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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Clearfield
Clearfield (CLFD) manufactures, markets and sells standard and custom passive connectivity products to the fiber-to-the-premises, large enterprises and original equipment manufacturers markets in the U.S. This stock closed up 3.4% to $14.30 in Wednesday's trading session.
Wednesday's Volume: 217,000
Three-Month Average Volume: 94,866
Volume % Change: 175%
From a technical perspective, CLFD jumped higher here right above some near-term support at $13.32 with strong upside volume flows. This trend to the upside on Wednesday is quickly pushing shares of CLFD within range of triggering a major breakout trade. That trade will hit if CLFD manages to take out some key near-term overhead resistance levels at $14.42 to around $15 with high volume.
Traders should now look for long-biased trades in CLFD as long as it's trending above some key near-term support at $13.32 or above its 50-day at $13.03 and then once it sustains a move or close above those breakout levels with volume that hits near or above 94,866 shares. If that breakout triggers soon, then CLFD will set up to re-fill some of its previous gap-down-day zone from July that started just above $16. If that gap gets filled with volume, then shares of CLFD can easily tag its next major overhead resistance levels at $16.66 to its 200-day at $17.50.
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C&J Energy Services
C&J Energy Services (CJES), through its subsidiaries, provides hydraulic fracturing, coiled tubing, wireline and other complementary services to oil and gas exploration and production companies in the U.S. This stock closed up 5.3% to $18.97 in Wednesday's trading session.
Wednesday's Volume: 3.01 million
Three-Month Average Volume: 1.29 million
Volume % Change: 195%
From a technical perspective, CJES ripped higher here right above its new 52-week low of $17.32 with strong upside volume flows. This stock has been downtrending badly for the last month, with shares crashing from its high of $31.53 to its recent low of $17.32. During that move, shares of CJES have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CJES have now started to rebound off that $17.32 low and it's starting to move within range of triggering a big breakout trade. That trade will hit if CJES manages to take out Wednesday's intraday high of $19.56 to around $21, and then once it clears $21.49 to $21.58 with high volume.
Traders should now look for long-biased trades in CJES as long as it's trending above Wednesday's intraday low of $17.95 or above its new 52-week low of $17.32 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.29 million shares. If that breakout hits soon, then CJES will set up to re-test or possibly take out its next major overhead resistance levels at around $23 to $25, or even its 50-day moving average of $25.81.
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Inphi
Inphi (IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter and computing markets worldwide. This stock closed up 5.1% at $15.20 in Wednesday's trading session.
Wednesday's Volume: 1.04 million
Three-Month Average Volume: 226,643
Volume % Change: 402%
From a technical perspective, IPHI ripped sharply higher here right off both its 50-day moving average at $14.42 and its 200-day at $14.40 with monster upside volume flows. This move briefly pushed shares of IPHI into breakout territory, since the stock flirted with or took out some near-term overhead resistance levels at $14.95 to $15.45. Shares of IPHI tagged an intraday high of $15.89, before it closed just off that level at $15.20. Market players should now look for a continuation move to the upside in the short-term if IPHI manages to clear Wednesday's intraday high of $15.89 with high volume.
Traders should now look for long-biased trades in IPHI as long as it's trending above its 200-day at $14.40 or above more near-term support at $14 and then once it sustains a move or close above $15.89 with volume that hits near or above 226,643 shares. If that move gets started soon, then IPHI will set up to re-test or possibly take out its 52-week high at $17.17. Any high-volume move above $17.17 will then give IPHI a chance to tag $20.
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Wright Medical Group
Wright Medical Group (WMGI), a specialty orthopaedic company, provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients lifestyles. This stock closed up 3.1% to $32.32 in Wednesday's trading session.
Wednesday's Volume: 3.96 million
Three-Month Average Volume: 700,826
Volume % Change: 444%
From a technical perspective, WMGI ripped higher here right above its 50-day at $30.80 and its 200-day at $30.74 with strong upside volume flows. This move briefly pushed shares of WMGI into breakout territory, since the stock flirted with some key overhead resistance at $32.57. Shares of WMGI tagged an intraday high of $32.65, before it closed just below that level at $32.32. This move higher on Wednesday is now starting to push shares of WMGI within range of triggering another big breakout trade. That trade will hit if WMGI manages to clear Wednesday's intraday high of $32.65 to its 52-week high at $33.80 with high volume.
Traders should now look for long-biased trades in WMGI as long as it's trending above Wednesday's intraday low of $31.23 or above some more key near-term support at $29.58 and then once it sustains a move or close above those breakout levels with volume that hits near or above 700,826 shares. If that breakout gets underway soon, then WMGI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.
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To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
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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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