WINDERMERE, Fla. (Stockpickr) -- Professional traders who run 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."
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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.
Let's take a look at a
They are all recording volume in midday trading that is already at least 50% above their average trading volume for a full day.
This company and its subsidiaries, doing business as 1-800-PetMeds, is a pet pharmacy. The stock is trading up 13.4% at $12.82 in recent trading.
Today's Volume: 1,113,000
Average Volume: 222,400
Volume % Change: 1203%
Shares of PETS are ripping today after the company reported better-than-expected quarterly profits due to strong online sales for animal medicine.
From a technical standpoint, PETS has started to break out today above some past overhead resistance at $12.18 on monster volume. Market players should now watch for PETS to close near its daily highs and above $12.18, to $13 a share, to signal it wants to trend much higher.
If we get that action, traders should look for long-biased trades back toward the next significant overhead resistance levels at $14 to $16. Keep in mind that the relative strength index is now 86, an extremely overbought reading.
This company is a specialty retailer of casual home furnishings and entertainment products in the U.S. The stock is trading up 6.4%, at $12.82, in recent trading.
Today's Volume: 346,000
Average Volume: 165,716
Volume % Change: 310%
Shares of CPWM are jumping higher today after BB&T upgraded the stock to buy from hold and slapped a $15 price target on the stock. The firm cited what it sees as several growth opportunities for the main reason for the upgrade.
From a technical standpoint, CPWM is flirting with a major breakout today, now that the stock is bumping up against some past overhead resistance at $12.88 on heavy volume. Market players should now watch for a close on CPWM above $12.88 and near the daily highs to signal that this stock wants to trend higher. Traders should look for long biased trades, if CPWM can sustain a high-volume move and close above $12.88 either today, or in the near future.
This company designs, develops and markets analog and mixed-signal power management semiconductors for the computing, storage, networking and consumer markets. The stock is trading up 1.7% at $29.21 in recent trading.
Today's Volume: 339,000
Average Volume: 229,840
Volume % Change: 289%
From a technical standpoint, VLTR is getting very close to triggering a big breakout trade, if this stock can manage to sustain a high-volume move and close above some past overhead resistance at $29.93. At last check, the volume today is already well above the average action, so traders should watch for that close over $29.93. If we get that close either today or in the near future, I would look for long biased trades, since it will mean that VLTR is trading in all-time high territory.
Altisource Portfolio Solutions
This company, together with its subsidiaries, is a provider of services focused on high value, knowledge-based functions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management. This stock is trading up 3.5% at $52.41 in recent trading.
Today's Volume: 140,000
Average Volume: 122,782
Volume % Change: 145%
From a technical standpoint, ASPS has started to trigger a big breakout trade today, now that the stock has moved above some near-term overhead resistance at $51.32 on decent volume. Market players should now watch for a sustained high-volume move and close over $51.32 to signal that ASPS wants to continue its trend higher. Keep in mind that ASPS has entered all-time high territory on this breakout, so look for long-biased trades as long as ASPS can stay above $51.32.
This company is a provider of Internet-based postage solutions. This stock is trading up 3.4% at $31.32 in recent trading.
Today's Volume: 400,000
Average Volume: 436,237
Volume % Change: 120%
From a technical standpoint, STMP has started to trigger a big breakout trade now that this stock has started to move above some near-term overhead resistance at $30.18 to $30.33, on decent volume. If this breakout in STMP can hold into the close today, market players should look for the stock to make a run at its next significant overhead resistance level of $33.73. Traders should look for long-biased trades in STMP as long as it closes near its daily highs today. If we get that action, I would look to play that breakout over $33.73, if we get it with volume. Look for volume that's near or well above 436,237 shares.
Carrizo Oil & Gas
This is an independent energy company. Carrizo, together with its subsidiaries, is engaged in the exploration, development and production of oil and gas in the U.S. and U.K. This stock is trading up 3.9% at $24.00 in recent trading.
Today's Volume: 984,000
Average Volume: 1,163,130
Volume % Change: 71%
From a technical standpoint, CRZO is finding some buying interest today, right around the same levels that traders have supported the stock since mid-October. That level is around $24 to $22, and it's held up as major support so far. Traders should now watch for CRZO to close back above its 50-day moving average of $26.57 to signal that this stock wants to make a run at $29 to $31.06 (200-day). Market players should now look for long-biased trades, once $26.57 is taken out with volume. Look for volume that's near or well above 1,163,130 shares.
This is a drug discovery and development company, focused on developing small molecule drugs to treat serious unmet medical needs. This stock is trading up 3.7% at $17.92 in recent trading.
Today's Volume: 1,743,000
Average Volume: 2,015,130
Volume % Change: 58%
From a technical standpoint, INCY is continuing its uptrend above the recent breakout that triggered over $16.50 to $16.75. As long as INCY can continue to trend above those levels, this stock has an excellent chance of trading back toward its July resistance level near $20.36. Market players should continue to look for long-biased trades in INCY if this stock can close near its daily high of $18.28, and if volume can finish above 2,015,130 shares.
This company is a real estate information marketplace. Zillow provides information about homes, real estate listings and mortgages, through its Web site and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals. This stock is trading up 2.8% at $28.63 in recent trading.
Today's Volume: 240,000
Average Volume: 135,121
Volume % Change: 206%
From a technical standpoint, Z has started to flirt with a major breakout trade today, now that the stock has moved above some near-term overhead resistance at $28.24 on strong volume. Market players should now watch for a sustained high-volume move and close over $28.24 and $30 to signal that the stock wants to trend back toward $32 to $33.50. Traders should look for long-biased trades as long as Z remains above $28.24 and it continues to close near its daily highs.
To see more stocks rising on unusual volume like
, check out the
portfolio on Stockpickr.
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.