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.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
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Spirit Airlines
Spirit Airlines (SAVE) provides low-fare airline services, operating approximately 250 daily flights to 50 destinations in the U.S., Caribbean and Latin America. This stock closed up 3.8% at $58.96 in Monday's trading session.
Monday's Volume: 3.19 million
Three-Month Average Volume: 956,275
Volume % Change: 207%
From a technical perspective, SAVE ripped higher here with strong upside volume flows. This stock has been under heavy selling pressure over the last month and change, with shares falling from its high of $74 to its recent low of $52.75. That downtrend has produced multiple trading sessions of violent downside volatility, as shares were consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of SAVE have now started to rebound off that $52.75 low and it's starting to move within range of triggering a near-term breakout trade. That trade will hit if SAVE manages to take out Monday's intraday high of $58.99 to its 200-day moving average of $60.25 with high volume.
Traders should now look for long-biased trades in SAVE as long as it's trending above Monday's intraday low of $56.83 and then once it sustains a move or close above those breakout levels with volume that's near or above 956,275 shares. If that breakout develops soon, then SAVE will set up to re-fill its previous gap-down-day zone from earlier this month that started near $66.
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Gannett
Gannett (GCI) operates as a media and marketing solutions company in the U.S. and internationally. This stock closed up 5% at $29.08 in Monday's trading session.
Monday's Volume: 4.65 million
Three-Month Average Volume: 2.28 million
Volume % Change: 125%
From a technical perspective, GCI ripped sharply higher here above-average volume. This spike higher on Monday is quickly pushing shares of GCI within range of triggering a near-term breakout trade. That trade will hit if GCI manages to take out its 200-day moving average of $29.37 to some more resistance at $29.80 with high volume.
Traders should now look for long-biased trades in GCI as long as it's trending above Monday's intraday low of $27.85 or above $27 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.28 million shares. If that breakout gets underway soon, then GCI will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $31.47 to $32.90. Any high-volume move above those levels will then give GCI a chance to tag $34.
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Olympic Steel
Olympic Steel (ZEUS) processes and distributes metal products primarily in the U.S., Canada, Puerto Rico and Mexico. This stock closed up 1.9% at $19.07 in Monday's trading session.
Monday's Volume: 60,000
Three-Month Average Volume: 36,985
Volume % Change: 85%
From a technical perspective, ZEUS trended modestly higher here with above-average volume. This stock has been downtrending over the last month and change, with shares moving lower from its high of $24.35 to its new 52-week low of $17. During that move, shares of ZEUS have been consistently making lower highs and lower lows, which is bearish technical price action. That sharp downside volatility pushed shares of ZEUS into extremely oversold territory, since its relative strength index reading tagged a reading of 10. Shares of ZEUS have now started to bounce off oversold levels and it's now quickly moving within range of triggering a near-term breakout trade. That trade will hit if ZEUS manages to take out some near-term overhead resistance levels at $19.54 to $20.41 with high volume.
Traders should now look for long-biased trades in ZEUS as long as it's trending above some near-term support levels at $18 or above its 52-week low of $17 and then once it sustains a move or close above those breakout levels with volume that's near or above 36,985 shares. If that breakout develops soon, then ZEUS will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $21.78 or $23.
-- 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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