3 Stocks Breaking Out on Big 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.

Primoris Services

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Primoris Services ( PRIM) provides services including construction, fabrication, maintenance, replacement, water and wastewater and product engineering services. This stock closed up 3.4% at $25.85 in Monday's trading session.

Monday's Volume: 349,000
Three-Month Average Volume: 203,092
Volume % Change: 69%

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From a technical perspective, PRIM ripped higher here with decent upside volume. This stock recently pulled back right below its 50-day moving average of $23.83 and found some buying interest. Since then, shares of PRIM have been uptrending strong, with the stock moving higher from its low of $22.95 to its intraday high of $26.12. During that move, shares of PRIM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PRIM within range of triggering a near-term breakout trade. That trade will hit if PRIM manages to take out its 52-week high of $26.32 with high volume.

Traders should now look for long-biased trades in PRIM as long as it's trending above Monday's low of $24.70 and then once it sustains a move or close above $26.32 with volume that this near or above 203,092 shares. If that breakout hits soon, then PRIM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $32.

Merit Medical Systems

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Merit Medical Systems ( MMSI) develops, manufactures and distributes proprietary disposable medical devices used in interventional and diagnostic rocedures, particularly in cardiology, radiology and endoscopy. This stock closed up 3.6% at $13.53 in Monday's trading session.

Monday's Volume: 293,000
Three-Month Average Volume: 184,214
Volume % Change: 115%

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From a technical perspective, MMSI ripped sharply higher here right off its 50-day moving average of $13.04 with heavy upside volume. This move is quickly pushing shares of MMSI within range of triggering a major breakout trade. That trade will hit if MMSI manages to take out some near-term overhead resistance at $13.71 to $14.30 with high volume.

Traders should now look for long-biased trades in MMSI as long as it's trending above Monday's low of $12.99 or above its 200-day at $12.30, and then once it sustains a move or close above those breakout levels with volume that's near or above 184,214 shares. If that breakout hits soon, then MMSI will set up to re-test or possibly take out its 52-week high at $15.01. Any high-volume move above $15.01 to $15.37 will then give MMSI a chance to tag $16 to $17.

Netflix

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Netflix ( NFLX) is a provider of Internet subscription allowing users to stream TV shows and movies. This stock closed up 7.8% to $324.36 in Monday's trading session.

Monday's Volume: 6.43 million
Three-Month Average Volume: 3.11 million
Volume % Change: 111%

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From a technical perspective, NFLX ripped sharply higher here right off some near-term support at $300 with heavy upside volume. This stock has been uptrending strong for the last four months, with shares soaring higher from its low of $205.75 to its recent high of $344.50. During that move, shares of NFLX have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NFLX within range of triggering a near-term breakout trade. That trade will hit if NFLX manages to take out Monday's high of $325.27 and then once it clears its 52-week high at $334.50 with high volume.

Traders should now look for long-biased trades in NFLX as long as it's trending above Monday's low of $306 and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.11 million shares. If that breakout hits soon, then NFLX will set up to enter new 52-week-high territory above $334.50, which is bullish technical price action. Some possible upside targets off that breakout are $350 to $375.

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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