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.

Zulily

Zulily (ZU) operates as an online retailer. This stock closed up 6.4% at $35.94 in Wednesday's trading session.

Wednesday's Volume: 1.99 million
Three-Month Average Volume: 1.30 million
Volume % Change: 50%

From a technical perspective, ZU ripped sharply higher here right above some near-term support levels at $32 and at $31.81 with above-average volume. This sharp spike higher on Wednesday is quickly pushing shares of ZU within range of triggering a major breakout trade. That trade will hit if ZU manages to take out Wednesday's intraday high of $36.11 to some more key overhead resistance at $36.90 with high volume.

Traders should now look for long-biased trades in ZU as long as it's trending above Wednesday's low of $33.03 or above $32 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.30 million shares. If that breakout materializes soon, then ZU will set up to re-fill some of its previous gap-down-day zone from May that started just above $50.

500.com

500.com (WBAI) provides online sports lottery services in the People's Republic of China. This stock closed up 6.6% at $37.96 in Wednesday's trading session.

Wednesday's Volume: 1.02 million
Three-Month Average Volume: 446,017
Volume % Change: 124%

From a technical perspective, WBAI jumped sharply higher here right above its 50-day moving average of $34.29 with above-average volume. This spike higher on Wednesday pushed shares of WBAI into breakout territory, since the stock closed above some near-term overhead resistance at $35.75. This move is now starting to push shares of WBAI within range of triggering another big breakout trade. That trade will hit if WBAI manages to take out some key overhead resistance levels at $38.50 to $38.75 and then once it clears more resistance at $41.09 with high volume.

Traders should now look for long-biased trades in WBAI as long as it's trending above $36 or above Wednesday's low of $35.47 then once it sustains a move or close above those breakout levels with volume that hits near or above 446,017 shares. If that breakout kicks off soon, then WBAI will set up to re-test or possibly take out its next major overhead resistance levels at $45 to $46.

58.com

58.com (WUBA) operates an online marketplace for local merchants and consumers in the People's Republic of China. This stock closed up 7% at $45.64 in Wednesday's trading session.

Wednesday's Volume: 1.54 million
Three-Month Average Volume: 1.32 million
Volume % Change: 50%

From a technical perspective, WUBA ripped sharply higher here right above its 50-day moving average of $41.18 with above-average volume. This sharp spike higher on Wednesday pushed shares of WUBA into breakout territory, since the stock took out some near-term overhead resistance at $44.36. Shares of WUBA are now starting to trend within range of triggering another big breakout trade. That trade will hit if WUBA manages to clear Wednesday's intraday high of $45.78 and then once it takes out more key overhead resistance at $49.05 with high volume.

Traders should now look for long-biased trades in WUBA as long as it's trending above Wednesday's low of $42.01 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.32 million shares. If that breakout gets underway soon, then WUBA will set up to re-test or possibly take out its next major overhead resistance levels at $52.50 to $56.70, or even $58.89.

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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