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.
Hyperion Therapeutics
Hyperion Therapeutics (HPTX), a commercial biopharmaceutical company, focuses on the development and commercialization of therapeutics to treat disorders in the areas of orphan diseases and hepatology. This stock closed up 2.8% to $25.96 in Wednesday's trading session.
Wednesday's Volume: 192,000
Three-Month Average Volume: 97,075
Volume % Change: 100%
From a technical perspective, HPTX spiked higher here back above both its 200-day moving average of $25.48 and its 50-day moving average of $25.80 with high volume. This uptick higher on Wednesday is starting to push shares of HPTX within range of triggering a near-term breakout trade. That trade will hit if HPTX manages to take out Wednesday's intraday high of $26.10 to some more near-term overhead resistance at $26.77 with high volume.
Traders should now look for long-biased trades in HPTX as long as it's trending above some key near-term support levels at $25 or at $24.42 and then once it sustains a move or close above those breakout levels with volume that hits near or above 97,075 shares. If that breakout hits soon, then HPTX will set up to re-test or possibly take out its next major overhead resistance levels at $30.21 to its 52-week high of $32.98.
Media General
Media General (MEG) owns and operates broadcast television stations and related Web sites and mobile news applications in the U.S. This stock closed up 10% at $20.33 in Wednesday's trading session.
Wednesday's Volume: 2.68 million
Three-Month Average Volume: 448,132
Volume % Change: 546%
From a technical perspective, MEG soared sharply higher here and broke out above some key overhead resistance levels at $19 to $19.62 with monster upside volume. This breakout followed a major bottoming chart pattern for MEG that formed over the last month at $17 to $17.60. Market players should now look for a continuation move to the upside in the short-term if MEG manages to take out Wednesday's intraday high of $20.57 with strong upside volume flows.
Traders should now look for long-biased trades in MEG as long as it's trending above Wednesday's low of $18.64 or above $18 and then once it sustains a move or close above $20.57 with volume that this near or above 448,132 shares. If that move begins soon, then MEG will set up to re-test or possibly take out its next major overhead resistance levels at $23 to its 52-week high of $23.97.
Novadaq Technologies
Novadaq Technologies (NVDQ) develops, manufactures and commercializes fluorescence imaging products and therapeutic devices for use by surgeons in the operating room and other clinical settings where open and minimally invasive surgery or interventional procedures are performed. This stock closed up 5.3% at $16.01 in Wednesday's trading session.
Wednesday's Volume: 950,000
Three-Month Average Volume: 468,942
Volume % Change: 195%
From a technical perspective, NVDQ ripped higher here back above its 50-day moving average of $15.73 with strong upside volume flows. This spike higher on Wednesday is starting to push shares of NVDQ within range of triggering a near-term breakout trade. That trade will hit if NVDQ manages to take out some key near-term overhead resistance levels at $16.54 to $16.75 and then once it clears its 200-day moving average of $17.46 with high volume.
Traders should now look for long-biased trades in NVDQ as long as it's trending above some near-term support at $15 and then once it sustains a move or close above those breakout levels with volume that hits near or above 468,942 shares. If that breakout materializes soon, then NVDQ will set up to re-test or possibly take out its next major overhead resistance levels at $18.45 to $21.
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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