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.
AeroVironment
AeroVironment (AVAV) designs, develops, produces, supports and operates unmanned aircraft systems, tactical missile systems, and efficient energy systems in the U.S. and internationally. This stock closed up 5.6% to $35.33 in Monday's trading session.
Monday's Volume: 841,000
Three-Month Average Volume: 327,116
Volume % Change: 149%
From a technical perspective, AVAV ripped sharply higher here right above its 50-day moving average of $32.76 with strong upside volume flows. This sharp spike higher on Tuesday is quickly pushing shares of AVAV within range of triggering a big breakout trade. That trade will hit if AVAV manages to take out some near-term overhead resistance levels at $36.45 to $36.50 and then once it clears some past resistance levels at $36.97 to $37.90 with high volume.
Traders should now look for long-biased trades in AVAV as long as it's trending above Monday's intraday low of $33.43 or above its 50-day at $32.76 and then once it sustains a move or close above those breakout levels with volume that hits near or above 327,116 shares. If that breakout gets underway soon, then AVAV will set up to re-test or possibly take out its next major overhead resistance level at it 52-week high of $41.67.
Pacific Ethanol
Pacific Ethanol (PEIX) produces and markets low-carbon renewable fuels in the U.S. This stock closed up 8.2% to $16.98 in Monday's trading session.
Monday's Volume: 2.51 million
Three-Month Average Volume: 1.21 million
Volume % Change: 144%
From a technical perspective, PEIX ripped sharply to the upside here and broke out above some key overhead resistance levels at $16.08 to $16.29 with high volume. This big move to the upside on Monday is now starting to push shares of PEIX within range of triggering another big breakout trade. That trade will hit if PEIX manages to take out Monday's intraday high of $17.35 to its 52-week high at $18.65 with high volume.
Traders should now look for long-biased trades in PEIX as long as it' trending above Monday's intraday low of $15.85 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.21 million shares. If that breakout materializes soon, then PEIX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $25.
Imperial Oil
Imperial (IMO) is engaged in the exploration for and the production and sale of crude oil and natural gas in Canada. This stock closed up 0.97% at $53.21 in Monday's trading session.
Monday's Volume: 629,000
Three-Month Average Volume: 182,885
Volume % Change: 206%
From a technical perspective, IMO rose modestly higher here right around some near-term support at $52.84 to $52 with above-average volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $39.98 to its recent high of $54.09. During that uptrend, shares of IMO have been consistently making higher lows and higher highs, which is bullish technical price action. This move higher on Monday is starting to push shares of IMO within range of triggering a near-term breakout trade. That trade will hit if IMO manages to take out some near-term overhead resistance levels at $53.50 to its 52-week high at $54.09 with high volume.
Traders should now look for long-biased trades in IMO as long as it's trending above some near-term support levels at $51.61 or at its 50-day at $50.70 and then once it sustains a move or close above those breakout levels with volume that hits near or above 182,885 shares. If that breakout kicks off soon, then IMO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65.
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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