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.
Maxim Integrated Products
Maxim Integrated Products (MXIM) designs, develops, manufactures, and markets various linear and mixed-signal integrated circuits worldwide. This stock closed up 4% to $33.53 in Monday's trading session.
Monday's Volume: 5.42 million
Three-Month Average Volume: 2.55 million
Volume % Change: 125%
From a technical perspective, MXIM soared higher here right off its 50-day moving average of $32.34 with strong upside volume. This move is quickly pushing shares of MXIM within range of triggering a major breakout trade. That trade will hit if MXIM manages to take out some near-term overhead resistance levels at $33.70 to its 52-week high at $33.78 with high volume.
Traders should now look for long-biased trades in MXIM as long as it's trending above its 50-day at $32.34 or above more near-term support at $31.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.55 million shares. If that breakout triggers soon, then MXIM will set up to enter new 52-week-high territory above $33.78, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.
Bluebird Bio
Bluebird Bio (BLUE), a clinical-stage biotechnology company, focuses on developing gene therapies for severe genetic and orphan diseases. This stock closed up 6.1% to $26.73 in Monday's trading session.
Monday's Volume: 485,000
Three-Month Average Volume: 228,857
Volume % Change: 119%
From a technical perspective, BLUE ripped sharply higher here with above-average volume. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $17.40 to its intraday high of $27.18. During that uptrend, shares of BLUE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BLUE within range of triggering a major breakout trade. That trade will hit if BLUE manages to take out some key overhead resistance levels at $28.08 to $28.98 with high volume.
Traders should now look for long-biased trades in BLUE as long as it's trending above Monday's low of $24.79 and then once it sustains a move or close above those breakout levels with volume that hits near or above 228,857 shares. If that breakout gets underway soon, then BLUE will set up to re-test or possibly take out its next major overhead resistance levels at $32 to $34.
Grifols
Grifols (GRFS), a specialty biopharmaceutical company, develops, manufactures, and distributes a range of plasma derivative products primarily in the European Union, Spain, the U.S., Canada, and internationally. This stock closed up 3.2% at $42.12 in Monday's trading session.
Monday's Volume: 1.10 million
Three-Month Average Volume: 622,295
Volume % Change: 89%
From a technical perspective, GRFS spiked notably higher here right off its 50-day moving average of $40.71 with above-average volume. This spike higher on Monday is quickly pushing shares of GRFS within range of triggering a major breakout trade. That trade will hit if GRFS manages to take out some key overhead resistance levels at $42.28 to $42.87 and then once it clears its 52-week high at $43.45 with high volume.
Traders should now look for long-biased trades in GRFS as long as it's trending above its 50-day at $40.71 or above more near-term support at $39.35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 622,295 shares. If that breakout materializes soon, then GRFS will set up to enter new 52-week-high territory above $43.45, which is bullish technical price action. Some possible upside targets off that move are $48 to $50.
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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