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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Sturm, Ruger
Sturm, Ruger (RGR) designs, manufactures and sells firearms in the U.S. This stock closed up 2.3% at $50.41 in Friday's trading session.
Friday's Volume: 725,000
Three-Month Average Volume: 304,674
Volume % Change: 133%
From a technical perspective, RGR trended higher here right above some near-term support at $48.66 with above-average volume. This stock recently formed a double bottom chart pattern at $47.94 to $48.66. Following that bottom, shares of RGR have now started to spike higher and move within range of triggering a near-term breakout trade. That trade will hit if RGR manages to take out Friday's intraday high of $50.92 to some more key overhead resistance at $51.91 with high volume.
Traders should now look for long-biased trades in RGR as long as it's trending above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 304,674 shares. If that breakout materializes soon, then RGR will set up to re-test or possibly take out its next major overhead resistance level at its gap-down-day high from early August of $54.71. Any high-volume move above that level will then give RGR a chance to re-fill some of its previous gap-down-day zone that started near $58.
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Vasco Data Security International
Vasco Data Security International (VDSI), together with its subsidiaries, designs, develops and markets security systems to secure and manage access to user digital assets worldwide. This stock closed up 4.8% at $14.77 in Friday's trading session.
Friday's Volume: 791,000
Three-Month Average Volume: 348,035
Volume % Change: 114%
From a technical perspective, VDSI ripped higher here right above some near-term support at $14.04 with above-average volume. This strong spike to the upside on Friday is quickly pushing shares of VDSI within range of triggering a big breakout trade. That trade will hit if VDSI manages to take out Friday's intraday high of $14.96 to its 52-week high at $15.17 with high volume.
Traders should now look for long-biased trades in VDSI as long as it's trending above some near-term support at $14.04 or above more support at $13.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 348,035 shares. If that breakout starts soon, then VDSI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $20.
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Amira Nature Foods
Amira Nature Foods (ANFI) is engaged in processing, distributing and marketing packaged specialty rice and other food products. This stock closed u 6.1% at $17.22 in Friday's trading session.
Friday's Volume: 672,000
Three-Month Average Volume: 211,292
Volume % Change: 233%
From a technical perspective ANFI ripped sharply higher here right off its 50-day moving average of $15.87 with above-average volume. This strong push to the upside on Friday also sent shares of ANFI into breakout territory, since this stock took out some key overhead resistance levels at $17 to $17.01. Market players should now look for a continuation move to the upside in the short-term if ANFI manages to clear Friday's intraday high of $17.38 with high volume.
Traders should now look for long-biased trades in ANFI as long as it's trending above its 50-day moving average at $15.87 or above more near-term support at $15 and then once it sustains a move or close above $17.38 with volume that's near or above 211,292 shares. If that move starts to develop soon, then ANFI will set up to re-test or possibly take out its next major overhead resistance levels at $20.29 to around $21. Any high-volume move above those levels will then give ANFI a chance to re-fill some of its previous gap-down-day zone form February that started near $24. z
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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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