5 Stocks Triggering Breakouts on Unusual Volume

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.

Intuitive Surgical

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Intuitive Surgical ( ISRG) designs, manufactures and markets da Vinci Surgical Systems, EndoWrist instruments and surgical accessories. This stock closed up 4.5% to $380.99 in Monday's trading session.

Monday's Volume: 741,000
Three-Month Average Volume: 658,592
Volume % Change: 56%

Shares of ISRG jumped sharply higher on Monday after William Blair said it's time to start accumulating shares of Intuitive Surgical after watching presentations on one of Intuitive's surgical system, da Vinci.

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From a technical perspective, ISRG ripped higher here right above some near-term support at $360 with above-average volume. This stock recently formed a double bottom chart pattern at $357.02 to $358.02. Following that bottom, shares of ISRG have started to rebound strongly and move within range of triggering a near-term breakout trade. That trade will hit if ISRG manages to take out Monday's high of $382.31 to more resistance at $401 with high volume.

Traders should now look for long-biased trades in ISRG as long as it's trending above Monday's low of $362.29 and then once it sustains a move or close above those breakout levels with volume that hits near or above 658,592 shares. If that breakout hits soon, then ISRG will set up to re-fill some of its previous gap down zone from July that started near $430. An even bigger gap down zone sits right above $432.50, so keep that level in mind if ISRG clears it with volume soon.

Galectin Therapeutics

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Galectin Therapeutics ( GALT) offers drug research and development to create new therapies for fibrotic disease and cancer. This stock closed up 9.6% to $12.06 in Monday's trading session.

Monday's Volume: 674,000
Three-Month Average Volume: 222,171
Volume % Change: 149%

Shares of GALT jumped higher on Monday after Ascendiant initiated coverage on the stock with a buy recommendation.

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From a technical perspective, GALT spiked sharply higher here with strong upside volume. This stock has been uptrending for the last three months, with shares ripping higher from its low of $3.95 to its recent high of $13.21. During that move, shares of GALT have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GALT within range of triggering a near-term breakout trade. That trade will hit if GALT manages to take out Monday's high of $12.44 and then once it clears its 52-week high at $13.21 with high volume.

Traders should now look for long-biased trades in GALT as long as it's trending above some near-term support levels at $11 or at $10 and then once it sustains a move or close above those breakout levels with volume that hits near or above 222,171 shares. If that breakout hits soon, then GALT will set up to enter new 52-week-high territory above $13.21, which is bullish technical price action. Some possible upside targets off that breakout are $15 to $16.

Penn National Gaming

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Penn National Gaming ( PENN) is a diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties. This stock closed up 1.4% at $56.13 in Monday's trading session.

Monday's Volume: 1.11 million
Three-Month Average Volume: 824,334
Volume % Change: 73%

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From a technical perspective, PENN jumped modestly higher here right above some near-term support at $54.71 with above-average volume. This move is quickly pushing shares of PENN within range of triggering a breakout trade. That trade will hit if PENN manages to take out some near-term overhead resistance at $57.44 to some past resistance at $58 with high volume.

Traders should now look for long-biased trades in PENN as long as it's trending above Monday's low $55.65 or above more support at $54.71 and then once it sustains a move or close above those breakout levels with volume that this near or above 824,334 shares. If that breakout hits soon, then PENN will set up to re-test or possibly take out its 52-week high at $59.93. Any high-volume move above $59.93 will then give PENN a chance to hit $65.

Kraft Foods Group

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Kraft Foods Group ( KRFT) is a consumer packaged food and beverage company. This stock closed up 1.1% at $53.85 in Monday's trading session.

Monday's Volume: 8.60 million
Three-Month Average Volume: 2.75 million
Volume % Change: 186%

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From a technical perspective, KRFT jumped modestly higher here right above its 200-day moving average of $51.99 with strong upside volume. This move briefly pushed shares of KRFT back above its 50-day moving average at $53.95, before the stock closed just below that level at $53.85. Shares of KRFT are now starting to trend within range of triggering a near-term breakout trade. That trade will hit if KRFT manages to take out Monday's high of $54.36 and then once it clears some near-term overhead resistance at $55.65 with high volume.

Traders should now look for long-biased trades in KRFT as long as it's trending above its 200-day at $51.99 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.75 million shares. If that breakout hits soon, then KRFT will set up to re-test or possibly take out its next major overhead resistance levels at $57.75 to its 52-week high at $58.75.

Men's Wearhouse

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Men's Wearhouse ( MW) is a retailer of men's suits and a provider of tuxedo rental product in the U.S. and Canada. This stock closed up 1.7% at $35.34 in Monday's trading session.

Monday's Volume: 2.74 million
Three-Month Average Volume: 530,638
Volume % Change: 353%

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From a technical perspective, MW bounced modestly higher here right off its 200-day moving average of $34.14 with monster upside volume. This stock recently gapped down sharply from $39 to below $34 with heavy downside volume. Following that move, shares of MW went on to hit a low of $32.46, but the stock has now started to rebound solidly off that low. Shares of MW are now quickly moving within range of triggering a big breakout trade. That trade will hit if MW manages to take out Monday's high of $35.47 and then once it clears its gap down day high of $35.90 with high volume.

Traders should now look for long-biased trades in MW as long as it's trending above its 200-day at $34.14 or above $33.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 530,638 shares. If that breakout hits soon, then MW will set up to re-fill some of its previous gap down zone from September that started at $39.

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

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., 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.

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