3 Stocks in Breakout Territory

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.

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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.

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


Moody's ( MCO) is a provider of credit ratings-, credit- and economic-related research, data and analytical tools, risk management software and quantitative credit risk measures, credit portfolio management solutions and training services. This stock closed up 3.8% at $64.68 in Wednesday's trading session.

Wednesday's Volume: 3.19 million
Three-Month Average Volume: 1.67 million
Volume % Change: 124%

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From a technical perspective, MCO spiked sharply higher here back above its 50-day at $63.14 and into breakout territory above $62.65 with above-average volume. This stock also flirted with some near-term overhead resistance at $65.83, before closing at $64.68. Shares of MCO are now starting to move within range of triggering a major breakout trade. That trade will hit if MCO manages to take out Wednesday's high of $67.05 and then when it clears its 52-week high at $69.70 with high volume.

Traders should now look for long-biased trades in MCO as long as it's trending above its 50-day at $63.14 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.67 million shares. If that breakout hits soon, then MCO will set up to enter new 52-week-high territory above $69.70, which is bullish technical price action. Some possible upside targets off that move are $75 to $77.

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