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.
Cimarex Energy (XEC) operates as an independent oil and gas exploration and production company primarily in Texas, Oklahoma and New Mexico. This stock closed up 2.2% at $138.88 in Friday's trading session.
Friday's Volume: 1.65 million
Three-Month Average Volume: 1.04 million
Volume % Change: 59%
From a technical perspective, XEC bounced notably higher here with above-average volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $92.14 to its recent high of $139.95. During that uptrend, shares of XEC have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Friday is starting to push shares of XEC within range of triggering a big breakout trade. That trade will hit if XEC manages to take out Friday's intraday high of $139 to its 52-week high of $139.95.
Traders should now look for long-biased trades in XEC as long as it's trending above Friday's low of $134.07 or above more near-term support at $130 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.04 million shares. If that breakout kicks off soon, then XEC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $140 to $145, or even $150.
Lands' End (LE) operates as a multi-channel retailer primarily in the U.S., Europe and Asia. This stock closed up 5.8% at $30.50 in Friday's trading session.
Friday's Volume: 617,000
Three-Month Average Volume: 431,255
Volume % Change: 50%
From a technical perspective, LE spiked sharply higher here right above some near-term support at $28 with above-average volume. This spike higher on Friday is quickly pushing shares of LE within range of triggering a near-term breakout trade. That trade will hit if LE manages to take out Friday's intraday high of $30.70 to some more near-term overhead resistance at $31 with high volume.
Traders should now look for long-biased trades in LE as long as it's trending above Friday's low of $29.10 or above some more near-term support at $28 and then once it sustains a move or close above those breakout levels with volume that's near or above 431,255 shares. If that breakout triggers soon, then LE will set up to re-test or possibly take out its next major overhead resistance levels at $34.35 to its all-time high at $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.