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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Bruker
Bruker (BRKR), together with its subsidiaries, designs, manufactures, sells and services proprietary life science and materials research systems and associated products worldwide. This stock closed up 3.8% to $19.23 in Friday's trading session.
Friday's Volume: 3.99 million
Three-Month Average Volume: 795,100
Volume % Change: 395%
From a technical perspective, BRKR jumped higher here right above some near-term support at $18.41 with heavy upside volume flows. This stock has been downtrending badly for the last three months, with shares falling sharply from its high of $24.90 to its recent low of $18.41. During that downtrend, shares of BRKR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BRKR have now started to rebound off that $18.41 low with massive upside volume, and a trend change could now be developing for shares of BRKR. Market players should now look for a continuation move to the upside in the short-term if BRKR manages to take out Friday's intraday high of $19.27 with strong volume.
Traders should now look for long-biased trades in BRKR as long as it's trending above that recent low of $18.41 and then once it sustains a move or close above $19.27 with volume that hits near or above 795,100 shares. If that move gets underway soon, then BRKR will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $20.45 or its 200-day moving average at $21.50. Any high-volume move above those levels will then give BRKR a chance to tag $23.
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Asbury Automotive Group
Asbury Automotive Group (ABG) operates as an automotive retailer in the U.S. This stock closed up 5% at $68.75 in Friday's trading session.
Friday's Volume: 646,000
Three-Month Average Volume: 267,866
Volume % Change: 136%
From a technical perspective, ABG ripped higher here back above its 50-day moving average of $68.24 with above-average volume. Market players should now look for a continuation move to the upside in the short-term if ABG manages to take out Friday's intraday high of $68.87 and then above more near-term overhead resistance at $70 with high volume.
Traders should now look for long-biased trades in ABG as long as it's trending above Friday's intraday low of $65.52 or above more key near-term support at $63.04 and then once it sustains a move or close above $68.87 to $70 with volume that's near or above 267,866 shares. If that move kicks off soon, then ABG will set up to re-test or possibly take out its next major overhead resistance levels at $72.96 to its 52-week high at $73.35. Any high-volume move above $73.35 will then give ABG a chance to tag $75 to $80.
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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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