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 today.
Rackspace
Rackspace (RAX) is a provider of cloud computing services, managing Web-based IT systems for small and medium-sized businesses as well as large enterprises. This stock closed up 8.2% to $47.85 in Friday's trading session.
Friday's Volume: 6.79 million
Three-Month Average Volume: 2.36 million
Volume % Change: 205%
Shares of RAX ripped sharply higher on Friday after the company said its second-quarter net income fell 11% as expenses rose, though the results beat analysts' expectations.
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From a technical perspective, RAX gapped up here and broke out above some near-term overhead resistance at $47.26 with heavy upside volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $33.91 to its intraday high on Friday of $49.50. During that uptrend, shares of RAX have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in RAX as long as it's trending above Friday's low of $46.88 and then once it sustains a move or close above Friday's high of $49.50 with volume that hits near or above 2.36 million shares. If we get that move soon, then RAX will set up to re-fill some of its gap down level from May that started at $52.45. If that gap gets filled with volume, then RAX could easily tag $55 to $57.
Advent Software
Advent Software (ADVS) offers software and services that automate work flows and data across investment management organizations, as well as the information flows between an investment management organization and external parties. This stock closed up 3.2% at $28.66 in Friday's trading session.
Friday's Volume: 800,000
Three-Month Average Volume: 380,475
Volume % Change: 80%
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From a technical perspective, ADVS trended up here right above some near-term support at $27.24 with above-average volume. This stock has been uptrending strong for the last three months and change, with shares soaring higher from its low of $19.11 to its recent high of $31.22. During that uptrend, shares of ADVS have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of ADVS recently pulled back from that high of $31.22 to its $27.24 low. This stock now looks ready to resume its uptrend and re-test its recent highs, if some key support levels hold.
Traders should now look for long-biased trades in ADVS as long as it's trending above its recent low of $27.24 or above its 50-day at $26.84 and then once it sustains a move or close above Friday's high of $28.71 with volume that this near or above 380,475 shares. If we get that move soon, then ADVS will set up to re-test or possibly take out its recent high of $31.22. Any high-volume move above $31.22 will then give ADVS a chance to tag $35.
Opentable
Opentable (OPEN) provides solutions that form an online network connecting reservation-taking restaurants and people who dine at those restaurants. This stock closed up 2.8% at $68.81 in Friday's trading session.
Friday's Volume: 742,000
Three-Month Average Volume: 612,662
Volume % Change: 50%
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From a technical perspective, OPEN jumped higher here right above its 50-day moving average of $65.61 with decent upside volume. This move is quickly pushing shares of OPEN within range of triggering a major breakout trade. That trade will hit if OPEN manages to take out some near-term overhead resistance levels at $70.88 to its 52-week high at $72.18 with high volume.
Traders should now look for long-biased trades in OPEN as long as it's trending above its 50-day at $65.61, and then once it sustains a move or close above those breakout levels with volume that's near or above 612,662 shares. If that breakout triggers soon, then OPEN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $75 to $80.
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.
Follow Stockpickr on Twitter and become a fan on Facebook.
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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