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.
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.
Kandi Technologies Group (KNDI) - Get Kandi Technologies Group, Inc. Report, through its subsidiaries, engages in the design, development, manufacture and commercialization of various vehicles. This stock closed up 16.4% to $15.56 in Monday's trading session.
Monday's Volume: 8.72 million
Three-Month Average Volume: 2.14 million
Volume % Change: 259%
From a technical perspective, KNDI skyrocketed sharply higher here and broke out into new 52-week-high territory after the stock took out some near-term overhead resistance levels at $14.75 to $15.39 with monster upside volume. Traders should now look for a continuation move to the upside in the short-term if KNDI manages to take out Monday's high of $15.80 with strong volume.
Traders should now look for long-biased trades in KNDI as long as it's trending above $14.75 or above $14 and then once it sustains a move or close above $15.80 with volume that hits near or above 2.14 million shares. If that move materializes soon, then KNDI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $19 to $20.
Scorpio Tankers (STNG) - Get Scorpio Tankers Inc. Report, together with its subsidiaries, provides seaborne transportation of refined petroleum products and crude oil worldwide. This stock closed up 7.9% to $10.17 in Monday's trading session.
Monday's Volume: 3.53 million
Three-Month Average Volume: 1.22 million
Volume % Change: 212%
From a technical perspective, STNG soared sharply higher here right above some near-term support at $9 with heavy upside volume. This move pushed shares of STNG into breakout territory, since the stock took out some near-term overhead resistance at $9.87. This move also briefly pushed shares of STNG back above its 200-day moving average of $10.19, before the stock closed just below that level at $10.17. Traders should now look for a continuation move higher in the short-term if STNG manages to take out Monday's high of $10.29 with high volume.
Traders should now look for long-biased trades in STNG as long as it's trending above $9.75 or above Monday's low of $9.30 and then once it sustains a move or close above $10.29 with volume that hits near or above 1.22 million shares. If we get that move soon, then STNG will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $10.75 to $11.50. Any high-volume move above those levels will then give STNG a chance to tag $12 to $12.50.
Infoblox (BLOX) develops, markets and sells automated network control solutions worldwide. This stock closed up 5.9% to $22.63 in Monday's trading session.
Monday's Volume: 3.18 million
Three-Month Average Volume: 1.94 million
Volume % Change: 209%
From a technical perspective, BLOX ripped higher here into its previous gap-down-day zone with strong upside volume. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $17.10 to its intraday high of $22.82. During that uptrend, shares of BLOX have been consistently making higher lows and higher highs, which is bullish technical price action. This uptrend is coming after shares of BLOX recently gapped down sharply from over $32 to $17.10 with monster downside volume.
Traders should now look for long-biased trades in BLOX as long as it's trending above $20 and then once it sustains a move or close above Monday's high of $22.82 with volume that's near or above 1.94 million shares. If that move materializes soon, then BLOX will set up to re-fill more of its previous gap-down-day zone that started just above $32.50. Some possible upside targets if this gap continues to get filled with volume is $25 to $28.
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.