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.
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.
JA Solar (JASO), through its subsidiaries, engages in the design, development, production, marketing and sale of solar power products based on crystalline silicon technologies. This stock closed up 8.2% to $11.42 in Friday's trading session.
Friday's Volume: 6.41 million
Three-Month Average Volume: 2.48 million
Volume % Change: 250%
From a technical perspective, JASO spiked sharply higher here with strong upside volume. This stock has been uptrending for the last month and change, with shares moving higher from its low of $8.35 to its recent high of $11.55. During that uptrend, shares of JASO have been consistently making higher lows and higher highs, which is bullish technical price action. This spike on Friday is quickly pushing shares of JASO within range of triggering a big breakout trade. That trade will hit if JASO manages to take out some near-term overhead resistance at $11.55 with high volume.
Traders should now look for long-biased trades in JASO as long as it's trending above Friday's low of $10.75 or above more near-term support at $10.21 and then once it sustains a move or close above $11.55 with volume that hits near or above 2.48 million shares. If that breakout hits soon, then JASO will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $12.80 to $15.
LivePerson (LPSN) provides digital engagement solutions that facilitate real-time assistance and expert advice in the U.S., Canada, Latin America, Europe and the Asia-Pacific region. This stock closed up 5.3% at $12.20 in Friday's trading session.
Friday's Volume: 1.59 million
Three-Month Average Volume: 416,061
Volume % Change: 322%
From a technical perspective, LPSN trended higher here right above some near-term support at $11.34 with above-average volume. This stock has been downtrending over the last month, with shares moving lower from its high of $13.90 to its recent low of $11.34. During that move, shares of LPSN have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this spike higher on Friday could be signaling a trend change is in the cards for shares of LPSN.
Traders should now look for long-biased trades in LPSN as long as it's trending above Friday's low of $11.67 or above more support at $11.34 or above more support at $44 and then once it sustains a move or close above Friday's high of $12.30 to $12.75 with volume that's near or above 416,061 shares. If we get that move soon, then LPSN will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $13.59 to $14, or even $14.42.
Insmed (INSM), a biopharmaceutical company, focuses on developing and commercializing inhaled therapies for patients with serious lung diseases. This stock closed up 1.4% at $19.18 in Friday's trading session.
Friday's Volume: 981,000
Three-Month Average Volume: 455,434
Volume % Change: 95%
From a technical perspective, INSM spiked modestly higher here back above its 50-day moving average of $19.17 with above-average volume. Market players should now look for a continuation move higher in the short-term if INSM manages to take out Friday's high of $19.42 with high volume.
Traders should now look for long-biased trades in INSM as long as it's trending above $18 or $17 and then once it sustains a move or close above $19.42 with volume that's near or above 455,434 shares. If that move gets underway soon, then, INSM will set up to re-test or possibly take out its next major overhead resistance levels at $21.15 to its 52-week high at $22.29.
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.