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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Phillip Morris
Phillip Morris (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. This stock closed up 0.58% to $86.05 in Monday's trading session.
Monday's Volume: 6.96 million
Three-Month Average Volume: 4.22 million
Volume % Change: 68%
From a technical perspective, PM trended modestly higher here right above its 50-day moving average of $84.53 with above-average volume. This spike to the upside on Monday also pushed shares of PM into breakout territory, since the stock took out some near-term overhead resistance at $85.90. Shares of PM are now starting to trend within range of triggering another breakout trade. That trade will hit if PM manages to clear some near-term overhead resistance levels at $86.57 to $86.77 and then above $87 with high volume.
Traders should now look for long-biased trades in PM as long as it's trending above its 50-day at $84.53 or above its 200-day at $82.91 and then once it sustains a move or close above those breakout levels with volume that hits near or above 4.22 million shares. If that breakout begins soon, then PM will set up to re-fill some of its previous gap-down-day zone from June that started just above $89 or even its 52-week high at $91.81.
As of the most recently reported quarter, Philip Morris was one of the top holdings at Renaissance Technologies. It was featured recently in on RealMoney in "Philip Morris Looks Mighty Tempting."
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Lannett
Lannett (LCI), develops, manufactures, packages, markets and distributes generic versions of branded pharmaceutical products in the U.S. This stock closed up 5.1% to $43.46 in Monday's trading session.
Monday's Volume: 1.15 million
Three-Month Average Volume: 642,678
Volume % Change: 73%
From a technical perspective, LCI spiked sharply higher here right above some near-term support at $40 with above-average volume. This spike to the upside on Monday also pushed shares of LCI into breakout territory, since the stock took out some previous overhead resistance at $41.77. Market players should now look for a continuation move to the upside in the short-term if LCI manages to clear Monday's intraday high of $43.67 and then above its gap-down-day high from July at $44.50 with high volume.
Traders should now look for long-biased trades in LCI as long as it's trending above some near-term support at $40 or above its 50-day moving average of $38.18 and then once it sustains a move or close above $43.67 to $44.50 with volume that hits near or above 642,678 shares. If that move kicks off soon, then LCI will set up to re-fill some more of its previous gap-down-day zone from July that started at $47.89. Any high-volume move above $47.89 will then give LCI a chance to re-test its 52-week high at $51.66.
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Thoratec
Thoratec (THOR) develops, manufactures and markets proprietary medical devices used for mechanical circulatory support for the treatment of heart failure patients. This stock closed up 6.1% at $27.74 in Monday's trading session.
Monday's Volume: 4.42 million
Three-Month Average Volume: 939,902
Volume % Change: 320%
From a technical perspective, THOR ripped sharply higher here right above some near-term support at $25 with monster upside volume. This sharp spike to the upside on Monday also pushed shares of THOR back above its 50-day moving average of $27.64 and into its previous gap-down-day zone from August that started at $32.22. Traders should now look for a continuation move to the upside and into that gap if THOR can manage to clear Monday's intraday high of $27.92 with high volume.
Traders should now look for long-biased trades in THOR as long as it's trending above Monday's intraday low of $25.60 and then once it sustains a move or close above $27.92 with volume that hits near or above 939,902 shares. If that move materializes soon, then TROV will set up to re-fill some more of its previous gap-down-day zone from August that started at $33.22. Some possible upside targets if THOR gets into that gap with volume are $30 to $32.
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LDR Holding
LDR Holding (LDRH), a medical device company, focuses on designing and commercializing various surgical technologies for the treatment of patients suffering from spine disorders in the U.S., France and internationally. This stock closed up 2.1% at $30.42 in Monday's trading session.
Monday's Volume: 296,000
Three-Month Average Volume: 217,017
Volume % Change: 50%
From a technical perspective, LDRH trended modestly higher here right above some near-term support at $28 with above-average volume. This stock recently broke out above some key overhead resistance levels at $28.41 to $28.48 with decent upside volume flows. Market players should now look for a continuation move to the upside in the short-term if LDRH manages to take out Monday's intraday high of $30.79 with high volume.
Traders should now look for long-biased trades in LDRH as long as it's trending above some key near-term support at $28 and then once it sustains a move or close above $30.79 with volume that's near or above 217,017 shares. If that move gets underway soon, then LDRH will set up to re-test or possibly take out its next major overhead resistance levels at $34.50 to $38.
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Computer Task Group
Computer Task Group (CTG) operates as an information technology solutions and staffing services company in North America and Europe. This stock closed up 2.2% at $11.94 in Monday's trading session.
Monday's Volume: 153,000
Three-Month Average Volume: 64,461
Volume % Change: 95%
From a technical perspective, CTG jumped notably higher here right above its new 52-week low of $11.51 with above-average volume. This stock has been downtrending badly for the last two months and change, with shares falling sharply from its high of $17.38 to its new 52-week low of $11.51. During that downtrend, shares of CTG have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CTG have now started to spike higher off that 52-week low and off oversold territory, since its current relative strength index reading is 32.87.
Traders should now look for long-biased trades in CTG as long as it's trending above its 52-week low of $11.51 and then once it sustains a move or close above Monday's intraday high of $12.22 to some more near-term overhead resistance at $12.50 with volume that's near or above 64,461 shares. If that move gets started soon, then CTG will set up to re-test or possibly take out its next major overhead resistance levels at $13 to its 50-day moving average of $13.54, or even $14 to $14.50.
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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