3 Stocks Rising 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 recently.

Springleaf Holdings (LEAF), through its subsidiaries, offers consumer finance and credit insurance products and services. This stock closed up 5.7% at $27.27 in Monday's trading session.

Monday's Volume: 604,000
Three-Month Average Volume: 312,719
Volume % Change: 107%

From a technical perspective, LEAF ripped sharply higher here and broke out above some previous overhead resistance at $26.47 with above-average volume. This sharp jump higher on Monday is now starting to push shares of LEAF within range of triggering an even bigger breakout trade. That trade will hit if LEAF manages to take out some key previous resistance levels at $28.43 to $28.89 and then once it clears its 52-week high of $29.50 with high volume.

Traders should now look for long-biased trades in LEAF as long as it's trending above Monday's low of $25.77 or above $25 and then once it sustains a move or close above those breakout levels with volume that this near or above 312,719 shares. If that breakout starts soon, then LEAF will set up to enter new 52-week-high territory above $29.50, which is bullish technical price action. Some possible upside targets off that breakout are $35 to $40.

HollySys Automation Technologies (HOLI) provides automation and control technologies and products to customers in industrial, railway, subway, nuclear power, building retrofit, and mechanical and electronic industries primarily in the People's Republic China, Hong Kong, Southeast Asia, and the Middle East. This stock closed up 6% at $23 in Monday's trading session.

Monday's Volume: 951,000
Three-Month Average Volume: 481,939
Volume % Change: 105%

From a technical perspective, HOLI spiked sharply higher here right off its 50-day moving average of $21.20 with strong upside volume. This move started to push shares of HOLI into breakout territory, since the stock cleared some near-term overhead resistance at $22.78. Shares of HOLI are now starting to trend within range of triggering another big breakout trade. That trade will hit if HOLI manages to take out Monday's intraday high of $23.05 to its 52-week high of $23.95 with high volume.

Traders should now look for long-biased trades in HOLI as long as it's trending above its 50-day at $21.20 or above more support at $20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 481,939 shares. If that breakout materializes soon, then HOLI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $28 to $30.

TAL Education Group (XRS), together with its subsidiaries, provides K-12 after-school tutoring services under the Xueersi brand name in China. This stock closed up 5.4% at $25.99 in Monday's trading session.

Monday's Volume: 1.49 million
Three-Month Average Volume: 481,617
Volume % Change: 204%

From a technical perspective, XRS soared sharply higher here and broke out above some key overhead resistance levels at $25.31 to $25.98 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $19.32 to its intraday high of $26.14. During that uptrend, shares of XRS have been making mostly higher lows and higher highs, which is bullish technical price action. This sharp spike higher on Monday is now pushing shares of XRS within range of triggering another big breakout trade. That trade will hit if XRS manages to take out Monday's intraday high of $26.14 to its 52-week high of $26.58 with high volume.

Traders should now look for long-biased trades in XRS as long as it's trending above Monday's low of $24.60 or above $24 and then once it sustains a move or close above those breakout levels with volume that's near or above 481,617 shares. If that breakout kicks off soon, then XRS 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 $35.

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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