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.
Carbonite
Carbonite (CARB) provides cloud backup solutions with access to files stored in its servers in the U.S. This stock closed up 4% at $10.75 in Friday's trading session.
Friday's Volume: 185,360
Three-Month Average Volume: 104,034
Volume % Change: 50%
From a technical perspective, CARB ripped higher here right off some near-term support at $10.25 with above-average volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $9.17 to its intraday high of $10.85. During that uptrend, shares of CARB have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CARB within range of triggering a near-term breakout trade. That trade will hit if CARB manages to take out Friday's intraday high of $10.85 and then once it clears both its 50-day and 200-day moving average at $11.07 with high volume.
Traders should now look for long-biased trades in CARB as long as it's trending above some near-term support at $10.25 and then once it sustains a move or close above those breakout levels with volume that's near or above 104,034 shares. If that breakout hits soon, then CARB will set up to re-test or possibly take out its next major overhead resistance levels at $12.66 to $13.80.
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Magna International
Magna International (MGA) develops, manufactures, engineers, supplies and sells automotive products. This stock closed up 5.9% at $111.44 in Friday's trading session.
Friday's Volume: 1.06 million
Three-Month Average Volume: 452,925
Volume % Change: 146%
From a technical perspective, MGA ripped sharply higher here back above its 50-day moving average of $108.43 with strong upside volume flows. This strong move to the upside on Friday is quickly pushing shares of MGA within range of triggering a major breakout trade. That trade will hit if MGA manages to take out some key near-term overhead resistance levels at Friday's intraday high of $111.75 to its 52-week high at $112.20 with high volume.
Traders should now look for long-biased trades in MGA as long as it's trending above Friday's intraday low of $107 or above more near-term support at $105 and then once it sustains a move or close above those breakout levels with volume that's near or above 452,925 shares. If that breakout materializes soon, then MGA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $120 to $125.
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Copa Holdings
Copa Holdings (CPA) provides airline passenger and cargo services in Latin America. This stock closed up 4.9% at $133.60 in Friday's trading session.
Friday's Volume: 1.39 million
Three-Month Average Volume: 356,648
Volume % Change: 283%
From a technical perspective, CPA ripped sharply higher here right above some near-term support at $126 with strong upside volume flows. This stock recently gapped down sharply from just over $150 to $126 with heavy downside volume flows. Following that move, shares of CPA have now started to rebound off that $126 low and it's quickly moving within range of triggering a major breakout trade. That trade will hit if CPA manages to take out Friday's intraday high of $133.71 and then once it clears its gap-down-day high of $135.65 with high volume.
Traders should now look for long-biased trades in CPA as long as it's trending above Friday's intraday low of $128.79 and then once it sustains a move or close above those breakout levels with volume that's near or above 356,648 shares. If that breakout begins soon, then CPA will set up to re-fill some of its previous gap-down-day zone that started just above $150.
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Sprouts Farmers Market
Sprouts Farmers Market (SFM) through its subsidiaries, is engaged in the retail of natural and organic food in the U.S. This stock closed up 3.6% at $31.67 in Friday's trading session.
Friday's Volume: 3.03 million
Three-Month Average Volume: 1.32 million
Volume % Change: 171%
From a technical perspective, SFM jumped notably higher here right off its 50-day moving average of $30.91 with above-average volume. This spike to the upside on Friday is quickly pushing shares of SFM within range of triggering a big breakout trade. That trade will hit if SFM manages to take out Friday's intraday high of $32.91 to some more near-term overhead resistance at $33.18 with high volume.
Traders should now look for long-biased trades in SFM as long as it's trending above Friday's intraday low of $30.79 or above more near-term support levels at $30 to $29.11 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.32 million shares. If that breakout gets underway soon, then SFM will set up to re-test or possibly take out its next major overhead resistance levels at $35 to its 200-day moving average of $35.26, or even $36 to $38.
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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