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.
Post
Post (POST) manufactures, markets and distributes ready-to-eat cereals, snacks and active nutrition products in the U.S. and Canada. This stock closed up 5.6% to $54.73 in Wednesday's trading session.
Wednesday's Volume: 1.72 million
Three-Month Average Volume: 576,016
Volume % Change: 202%
From a technical perspective, POST ripped higher here right above its recent low of $50.45 with strong upside volume. This move briefly pushed shares of POST back above its 50-day moving average of $55.52, before the stock closed just below that level at $54.73. Shares of POST are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if POST manages to take out some near-term overhead resistance levels at $55.71 to Wednesday's high of $55.76 with high volume.
Traders should now look for long-biased trades in POST as long as it's trending above Wednesday's low of $51.83 and then once it sustains a move or close above those breakout levels with volume that hits near or above 576,016 shares. If that breakout materializes soon, then POST will set up to re-test or possibly take out its next major overhead resistance levels at $59.97 to its 52-week high at $60.63.
SodaStream International
SodaStream International (SODA) engages in the development, manufacture and sale of home beverage carbonation systems that enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. This stock closed up 8.1% at $40.75 in Wednesday's trading session.
Wednesday's Volume: 3.98 million
Three-Month Average Volume: 1.55 million
Volume % Change: 143%
From a technical perspective, SODA gapped up sharply higher here and closed right on its 50-day moving average of $40.75 with strong upside volume. This gap is coming after shares of SODA recently pulled back from $45.20 to its recent low of $37.16. That low occurred right near some previous support at $37. Market players should now look for a continuation move higher in the short-term if SODA manages to take out Wednesday's high of $42.25 to more resistance at $42.50 with strong volume.
Traders should now look for long-biased trades in SODA as long as it's trending above Wednesday's low of $40.20 or above $39 and then once it sustains a move or close above $42.25 to $42.50 with volume that this near or above 1.55 million shares. If that move materializes soon, then SODA will set up to re-test or possibly take out its next major overhead resistance level at $45.20. Any high-volume move above $45.20 will then give SODA a chance to re-fill some of its previous gap-down-day zone from January that started just above $50.
Voxeljet AG
Voxeljet AG (VJET) provides three-dimensional printers and on-demand parts services to industrial and commercial customers. This stock closed up 9.2% at $16.17 in Wednesday's trading session.
Wednesday's Volume: 1.36 million
Three-Month Average Volume: 541,534
Volume % Change: 165%
From a technical perspective, VJET skyrocketed sharply higher here right above some near-term support at $14.06 with strong upside volume. This stock has been downtrending badly over the last month and change, with shares moving lower from its high of $37.49 to its recent low of $14.06. During that slide, shares of VJET have been consistently making lower highs and lower lows, which is bearish technical price action. That move pushed shares of VJET into oversold territory, since its current relative strength index reading is 23.60. Shares of VJET are now starting to rip higher off oversold levels and it has started to trade inside of its gap-down-day zone from earlier this month that started above $20.
Traders should now look for long-biased trades in VJET as long as it's trending above Wednesday's low of $14.90 and then once it sustains a move or close above Wednesday's high of $16.65 with volume that hits near or above 541,534 shares. If we get that move soon, then VJET will set up to re-fill some more of that gap-down-day zone that started just above $20.
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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