3 Stocks in Breakout Territory With 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.

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.

With that in mind, let's take a look at several stocks rising on unusual volume recently.

Baytex Energy

Baytex Energy (BTE) , an oil and gas company, is engaged in the acquisition, development and production of oil and natural gas in the Western Canadian Sedimentary Basin and the U.S. This stock closed up 1.3% to $44.59 in Friday's trading session.

Friday's Volume: 676,000
Three-Month Average Volume: 205,922
Volume % Change: 280%

From a technical perspective, BTE trended modestly higher here right above its 50-day moving average of $43.40 with strong upside volume flows. This spike higher on Friday is starting to push shares of BTE within range of triggering a big breakout trade. That trade will hit if BTE manages to clear some near-term overhead resistance levels at $44.95 to $45.96 and then above its 52-week high at $46.46 with high volume.

Traders should now look for long-biased trades in BTE as long as it's trending above its 50-day at $43.40 or above $43 and then once it sustains a move or close above those breakout levels with volume that hits near or above 205,922 shares. If that breakout begins soon, then BTE will set up to enter new 52-week-high territory above $46.46, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55.

Workday

Workday (WDAY) provides enterprise cloud applications for global human resources and finance in the U.S. and internationally. This stock closed up 6% to $91.07 in Friday's trading session.

Friday's Volume: 3.28 million
Three-Month Average Volume: 1.53 million
Volume % Change: 155%

From a technical perspective, WDAY ripped sharply higher here right above both its 50-day moving average of $84.86 and its 200-day moving average of $85.05 with above-average volume. This sharp move to the upside on Friday is quickly pushing shares of WDAY within range of triggering a big breakout trade. That trade will hit if WDAY manages to take out Friday's intraday high of $91.55 and then once it clears some more key overhead resistance at $92.15 with high volume.

Traders should now look for long-biased trades in WDAY as long as it's trending above Friday's intraday low of $86.36 or above more key near-term support at $85.23 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.53 million shares. If that breakout kicks off soon, then WDAY will set up to re-test or possibly take out its next major overhead resistance levels at $96.50 to $105.50.

Federated National Holding


Federated National Holding (FNHC) , through its subsidiaries, is engaged in the insurance underwriting, distribution and claims processing in the U.S. This stock closed up 7% at $24.70 in Friday's trading session.

Friday's Volume: 541,250
Three-Month Average Volume: 254,222
Volume % Change: 115%

From a technical perspective, FNHC trended sharply higher here right off its 50-day moving average of $23.30 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $19.70 to its recent high of $25.15. During that uptrend, shares of FNHC have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Friday is quickly pushing shares of FNHC within range of triggering a big breakout trade. That trade will hit if FNHC manages to take out some near-term overhead resistance levels at $25.15 to $26.26 and then once it clears its 52-week high at $26.60 with high volume.

Traders should now look for long-biased trades in FNHC as long as it's trending above its 50-day at $23.30 or above more near-term support at $22.84 and then once it sustains a move or close above those breakout levels with volume that this near or above 254,222 shares. If that breakout begins soon, then FNHC will set up to enter new 52-week-high territory above $26.60, 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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