3 Big-Volume 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.

>>Chart Smarts: Trade These 5 Big Stocks for Gains in April

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.

>>5 Stocks Poised for Breakouts

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

Aruba Networks

Aruba Networks (ARUN) provides enterprise mobility solutions worldwide. This stock closed up 4.2% to $19.59 in Friday's trading session.

Friday's Volume: 4.34 million
Three-Month Average Volume: 2.15 million
Volume % Change: 118%

From a technical perspective, ARUN spiked sharply higher here right above its 200-day moving average of $18.35 with above-average volume. This spike is starting to push shares of ARUN within range of triggering a near-term breakout trade. That trade will hit if ARUN manages to take out its 50-day moving average of $20.13 and then once it clears more near-term overhead resistance at $20.46 with high volume.

Traders should now look for long-biased trades in ARUN as long as it's trending above its 200-day at $18.35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.15 million shares. If that breakout materializes soon, the ARUN will set up to re-test or possibly take out its next major overhead resistance levels at $22.10 to its 52-week high at $23.85.

Osiris Therapeutics

Osiris Therapeutics (OSIR), a stem cell company, focuses on the development and marketing products to treat medical conditions in wound care, orthopedic and sports medicine markets. This stock closed up 3% to $13.69 in Friday's trading session.

Friday's Volume: 371,000
Three-Month Average Volume: 243,406
Volume % Change: 60%

From a technical perspective, OSIR bounced notably higher here right above some near-term support at $12.77 with above-average volume. This stock has been downtrending badly for the last month, with shares sliding lower from its high of $17.60 to it recent low of $12.77. During that move, shares of OSIR have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of OSIR are now starting to rebound off that $12.17 low and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if OSIR manages to take out some near-term overhead resistance levels at $13.91 to $14.50 with high volume.

Traders should now look for long-biased trades in OSIR as long as it's trending above support at $12.77 and then once it sustains a move or close above those breakout levels with volume that hits near or above 243,406 shares. If that breakout gets underway soon, then OSIR will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day of $15.08 to its 200-day at $15.23. Any high-volume move above those levels will then give OSIR a chance to tag $16.50 to $17.50.

CNOOC

CNOOC (CEO), an investment holding company, explores for, develops, produces and sells oil and natural gas. This stock closed up 2.1% to $155.68 in Friday's trading session.

Friday's Volume: 427,000
Three-Month Average Volume: 202,576
Volume % Change: 149%

From a technical perspective, CEO trended notably higher here right above some near-term support at $150.01 with above-average volume. This stock recently formed a double bottom chart pattern at $147.88 to $147.24. Following that bottom, shares of CEO have started to uptrend and move within range of triggering a near-term breakout trade. That trade will hit if CEO manages to take out Friday's high of $157.92 to some more near-term overhead resistance at $159.10 with high volume.

Traders should now look for long-biased trades in CEO as long as it's trending above Friday's low of $155.55 and then once it sustains a move or close above those breakout levels with volume that hits near or above 202,576 shares. If that breakout kicks off soon, then CEO will set up to re-test or possibly take out its next major overhead resistance levels at $164.89 to $167.93.

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.

RELATED LINKS:

Follow Stockpickr on Twitter and become a fan on Facebook.

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.

More from Investing

Tesla's Supercharger Network Is Booming -- Here's Why That's a Concern

Tesla's Supercharger Network Is Booming -- Here's Why That's a Concern

After PayPal Buys iZettle, Pay-Tech Firms Could Process These Deals

After PayPal Buys iZettle, Pay-Tech Firms Could Process These Deals

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

Macy's Vs. J.C. Penney: Which Department Store Is Just Trying to Survive?

Macy's Vs. J.C. Penney: Which Department Store Is Just Trying to Survive?