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.
LIN Media
LIN Media (LIN), together with its subsidiaries, operates as a local multimedia company in the U.S. This stock closed up 5.7% at $27.25 in Wednesday's trading session.
Wednesday's Volume: 2.30 million
Three-Month Average Volume: 392,027
Volume % Change: 333%
From a technical perspective, LIN spiked sharply higher here right above its 50-day moving average of $24.93 with heavy upside volume. This move pushed shares of LIN into breakout territory, since the stock took out some key near-term overhead resistance levels at $26.34 to $27. Shares of LIN are now starting to move within range of triggering another big breakout trade. That trade will hit if LIN manages to take out Wednesday's intraday high of $27.60 to some more key overhead resistance at $28.28 to its 52-week high of $29.24 with high volume.
Traders should now look for long-biased trades in LIN as long as it's trending above $26.34 or above $25 and then once it sustains a move or close above those breakout levels with volume that's near or above 392,027 shares. If that breakout kicks off soon, then LIN will set up to enter new 52-week-high territory above $29.24, which is bullish technical price action. Some possible upside targets off that breakout are $33 to $35.
Best Buy
Best Buy (BBY) operates as a multi-national, multi-channel retailer of technology products in the U.S., Canada, China and Mexico. This stock closed up 5.1% at $30.56 in Wednesday's trading session.
Wednesday's Volume: 8.04 million
Three-Month Average Volume: 5.27 million
Volume % Change: 185%
From a technical perspective, BBY ripped sharply higher here right above some near-term support at $28.11 with strong upside volume flows. This spike higher on Wednesday pushed shares of BBY into breakout territory, since the stock took out some near-term overhead resistance at $29.64. This move higher on Wednesday also pushed shares of BBY into its previous gap-down-day zone from January that started just above $36. Market players should now look for a continuation move to the upside in the short-term if BBY manages to take out Wednesday's intraday high of $30.67 with high volume.
Traders should now look for long-biased trades in BBY as long as it's trending above Wednesday's low of $28.75 or above more support at $28.11 and then once it sustains a move or close above $30.67 with volume that's near or above 5.27 million shares. If we get that move soon, then BBY will set up to re-fill some more of its previous gap-down-day zone from January that started just above $36.
IXYS
IXYS (IXYS), an integrated semiconductor company, designs, develops, manufactures and markets power semiconductors, digital and analog integrated circuits (ICs), and systems and radio frequency power semiconductors worldwide. This stock closed up 7.9% at $12.32 in Wednesday's trading session.
Wednesday's Volume: 952,000
Three-Month Average Volume: 113,942
Volume % Change: 726%
From a technical perspective, IXYS gapped up sharply higher here with monster upside volume. This big gap higher on Wednesday pushed shares of IXYS into breakout territory, since the stock cleared some key near-term overhead resistance levels at $11.47 to $12. Market players should now look for a continuation move to the upside in the short-term if IXYS can manage to take out Wednesday's intraday high of $12.40 with high volume.
Traders should now look for long-biased trades in IXYS as long as it's trending above Wednesday's low of $11.78 or above its 200-day at $11.47 and then once it sustains a move or close above $12.40 with volume that's near or above 113,942 shares. If that move starts soon, then IXYS will set up to re-test or possibly take out its next major overhead resistance levels at $13 to $14, or even its 52-week high of $14.95.
Diamondback Energy
Diamondback Energy (FANG), an independent oil and natural gas company, focuses on the acquisition, development, exploration and exploitation of onshore oil and natural gas reserves in the Permian Basin in West Texas. This stock closed up 3.2% at $90.56 in Wednesday's trading session.
Wednesday's Volume: 1.90 million
Three-Month Average Volume: 1.06 million
Volume % Change: 76%
From a technical perspective, FANG jumped notably higher here right above some near-term support at $87.15 with above-average volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $44.02 to its recent high of $93.33. During that uptrend, shares of FANG have been making mostly higher lows and higher highs, which is bullish technical price action. This spike higher on Wednesday is starting to push shares of FANG within range of triggering a near-term breakout trade. That trade will hit if FANG manages to take out Wednesday's intraday high of $91.36 to its all-time high of $93.33 with high volume.
Traders should now look for long-biased trades in FANG as long as it's trending above some key near-term support at $87.15 or at more support at $85 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.06 million shares. If that breakout kicks off soon, then FANG will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $100 to $105, or even $110.
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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