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: 12.18 million
Three-Month Average Volume: 8.79 million
Volume % Change: 183%
From a technical perspective JD is trending to the upside here with an expansion in its upside volume. This stock attempted to trigger a big breakout trade in early trading on Monday, after shares of JD briefly trended above its all-time high at $36.75. This stock tagged an intraday high of $37.06, before it pulled back to just underneath that level. Traders should now look for a continuation move to the upside in the short-term if JD manages to take out Monday's intraday high of $37.06 with high volume.
Traders should now look for long-biased trades in JD as long as it's trending above Monday's intraday low of $35.77 or above $35 and then once it sustains a move or close above $37.06 with volume that registers near or above 8.79 million shares. If that move gets started soon, then JD will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45.
Recro Pharma(REPH) - Get Report, a clinical stage specialty pharmaceutical company, engages in developing non-opioid therapeutics for the treatment of pain. This stock is trading up 17.4% to $10.89 in Monday's trading session.
Monday's Volume: 128,000
Three-Month Average Volume: 163,545
Volume % Change: 78%
From a technical perspective, REPH is ripping sharply higher here back above its 50-day moving average of $9.73 with above-average volume. This super spike to the upside on Monday has also pushed shares of REPH into breakout territory, since the stock is taking out some key near-term overhead resistance at $10.60. Market players should now look for a continuation move to the upside in the short-term if REPH manages to clear Monday's intraday high of $10.90 with high volume.
Traders should now look for long-biased trades in REPH as long as it's trending above its 50-day at $9.73 and then once it sustains a move or close above $10.90 with volume that registers near or above 163,545 shares. If that move gets started soon, then REPH will set up to re-test or possibly take out its next major overhead resistance levels at $12.42 to $14.
Vasco Data Security International
Vasco Data Security International (VDSI) , together with its subsidiaries, designs, develops, markets, and supports hardware and software security systems that manage and secure access to information assets worldwide. This stock is trading up 4.2% at $29.72 in Monday's trading session.
Monday's Volume: 1.99 million
Three-Month Average Volume: 1.30 million
Volume % Change: 207%
From a technical perspective, Vasco is ripping to the upside here with above-average volume. This stock has been uptrending over the last three months, with shares moving higher from its low of $20.56 to its intraday high on Monday of $30.37. During that uptrend, shares of VDSI have been making mostly higher lows and higher highs, which is bullish technical price action. This move has now started to push shares of Vasco within range of triggering a major breakout trade. That trade will hit if Vasco manages to take out Monday's intraday high of $30.37 and then once it clears its 52-week high of $31.84 with high volume.
Traders should now look for long-biased trades in Vasco as long as it's trending above some near-term support levels at $28 or at $27 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.30 million shares. If that breakout triggers soon, then Vasco will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $35 to $40.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.