBW as long as it's trending above $12.54 or above its 50-day at $12.16 and then once it sustains a move or close above those breakout levels with volume that this near or above 176,603 shares. If that breakout starts soon, then BBW will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $15.43.
ChinaCache International (CCIH) , through its subsidiaries, provides content and application delivery services in the People's Republic of China. This stock closed up 4.2% at $16.31 in Monday's trading session.
Monday's Volume: 586,000
Three-Month Average Volume: 343,128
Volume % Change: 55%
From a technical perspective, CCIH spiked sharply higher here with above-average volume. This uptick on Monday briefly pushed shares of CCIH into breakout territory, since the stock flirted with some near-term overhead resistance at $16.79. Shares of CCIH tagged an intraday high of $17.17, before closing well off that level at $16.31. This move is now starting to push shares of CCIH within range of triggering a much bigger breakout trade. That trade will hit if CCIH manages to take out Monday's intraday high of $17.17 and then once it clears more key resistance levels at $17.50 to $18.16 with high volume.
Traders should now look for long-biased trades in CCIH as long as it's trending above $15 or above its 50-day moving average at $14.11 and then once it sustains a move or close above those breakout levels with volume that hits near or above 343,128 shares. If that breakout gets underway soon, then CCIH will set up to re-test or possibly take out its next major overhead resistance levels at $20.35 to $22, or even $23.50.
DirecTV (DTV) provides digital television entertainment services in the U.S. and Latin America. This stock closed up 1% at $85.47 in Monday's trading session.
Monday's Volume: 6.87 million
Three-Month Average Volume: 3.23 million
Volume % Change: 158%
From a technical perspective, DTV spiked modestly higher here back above its 50-day moving average of $85.31 with above-average volume. This stock has been uptrending a bit for the last month, with shares moving higher from its low of $83.14 to its intraday high of $85.96. During that move, shares of DTV have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if DTV manages to take out Monday's intraday high of $85.96 to $87 with high volume.
Traders should now look for long-biased trades in DTV as long as it's trending above some key near-term support at $84 or at $83.14 and then once it sustains a move or close above $85.96 to $87 with volume that's near or above 3.23 million shares. If that move gets underway soon, then DTV will set up to re-test or possibly take out its next major overhead resistance levels at $88.25 to its 52-week high at $89.46. Any high-volume move above $89.46 to $90 will then give DTV a chance to trend well north of $90.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume 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 CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.