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.
Read More: Warren Buffett's Top 10 Dividend Stocks
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.
Read More: 5 Hated Stocks That Could Pop When the S&P Drops
With that in mind, let's take a look at several stocks rising on unusual volume recently.
Fiesta Restaurant Group
Fiesta Restaurant Group (FRGI), through its subsidiaries, owns, operates and franchises fast-casual restaurants. This stock closed up 4% to $47.11 in Wednesday's trading session.
Wednesday's Volume: 873,000
Three-Month Average Volume: 283,878
Volume % Change: 271%
From a technical perspective, FRGI ripped sharply higher here right above some near-term support at $43 with strong upside volume flows. This big spike to the upside on Wednesday briefly pushed shares of FRGI into breakout territory, since the stock flirted with some near-term overhead resistance at $47.43. Shares of FRGI tagged an intraday high of $48.56, before closing off that level at $47.11. Market players should now look for a continuation move to the upside in the short-term if FRGI manages to take out Wednesday's intraday high of $48.56 with high volume.
Traders should now look for long-biased trades in FRGI as long as it's trending above its 50-day moving average at $44.19 and then once it sustains a move or close above $48.56 with volume that hits near or above 283,878 shares. If that move gets underway soon, then FRGI will set up to re-test or possibly take out its next major overhead resistance levels at $52.07 to its all-time high at $53.08. Any high-volume move above $53.08 will then give FRGI a chance to make a run at $55.
Read More: 8 Stocks George Soros Is Buying
Blue Nile
Blue Nile (NILE) operates as an online retailer of diamonds and fine jewelry worldwide. This stock closed up 2.7% at $25.55 in Wednesday's trading session.
Wednesday's Volume: 348,000
Three-Month Average Volume: 147,462
Volume % Change: 167%
From a technical perspective, NILE jumped higher here right above its recent 52-week low of $23.10 with strong upside volume flows. This stock has been downtrending badly for the last five months, with shares moving lower from its high of $36.16 to that 52-week low of $23.10. During that downtrend, shares of NILE have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of NILE are starting to rebound off that low with strong volume and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if NILE manages to take out some near-term overhead resistance levels at $26.50 to $27.08 with high volume.
Traders should now look for long-biased trades in NILE as long as it's trending above Wednesday's intraday low of $24.47 and then once it sustains a move or close above those breakout levels with volume that hits near or above 147,462 shares. If that breakout kicks off soon, then NILE will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $28.05 to $28.34, or $29 to $30.
Read More: 4 Stocks Warren Buffett Is Selling in 2014
On Assignment
On Assignment (ASGN) provides short- and long-term placement of contract, contract-to-hire and direct hire professionals in the U.S., Europe, Canada, China, Australia and New Zealand. This stock closed up 4.8% at $29.09 in Wednesday's trading session.
Wednesday's Volume: 897,000
Three-Month Average Volume: 379,400
Volume % Change: 105%
From a technical perspective, ASGN ripped sharply higher here with above-average volume. This stock recently gapped down sharply lower from $35.56 to $26.23 with heavy downside volume flows. Follow that move, shares of ASGN have now started to rebound with bullish upside volume flows and this stock is now trending within range of triggering a big breakout trade. That trade will hit if ASGN manages to take out Wednesday's intraday high of $29.32 to its gap-down-day high of $30.35 with high volume.
Traders should now look for long-biased trades in ASGN as long as it's trending above $28 or above Wednesday's intraday low of $27.52 and then once it sustains a move or close above those breakout levels with volume that this near or above 379,400 shares. If that breakout begins soon, then ASGN will set up to re-fill some of its previous gap-down-day zone that started at $35.56.
Read More: 5 Rocket Stocks to Buy for Correction Gains
First Solar
First Solar (FSLR) provides solar energy solutions worldwide. This stock closed up 3% to $65.60 in Wednesday's trading session.
Wednesday's Volume: 9.27 million
Three-Month Average Volume: 2.86 million
Volume % Change: 238%
From a technical perspective, FSLR jumped higher here right near its 200-day moving average of $60.67 with strong upside volume flows. This spike to the upside on Wednesday also pushed shares of FSLR back above its 50-day moving average of $65.31. Shares of FSLR are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if FSLR manages to take out Wednesday's intraday high of $65.94 and then once it clears some key near-term overhead resistance at $66.68 with high volume.
Traders should now look for long-biased trades in FSLR as long as it's trending above $64 or above $62 and then once it sustains a move or close above those breakout levels volume that hits near or above 2.86 million shares. If that breakout triggers soon, then FSLR will set up to re-test or possibly take out its next major overhead resistance levels at $70 to $72, or even $73 to its 52-week high at $74.84.
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:
>>4 Big Stocks on Traders' Radars
>>5 Tech Trades Ready to Move
>>4 Stocks Under $10 Moving Higher
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.
No comments:
Post a Comment