4 Stocks Breaking Out 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.

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.

Cabela's

Cabela's (CAB) , together with its subsidiaries, operates as a specialty retailer and direct marketer of hunting, fishing, camping and related outdoor merchandise. This stock closed up 2.6% to $61.30 in Monday's trading session.

Monday's Volume: 1.66 million
Three-Month Average Volume: 904,520
Volume % Change: 104%

From a technical perspective, CAB trended notably higher here right off its 50-day moving average of $59.67 with above-average volume. This spike higher on Monday is now starting to push shares of CAB within range of triggering a big breakout trade. That trade will hit if CAB manages to take out some key overhead resistance levels at $62 to $63.95 with high volume.

Traders should now look for long-biased trades in CAB as long as it's trending above its 50-day at $59.67 or above more near-term support at $58.51 and then once it sustains a move or close above those breakout levels with volume that hits near or above 904,520 shares. If that breakout triggers soon, then CAB will set up to re-test or possibly take out its next major overhead resistance levels at $66.98 to around $70.

Greatbatch

Greatbatch (GB) is engaged in implantable medical and electrochem solutions businesses. This stock closed up 1.1% to $45.59 in Monday's trading session.

Monday's Volume: 257,000
Three-Month Average Volume: 136,698
Volume % Change: 101%

From a technical perspective, GB spiked higher here back above its 200-day moving average of $45.50 with above-average volume. This stock recently formed a triple bottom chart pattern at $44.72, $44.79 and $44.76. Following that bottom, shares of GB have now started to spike higher and move within range of triggering a big breakout trade. That trade will hit if GB manages to take out some key near-term overhead resistance levels at $46.55 to $46.71 and then above its 50-day moving average of $47.36 with high volume.

Traders should now look for long-biased trades in GB as long as it's trending above those triple bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 136,698 shares. If that breakout starts soon, then GB will set up to re-test or possibly take out its next major overhead resistance levels at $49.50 to its 52-week high at $51.64.

Domtar

Domtar (UFS) designs, manufactures, markets and distributes communications papers, specialty and packaging papers, and absorbent hygiene products in the U.S., Canada, Europe, Asia and internationally. This stock closed up 2.8% at $37.69 in Monday's trading session.

Monday's Volume: 2 million
Three-Month Average Volume: 801,716
Volume % Change: 155%

From a technical perspective, UFS spiked notably higher here right above some near-term support at $36.50 with above-average volume. This spike to the upside on Monday briefly pushed shares of UFS back above its 50-day moving average of $38.09, after the stock tagged an intraday high of $38.28. Shares of UFS recently formed a triple bottom chart pattern at $35.19, $35.91 and $36.50. Following that bottom, shares of UFS are now starting spike higher off those support levels and it's quickly moving within range of triggering a big breakout trade. That trade will hit if UFS manages to clear some key near-term overhead resistance levels at $38.75 to $38.76 with high volume.

Traders should now look for long-biased trades in UFS as long as it's trending above those triple bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 801,716 shares. If that breakout develops soon, then UFS will set up to re-test or possibly take out its next major overhead resistance levels at $41.83 to $44, or even its 200-day moving average of $45.44.

Matrix Service

Matrix Service (MTRX) provides engineering, fabrication, infrastructure, construction and maintenance services primarily to the oil, gas, power, petrochemical, industrial, and mining and minerals markets in the U.S. and Canada. This stock closed up 3.3% to $25 in Monday's trading session.

Monday's Volume: 700,000
Three-Month Average Volume: 343,050
Volume % Change: 115%

From a technical perspective, MTRX jumped higher here right above some near-term support levels at $24 to $23.09 with above-average volume. This spike higher on Monday also pushed shares of MTRX into breakout territory, since the stock cleared some near-term overhead resistance at $24.75. This move also pushed shares of MTRX inside of its recent gap-down-day zone from a few weeks ago that took the stock lower from just over $29 to $21.33. Market players should now look for a continuation move higher into that gap in the short-term if MTRX can manage to clear Monday's intraday high of $25.21 with high volume.

Traders should now look for long-biased trades in MTRX as long as it's trending above some near-term support levels at $24 or at $23.09 and then once it sustains a move or close above $25.21 with volume that hits near or above 343,050 shares. If that move starts soon, then MTRX will set up to re-fill some more of its previous gap-down-day zone that started just above $29.

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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