3 Stocks Spiking 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.

Raptor Pharmaceuticals (RPTP), a biopharmaceutical company, focuses on developing and commercializing life-altering therapeutics that treat debilitating and often fatal diseases. This stock closed up 6.4% to $10.92 in Wednesday's trading session.

Wednesday's Volume: 1 million
Three-Month Average Volume: 674,014
Volume % Change: 60%

From a technical perspective, RPTP ripped higher here right above some near-term support at $9.94 and above its 50-day moving average of $9.59 with above-average volume. This sharp uptick higher on Wednesday is starting to push shares of RPTP within range of triggering a major breakout trade. That trade will hit if RPTP manages to take out Wednesday's intraday high of $11.07 to more resistance at $12.20 and then above its 200-day moving average of $12.44 with high volume.

Traders should now look for long-biased trades in RPTP as long as it's trending above Wednesday's intraday low of $10.13 or above its 50-day moving average at $9.59 and then once it sustains a move or close above those breakout levels with volume that hits near or above 674,014 shares. If that breakout hits soon, then RPTP will set up to re-test or possibly take out its next major overhead resistance level at $14. Any high-volume move above $14 will then give RPTP a chance to re-fill some of its previous gap-down-day zone from March that started above $16.

CBS (CBS) operates as a mass media company in the U.S. and internationally. This stock closed up 0.85% at $63.93 in Wednesday's trading session.

Wednesday's Volume: 78.60 million
Three-Month Average Volume: 10.70 million
Volume % Change: 739%

From a technical perspective, CBS spiked modestly higher here right above some near-term support at $62 with monster upside volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $54.90 to its recent high of $65.24. During that uptrend, shares of CBS have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CBS within range of triggering a near-term breakout trade. That trade will hit if CBS manages to take out Wednesday's intraday high of $64.14 to some more near-term overhead resistance at $65.24 with high volume.

Traders should now look for long-biased trades in CBS as long as it's trending above some near-term support levels at $62 or at $61 and then once it sustains a move or close above those breakout levels with volume that this near or above 10.70 million shares. If that breakout kicks off soon, then CBS will set up to re-test or possibly take out its next major overhead resistance levels at $67 to its 52-week high at $68.10.

InvenSense (INVN) designs, develops, markets and sells micro-electro-mechanical system gyroscopes for motion tracking devices in consumer electronics. This stock closed up 4.9% at $23.59 in Wednesday's trading session.

Wednesday's Volume: 3.65 million
Three-Month Average Volume: 2.14 million
Volume % Change: 75%

From a technical perspective, INVN ripped higher here right above some near-term support at $22.06 with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $17.10 to its recent high of $24.60. During that uptrend, shares of INVN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of INVN within range of triggering a major breakout trade. That trade will hit if INVN manages to take out some key near-term overhead resistance levels at $24 to its all-time high at $24.60 with high volume.

Traders should now look for long-biased trades in INVN as long as it's trending above some key near-term support levels at $22.06 or above $21 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.14 million shares. If that breakout materializes soon, then INVN will set up to enter new all-time-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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