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
is a homebuilder and a provider of financial services. The company, through its Rialto Investments segment, is an investor in distressed real estate assets. This stock is trading up 3.2% at $32.17 in recent trading.
Today's Volume: 4.5 million
Average Volume: 6.5 million
Volume % Change: 83%
From a technical perspective, LEN is trending higher here with decent volume right off some near-term support at $31.07. This move is quickly pushing LEN within range of triggering a major breakout trade. That trade will hit once LEN takes out some near-term overhead resistance at $32.81 with high volume.
Traders should now look for long-biased trades in LEN as long as it's trending above its 50-day at $29.82, and then once it sustains a move or close above $32.81 with volume that's near or above 6,510,620 shares. If that breakout triggers soon, then LEN will have a great chance of heading north of $35.
Lennar was also featured in "
provides online platforms, services, and tools to help individuals and merchants in online and mobile commerce and payments in the U.S. and internationally. This stock is trading up 3.9% at $47.45 in recent trading.
Today's Volume: 9.4 million
Average Volume: 12.6 million
Volume % Change: 50%
From a technical perspective, EBAY is gapping up strong today with decent volume. This gap has pushed EBAY into new 52-week high territory, after the stock touched $48.08 in earlier trading. At last check, EBAY has pulled back off that 52-week high to $47.45 and volume is tracking in 3 million shares below its three-month average action of 12.6 million shares.
Traders should now look for long-biased trades as long as EBAY is trending above today's low of $46.94 with strong upside volume flows. I would consider any upside volume day that registers near or above 12.6 million shares. If EBAY can hold that trend, then this stock has a great chance of heading north of $50 in the near future. Keep in mind that EBAY could even pull back near more support $45 to $44 and still look bullish.
is a homebuilder and a mortgage-finance company. This stock is trading up 2.7% at $26.38 in recent trading.
Today's Volume: 1.1 million
Average Volume: 1.7 million
Volume % Change: 56%
From a technical perspective, RYL is moving modestly higher here with decent volume. This move is quickly pushing the stock within range of triggering a major breakout trade. That trade will trigger once RYL takes out some near-term overhead resistance levels at $27 to $27.12 with high volume.
Traders should now look for long-biased trades in RYL as long as it's trending above its 50-day at $24.81, and then once it sustains a move or close above those breakout levels with volume that's near or above 1,697,160 shares. If that breakout triggers soon, then RYL has a solid chance of trending north of $30 in the near future. Keep in mind that those breakout levels are an area the stock formed a double top at back in July, so it would be bullish technical action to see them get taken out with volume soon.
To see more stocks rising on unusual volume, 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.