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 recently.

Burlington Stores

Burlington Stores (BURL) operates as a retailer of branded apparel products in the U.S. This stock closed up 2.9% at $28.20 in Friday's trading session.

Friday's Volume: 1.37 million
Three-Month Average Volume: 476,944
Volume % Change: 213%

From a technical perspective, BURL trended higher here back above its 50-day moving average of $27.83 with strong upside volume. This move is quickly pushing shares of BURL within range of triggering a near-term breakout trade. That trade will hit if BURL manages to take out Friday's high of $28.42 to some more near-term overhead resistance at $28.82 with strong volume.

Traders should now look for long-biased trades in BURL as long as it's trending above $27 or $26 and then once it sustains a move or close above those breakout levels with volume that this near or above 476,944 shares. If that breakout starts soon, then BURL will set up to re-test or possibly take out its next major overhead resistance levels at $31 to its 52-week high at $32.98.

Constant Contact

Constant Contact (CTCT) provides online marketing tools that are designed for small businesses, associations and non-profits primarily in the U.S. This stock closed up 10.8% at $29.07 in Friday's trading session.

Friday's Volume: 1.58 million
Three-Month Average Volume: 532,302
Volume % Change: 201%

From a technical perspective, CTCT gapped up sharply higher here and broke out above some near-term overhead resistance levels at $26.79 to $28.74 with above-average volume. This move is quickly pushing shares of CTCT within range of triggering another big breakout trade. That trade will hit if CTCT manages to take out some key near-term overhead resistance levels at $30.18 to $31.24 with high volume.

Traders should now look for long-biased trades in CTCT as long as it's trending above Fridays low of $27.05 or above its 50-day at $26.35 and then once it sustains a move or close above those breakout levels with volume that's near or above 532,302 shares. If that breakout hits soon, then CTCT will set up to re-test or possibly take out its 52-week high at $32.91.

Cyberonics

Cyberonics (CYBX), together with its subsidiaries, engages in the design, development, marketing and sale of implantable medical devices to hospitals and ambulatory surgery centers. This stock closed up 2.6% at $62.12 in Friday's trading session.

Friday's Volume: 695,000
Three-Month Average Volume: 243,652
Volume % Change: 199%

From a technical perspective, CYBX jumped notably higher here right off its 50-day moving average of $64.67 with above-average volume. This stock has been downtrending badly for the last two months, with shares moving lower from its high of $73.52 to its recent low of $58.47. During that downtrend, shares of CYBX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CYBX are now bouncing off its recent lows and it's moving within range of triggering a near-term breakout trade. That trade will hit if CYBX manages to take out some near-term overhead resistance levels at $64.09 to its 50-day moving average of $64.67 with high volume.

Traders should now look for long-biased trades in CYBX as long as it's trending above its 200-day at $60.74 or above $59 and then once it sustains a move or close above those breakout levels with volume that's near or above 243,652 shares. If that breakout triggers soon, then CYBX will set up to re-test or possibly take out its next major overhead resistance levels at $67.12 to $69.18. Any high-volume move above those levels will then give CYBX a chance to tag $70.70 to $72.

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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