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.

Auspex Pharmaceuticals

Auspex Pharmaceuticals (ASPX) , a biopharmaceutical company, focuses on developing and commercializing novel medicines for the treatment of orphan diseases. This stock closed up 5.7% at $22.54 in Friday's trading session.

Friday's Volume: 232,000
Three-Month Average Volume: 131,762
Volume % Change: 65%

From a technical perspective, ASPX ripped sharply higher here right off its 50-day moving average of $20.77 with above-average volume. This spike to the upside on Friday is quickly pushing shares of ASPX within range of triggering a major breakout trade. That trade will hit if ASPX manages to take out Friday's intraday high of $22.64 and then once it clears more key overhead resistance levels at $24.67 to $25.67 with high volume.

Traders should now look for long-biased trades in ASPX as long as it's trending above some key near-term support levels at $20.48 or above $20 and then once it sustains a move or close above those breakout levels with volume that this near or above 131,762 shares. If that breakout develops soon, then ASPX will set up to re-test or possibly take out its next major overhead resistance levels at $33.09 to its all-time high at $35.78.

MGP Ingredients

MGP Ingredients (MGPI) produces and sells distillery and ingredients products to the packaged goods industry in the U.S., Japan and Canada. This stock closed up 15.3% to $12.46 in Friday's trading session.

Friday's Volume: 327,000
Three-Month Average Volume: 69,031
Volume % Change: 349%

From a technical perspective, MGPI ripped sharply higher here right above some near-term support at $10.29 and right above its 50-day moving average of $9.98 with strong upside volume flows. This explosive move to the upside on Friday is now quickly pushing shares of MGPI within range of triggering a major breakout trade. That trade will hit if MGJI manages to clear some key near-term overhead resistance levels at $12.79 to its 52-week high at $13.20 with high volume.

Traders should now look for long-biased trades in MGPI as long as it's trending above some key near-term support levels at $10.29 or above its 50-day at $9.98 and then once it sustains a move or close above those breakout levels with volume that hits near or above 69,031 shares. If that breakout gets started soon, then MGPI will set up to enter new 52-week-high territory above $13.20, which is bullish technical price action. Some possible upside targets off that breakout are $15 to $17.

HomeAway

HomeAway (AWAY) , together with its subsidiaries, operates an online vacation rental property marketplace that enables property owners and managers to market properties for rental to vacation travelers. This stock closed up 2.5% to $34.42 in Friday's trading session.

Friday's Volume: 1.96 million
Three-Month Average Volume: 1.19 million
Volume % Change: 85%

From a technical perspective, AWAY jumped higher here right above its 50-day moving average of $33.33 with above-average volume. This spike to the upside on Friday is quickly pushing shares of AWAY within range of triggering a near-term breakout trade. That trade will hit if AWAY manages to take out some near-term overhead resistance at $34.92 to its 200-day moving average at $36.59 and then above more resistance at $36.90 with high volume.

Traders should now look for long-biased trades in AWAY as long as it's trending above some key near-term support at $33 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.19 million shares. If that breakout hits soon, then AWAY will set up to re-test or possibly take out its next major overhead resistance levels at $37.75 to $40, or even $42.50.

iGate

iGate (IGTE) , through its subsidiaries, provides information technology and IT-enabled operations and offshore outsourcing solutions and services to large and medium-size organizations. This stock closed up 1.7% to $38.29 in Friday's trading session.

Friday's Volume: 1.19 million
Three-Month Average Volume: 249,262
Volume % Change: 419%

From a technical perspective, IGTE trended modestly higher here right above its 50-day moving average of $36.95 with monster upside volume flows. This spike to the upside on Friday is quickly pushing shares of IGTE within range of triggering a major breakout trade. That trade will hit if IGTE manages to take out some key near-term overhead resistance levels at $38.92 to $39.24 with high volume.

Traders should now look for long-biased trades in IGTE as long as it's trending above its 50-day at $36.95 or above some more near-term support at $35.51 and then once it sustains a move or close above those breakout levels with volume that hits near or above 249,262 shares. If that breakout triggers soon, then IGTE will set up to re-test or possibly take out its 52-week high at $42.90.

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.

RELATED LINKS:

 

 

 

Follow Stockpickr on Twitter and become a fan on Facebook.

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.

More from Investing

PayPal Says It's Testing a Venmo Debit Card

PayPal Says It's Testing a Venmo Debit Card

GE Reached 'Irrational Level' Even Amid Efforts to 'De-Risk' Portfolio: JPMorgan

GE Reached 'Irrational Level' Even Amid Efforts to 'De-Risk' Portfolio: JPMorgan

60 Seconds: What the Heck is GDPR?

60 Seconds: What the Heck is GDPR?

Jim Cramer: Why I am So Bullish on Apple's Services Revenue

Jim Cramer: Why I am So Bullish on Apple's Services Revenue

Video: Jim Cramer on North Korea, Oil Prices, Apple and Carnival Corporation

Video: Jim Cramer on North Korea, Oil Prices, Apple and Carnival Corporation