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.
>>5 Hated Earnings Stocks You Should Love
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.
>>5 Rocket Stocks to Stomp the S&P in 2014
With that in mind, let's take a look at several stocks rising on unusual volume recently.
NXP Semiconductors
NXP Semiconductors (NXPI) provides mixed signal and standard product solutions for radio frequency, analog, power management, interface, security and digital processing products worldwide. This stock is trading up 2% at $43.80 in Tuesday's trading session.
Tuesday's Volume: 4.02 million
Three-Month Average Volume: 2.89 million
Volume % Change: 225%
>>5 Stocks Poised for Breakouts
From a technical perspective, NXPI is bouncing modestly higher here right off its 50-day moving average of $42.80 with above-average volume. This move is quickly pushing shares of NXPI within range of triggering a near-term breakout trade. That trade will hit if NXPI manages to take out some near-term overhead resistance levels at $45 to its 52-week high at $46.32 with high volume.
Traders should now look for long-biased trades in NXPI as long as it's trending above its 50-day at $42.80 or above more near-term support at $42.42 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.89 million shares. If that breakout hits soon, then NXPI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $53.
Allot Communications
Allot Communications (ALLT) develops, markets, and sells intelligent Internet protocol service optimization solutions in the U.S., the Middle East, Africa, Europe, Asia, Oceania and rest of the Americas. This stock is trading up 7.8% at $16.10 in Tuesday's trading session.
Tuesday's Volume: 948,000
Three-Month Average Volume: 300,781
Volume % Change: 416%
>>5 Stocks Insiders Love Right Now
From a technical perspective, ALLT is ripping higher here right above some near-term support at $14.64 and into new 52-week-high territory with strong upside volume. This stock has been uptrending over the last month and change, with shares moving higher from its low of $12.55 to its intraday high of $16.20. During that uptrend, shares of ALLT have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in ALLT as long as it's trending above $15 or above Tuesday's low of $14.79 and then once it sustains a move or close above Tuesday's high of $16.20 with volume that's near or above 300,781 shares. If we get that move soon, then ALLT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $19.42 to $21.
Textura
Textura (TXTR) provides on-demand business collaboration software solutions to the commercial construction industry in the U.S. and Canada. This stock is trading up 3.9% at $30.76 in Tuesday's trading session.
Tuesday's Volume: 969,000
Three-Month Average Volume: 576,378
Volume % Change: 277%
From a technical perspective, TXTR is trending higher here with above-average volume. This move is quickly pushing shares of TXTR within range of triggering a big breakout trade. That trade will hit if TXTR manages to take out some near-term overhead resistance at $32.75 to its 50-day moving average of $34.23 with high volume.
Traders should now look for long-biased trades in TXTR as long as it's trending above Tuesday's low of $29.50 or above more support at $28 and then once it sustains a move or close above those breakout levels with volume that's near or above 576,378 shares. If that breakout hits soon, then TXTR will set up to re-test or possibly take out its next major overhead resistance levels at $38 to $41.50.
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.
RELATED LINKS:
>>The Case for a Correction in Stocks
>>5 Big Tech Stocks to Sell Right Now
>>Invest Like a Venture Capitalist With These 5 Stocks
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