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.
HMS Holdings
HMS Holdings (HMSY) provides cost containment services to government and private healthcare payers and sponsors. This stock closed up 5.4% at $17.52 in Wednesday's trading session.
Wednesday's Volume: 2.01 million
Three-Month Average Volume: 975,571
Volume % Change: 118%
From a technical perspective, HMSY spiked sharply higher here right above some near-term support at $16 with above-average volume. This spike higher on Wednesday pushed shares of HMSY into breakout territory, since this stock took out some near-term overhead resistance at $17. Market players should now look for a continuation move higher in the short-term if HMSY manages to take out Wednesday's high of $17.67 to its 50-day moving average of $18.06 with strong upside volume.
Traders should now look for long-biased trades in HMSY as long as it's trending above support at $16 and then once it sustains a move or close above $17.67 to $18.06 with volume that hits near or above 975,571 shares. If that move starts soon, then HMSY will set up to re-test or possibly take out its next major overhead resistance levels at $19 to $21, or even its 200-day moving average of $21.51.
Imperva
Imperva (IMPV) develops, markets, sells, services and supports data center security solutions that protect high value applications and data assets in physical and virtual data centers. This stock closed up 7% to $20.75 in Wednesday's trading session.
Wednesday's Volume: 1.11 million
Three-Month Average Volume: 673,802
Volume % Change: 103%
From a technical perspective, IMPV trended sharply higher here right above its 52-week low of $18.40 with above-average volume. This stock recently gapped down sharply from around $50 to under $30 with heavy downside volume. Following that move, shares of IMPV have continued to trend lower with the stock tagging its recent 52-week low of $18.40. That move has now pushed shares of IMPV into extremely oversold territory, since its current relative strength index reading is 24. Oversold can always get more oversold, but it's also an area where a stock can experience a powerful bounce higher from. That bounce is now underway, so market players should look for a continuation move to the upside if IMPV can manage to take out Wednesday's intraday high of $21.18 with strong volume.
Traders should now look for long-biased trades in IMPV as long as it's trending above Wednesday's low of $19.51 or above its 52-week low of $18.40 and then once it sustains a move or close above Wednesday's high of $21.18 with volume that hits near or above 673,802 shares. If that move kicks off soon, then IMPV could rebound higher back towards its next major overhead resistance levels at $23 to $25. Any high-volume move above those levels will then give IMPV a chance to tag $27.
World Wrestling Entertainment
World Wrestling Entertainment (WWE), an integrated media and entertainment company, is engaged in the sports entertainment business worldwide. This stock closed up 5.1% at $19.35 in Wednesday's trading session.
Wednesday's Volume: 4.19 million
Three-Month Average Volume: 1.64 million
Volume % Change: 196%
From a technical perspective, WWE spiked sharply higher here right above its 200-day moving average of $16.94 with above-average volume. This stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $31.98 to its recent low of $17.14. That low corresponded with WWE's 200-day moving average, which for now has held. Market players should now look for a continuation move to the upside in the short-term if WWE manages to take out Wednesday's intraday high of $19.90 to some more near-term overhead resistance at $20.86 with high volume.
Traders should now look for long-biased trades in WWE as long as it's trending above Wednesday's low of $17.69 or above its 200-day at $16.94 and then once it sustains a move or close above $19.90 to $20.86 with volume that this near or above 1.64 million shares. If that move materializes soon, then WWE will set up to re-test or possibly take out its next major overhead resistance levels at $22 to $23.19, or its 50-day moving average of $24.49.
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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