2 Stocks Surging on Unusual Volume

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. 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."

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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.

With that in mind, let's take a look at several stocks rising on unusual volume today.

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Tilly's ( TLYS) is a specialty retailer of West Coast inspired apparel, footwear and accessories. It offers a wide assortment of brands such as Volcom, RVCA, Billabong, LRG, Hurley, FOX, DC etc. This stock is trading up 5.2% at $13.75 in recent trading.

Today's Volume: 202,000

Average Volume: 156,428

Volume % Change: 153%

From a technical perspective, TLYS is bouncing higher here right above some near-term support at $12.50 with above-average volume. This move is quickly pushing TLYS within range of triggering a major breakout trade. That trade will hit if TLYS manages to clear some near-term overhead resistance levels at $13.81 to its 50-day at $14.10 and then once it clears more overhead resistance at $14.32 with high volume.

Traders should now look for long-biased trades in TLYS as long as it's trending above today's low of $13.06, and then once it sustains a move or close above those breakout levels with volume that hits near or above 156,428 shares. If that breakout triggers soon, then TYLS will set up to re-fill its previous gap down zone from last November that started near $16.50.

CF Industries

CF Industries ( CF) is a manufacturer and distributor of nitrogen and phosphate fertilizer products in North America. Its principal products are ammonia, urea, urea ammonium nitrate solution, diammonium phosphate and monoammonium phosphate. This stock is trading up 1% at $219.51 in recent trading.

Today's Volume: 1.35 million

Average Volume: 937,551

Volume % Change: 125%

From a technical perspective, CF is trending higher here well above its 50-day moving average of $206.07 with above-average volume. This move has started to push shares of CF into breakout territory, since the stock has taken out some near-term overhead resistance at $218.50.

Traders should now look for long-biased trades in CF as long as it's trending above today's low of $215.78 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 937,551 shares as bullish. If CF can maintain that trend, then this stock will have a great chance of tagging its next major overhead resistance levels at $225 to $226.04.

To see more stocks rising on unusual volume, check out the Stocks Rising On Unusual Volume 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 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.