WINDERMERE, Fla. (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. Many times when above-average volume moves into 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 a
( INHX) is a biopharmaceutical company focused on the development of differentiated anti-infective products to prevent or treat serious infections.
Yesterday's Volume: 9,232,900
Average Volume: 1,886,810
Volume % Change: 402%
This stock is soared yesterday after the company said it plans to expand studies for its experimental hepatitis C drug. The company said it will ask the FDA for authorization to expand a mid-stage trail of its drug INX-189.
, this stock started to break out on monster volume above some past overhead resistance at $11.98, which is very bullish. The only problem here is that INHX has run up huge from its October low of $2.29, which could indicate it has run too far too fast.
The stock is acting very strong in terms of price action and volume patterns, but shares are now hitting some extreme overbought readings with its relative strength index (RSI) at 82. I would wait for a significant pullback before going long this stock.
Inhibitex shows up on a recent list of
is a biopharmaceutical company engaged in developing therapies that target the molecular mechanisms that cause cancer.
Yesterday's Volume: 4,073,900
Average Volume: 1,278,280
Volume % Change: 211%
This stock added yesterday to its large gains from Monday of 14% as shares continue to attract buyers off optimism the company may be sold. A
article mentioned that two people with knowledge of the matter said that the company is exploring options including a possible sale.
, this stock is running into some
at $45.90 to $46.07, where the sellers are overwhelming the buyers.
Despite the strong moves in this stock the last two trading sessions, I would not get interested from the long side until it can manage to take those resistance levels out with volume. This feels more like a case of sell-the-rumor than buy-the-rumor since the stock ran right into resistance.
I would only change my mind if ONXX can manage to sustain a
and close above $46.07 in the near future.
( TLEO) provides on-demand talent management solutions that enable organizations of all sizes to assess, acquire, develop, compensate and align their workforces for improved business performance.
Today's Volume: 914,100
Average Volume: 449,598
Volume % Change: 130%
This stock moved noticeably higher yesterday on high volume after the company said Colas Group, one of the world leaders in road construction, has chosen its Taleo Recruiting solution to power its worldwide recruitment efforts.
From a technical standpoint, this stock has started to trend back above its 50-day
of $29.89 on high volume, which is very bullish.
Traders should now watch for TLEO to trigger another breakout trade if it can manage to sustain a move and close above its 200-day moving average oat $32.01 on high volume. Look for volume that's tracking in close to or above its three-month average action of 449,598 shares. If we get that move over the 200-day, then look for this stock to re-test its next significant overhead resistance level at $35.14.
Taleo shows up on a list of
is engaged in gold mining, exploration and related activities.
Yesterday's Volume: 1,328,600
Average Volume: 787,341
Volume % Change: 60%
This gold mining stock jumped sharply Tuesday after Investec Securities upgraded the stock to a buy from hold rating. The firm told clients to use any declines in share prices as a buying opportunity.
Market players should now watch for a sustained move and close above its 50-day moving average $106.34 on volume that's close to or well above its three-month average action of 787,341 shares. If we get that action soon, then look for this stock to continue to trend higher back toward $110.
Rangold shows up on a recent list of
is a biopharmaceutical company. The company is engaged in developing therapies for the treatment of cancer and inflammatory diseases.
Yesterday's Volume: 293,400
Average Volume: 151,305
Volume % Change: 55%
From a technical standpoint, this stock is very close to
if it can manage to sustain a move and close above its 200-day moving average of $10.60 on volume that's close to or above its three-month average action of 151,305 shares. If we see that action, then traders should watch for ECYT to trend back toward $12 to $13.50.
To see more stocks rising on unusual volume, including
Madison Square Garden
, check out the
portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.