4 Big-Volume Stocks to Trade for Breakouts

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.

Telus

Telus  (TU) provides a range of telecommunications products and services in Canada. This stock is trading up 1% to $35.10 in Monday's trading session.

Monday's Volume: 458,000
Three-Month Average Volume: 283,964
Volume % Change: 200%

From a technical perspective, TU is spiking modestly higher here right off its 200-day moving average of $34.68 with strong upside volume flows. This small move to the upside is now starting to push shares of TU within range of triggering a big breakout trade above some key overhead resistance levels. That trade will trigger if TU manages to take out some key overhead resistance levels at $35.36 to $35.54 and then above $35.76 to $36.40 with high volume.

Traders should now look for long-biased trades in TU as long as it's trending above its 50-day at $34.17 or above more near-term support at $33.76 and then once it sustains a move or close above those breakout levels with volume that registers near or above 283,964 shares. If that breakout kicks off soon, then TU will set up to re-test or possibly take out its next major overhead resistance levels at $38 to its 52-week high of $38.94.

Revance Therapeutics

Revance Therapeutics  (RVNC), a clinical-stage specialty biopharmaceutical company, focuses on the development, manufacture and commercialization of novel botulinum toxin products for various aesthetic and therapeutic indications. This stock is trading up 4.4% at $21.27 in Monday's trading session.

Monday's Volume: 130,000
Three-Month Average Volume: 128,392
Volume % Change: 153%

From a technical perspective, RVNC is ripping sharply higher here right off its 50-day moving average of $19.99 with above-average volume. This stock recently formed a double bottom chart pattern, after shares found buying interest at $18.86 and then $19.25. Shares of RVNC have now started to trend to the upside after forming that double bottom, and this stock is now quickly moving within range of triggering a big breakout trade above some key near-term overhead resistance levels. That trade will hit if RVNC manages to take out some key overhead resistance levels at around $22 to $23.72 with high volume.

Traders should now look for long-biased trades in RVNC as long as it's trending above its 50-day at $19.99 or its 200-day at $19.47 and then once it sustains a move or close above those breakout levels with volume that hits near or above 128,392 shares. If that breakout gets set off soon, then RVNC will set up to re-test or possibly take out its next major overhead resistance levels at $26 to $30.

Amphastar Pharmaceuticals

Amphastar Pharmaceuticals  (AMPH), a specialty pharmaceutical company, focuses on the development, manufacture, marketing, and sale of generic and proprietary injectable and inhalation products. This stock is trading up 2.9% at $14.30 in Monday's trading session.

Monday's Volume: 467,000
Three-Month Average Volume: 194,824
Volume % Change: 350%

From a technical perspective, AMPH is ripping to the upside here right above some near-term support at $13.55 with strong upside volume flows. This spike higher on Monday is now starting to push shares of AMPH within range of triggering a major breakout trade above some key near-term overhead resistance levels. That trade will trigger if AMPH manages to take out some key overhead resistance levels at its 50-day moving average of $14.87 to $15 and then above more resistance at $15.50 to its all-time high of $16.28 with high volume.

Traders should now look for long-biased trades in AMPH as long as it's trending above some key near-term support at $13.55 and then once it sustains a move or close above those breakout levels with volume that hits near or above 194,824 shares. If that breakout develops soon, then AMPH will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $23.

Zillow Group

Zillow Group  (Z) operates real estate and home-related information marketplaces on mobile and the Web in the U.S. This stock is trading up 5.8% at $97.63 in Monday's trading session.

Monday's Volume: 2.34 million
Three-Month Average Volume: 2.04 million
Volume % Change: 173%

From a technical perspective, Z is gapping up sharply higher here right above some key near-term support at $90.76 with above-average volume. This gap to the upside on Monday has now taken shares of Z out of its recent downtrend, which saw shares of this stock fall from its recent high of $104.06 to its near-term low of $90.76. Shares of Z are now starting to trend within range of triggering a big breakout trade above some key near-term overhead resistance levels. That trade will hit if Z manages to take out some key overhead resistance levels at its 50-day moving average of $101.56 to that recent high of $104.06 with high volume.

Traders should now look for long-biased trades in Z as long as it's trending above Monday's intraday low of $95.72 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.04 million shares. If that breakout materializes soon, then Z will set up to re-test or possibly take out its next major overhead resistance levels at $110 to its 200-day moving average of $113.28, or even $120.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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