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.
Ultragenyx Pharmaceutical
Ultragenyx Pharmaceutical (RARE), a development-stage biotechnology company, focuses on the identification, acquisition, development and commercialization of various products for the treatment of rare and ultra-rare diseases in the U.S. This stock closed up 3% to $50 in Wednesday's trading session.
Wednesday's Volume: 727,000
Three-Month Average Volume: 227,067
Volume % Change: 186%
From a technical perspective, RARE trended higher here with strong upside volume flows. This stock recently broke out above some near-term overhead resistance levels at $44.30 to around $45 with strong volume. Shares of RARE are now quickly approaching another big breakout trade. That trade will hit if RARE manages to take out Wednesday's intraday high of $50.35 to some more near-term overhead resistance levels at $50.91 to $50.93 with high volume.
Traders should now look for long-biased trades in RARE as long as it's trending above Wednesday's intraday low of $47.43 and then once it sustains a move or close above those breakout levels with volume that hits near or above 227,067 shares. If that breakout hits soon, then RARE will set up to re-test or possibly take out its next major overhead resistance levels at $57.50 to $60.
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Veracyte
Veracyte (VCYT) operates as a diagnostics company in the field of molecular cytology to enhance patient outcomes and lower healthcare costs. This stock closed up 1.4% at $14.77 in Wednesday's trading session.
Wednesday's Volume: 138,000
Three-Month Average Volume: 81,823
Volume % Change: 75%
From a technical perspective, VCYT trended modestly higher here with above-average volume. This stock recently formed a double bottom chart pattern at $13.51 to $13.40. Since that bottom, shares of VCYT have started to trend higher and it's now quickly moving within range of triggering a big breakout trade. That trade will hit if VCYT manages to take out some key near-term overhead resistance levels at $15 to its 50-day moving average of $15.12 with high volume.
Traders should now look for long-biased trades in VCYT as long as it's trending above Wednesday's intraday low of $14.30 or above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 81,823 shares. If that breakout begins soon, then VCYT will set up to re-test or possibly take out its next major overhead resistance levels at $16.50 to $17.50, or even $18.
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Jazz Pharmaceuticals
Jazz Pharmaceuticals (JAZZ), a specialty biopharmaceutical company, identifies, develops and commercializes pharmaceutical products for various medical needs in the U.S., Europe and internationally. This stock closed up 5.1% at $142.84 in Wednesday's trading session.
Wednesday's Volume: 2.84 million
Three-Month Average Volume: 823,812
Volume % Change: 248%
From a technical perspective, JAZZ ripped sharply higher here with strong upside volume flows. This big jump to the upside on Wednesday briefly pushed shares of JAZZ back above its 50-day moving average at $146.48 and briefly into breakout territory above some near-term overhead resistance at $143.51. Shares of JAZZ tagged an intraday high of $149.95, before it closed well off that level at $142.84. Market players should now look for JAZZ to trigger another key breakout trade. That trade will hit if JAZZ manages to take out some key near-term overhead resistance levels at $150 to $151 with high volume.
Traders should now look for long-biased trades in JAZZ as long as it's trending above $140 or above $139 and then once it sustains a move or close above those breakout levels with volume that's near or above 823,812 shares. If that breakout hits soon, then JAZZ will set up to re-test or possibly take out its next major overhead resistance levels at $155 to $166.
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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