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.
Abercrombie & Fitch
Abercrombie & Fitch (ANF), through its subsidiaries, operates as a specialty retailer of casual apparel for men, women and kids. This stock closed up 11.9% at $37.19 in Friday's trading session.
Friday's Volume: 14.15 million
Three-Month Average Volume: 3.53 million
Volume % Change: 345%
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From a technical perspective, ANF gapped up sharply higher here back above its 50-day moving average of $34.08 with heavy upside volume. This move also pushed shares of ANF into breakout territory, since the stock took out some near-term overhead resistance at $36.50. Shares of ANF are now quickly moving within range of triggering another major breakout trade. That trade will hit if ANF manages to take Friday's high of $38.15 to some more key overhead resistance levels at $38.59 to $38.77 with high volume.
Traders should now look for long-biased trades in ANF as long as it's trending above Friday's low of $36.06 and then once it sustains a move or close above those breakout levels with volume that's near or above 3.53 million shares. If that breakout hits soon, then ANF will set up to re-fill some of its previous gap-down-day zone from August that started at $48.
Sonoco Products
Sonoco Products (SON) engages in the manufacture and sale of industrial and consumer packaging products in the U.S., Europe, Canada and other regions. This stock closed up 2.2% at $43.25 in Friday's trading session.
Friday's Volume: 1.67 million
Three-Month Average Volume: 405,848
Volume % Change: 313%
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From a technical perspective, SON jumped higher here right above some near-term support levels at $42 to $41 with above-average volume. This stock has been uptrending strong for the last four months and change, with shares soaring higher from its low of $36.31 to its recent high of $43.75. During that uptrend, shares of SON have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SON within range of triggering a big breakout trade. That trade will hit if SON manages to take out Friday's high of $43.50 to its 52-week high at $45.75 with high volume.
Traders should now look for long-biased trades in SON as long as it's trending above Friday's low of $42.21 or above more support at $41 and then once it sustains a move or close above those breakout levels with volume that this near or above 405,848 shares. If that breakout hits soon, then SON will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $48 to $50.
Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (IRWD), an entrepreneurial pharmaceutical company, discovers, develops, and commercializes human therapeutic products. This stock closed up 4.4% to $12.94 in Friday's trading session.
Friday's Volume: 3.62 million
Three-Month Average Volume: 985,160
Volume % Change: 306%
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From a technical perspective, IRWD spiked sharply higher here right above its 200-day moving average of $12.32 with strong upside volume. This move is quickly pushing shares of IRWD within range of triggering a big breakout trade. That trade will hit if IRWD manages to take out Friday's high of $13.48 to some more key overhead resistance levels at $13.95 to $13.97 with high volume.
Traders should now look for long-biased trades in IRWD as long as it's trending above its 200-day at $12.32 or above $12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 985,160 shares. If that breakout triggers soon, then IRWD will set up to re-test or possibly take out its next major overhead resistance levels at $16 to $17.
LifeLock
LifeLock (LOCK) provides identity theft protection services for consumers; and identity risk assessment and fraud protection services for enterprises in the U.S. This stock closed up 5.1% to $17.50 in Friday's trading session.
Friday's Volume: 1.42 million
Three-Month Average Volume: 825,494
Volume % Change: 125%
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From a technical perspective, LOCK ripped sharply higher here right off its 50-day moving average of $16.48 with strong upside volume. This move pushed shares of LOCK into breakout territory, since the stock took out some near-term overhead resistance at $17.16. Shares of LOCK are now quickly moving within range of triggering another big breakout trade. That trade will hit if LOCK manages to take out Friday's high of $17.58 to its all-time high at $17.79 with high volume.
Traders should now look for long-biased trades in LOCK as long as it's trending above its 50-day moving average of $16.48 or above $16 and then once it sustains a move or close above those breakout levels with volume that hits near or above 825,494 shares. If that breakout hits soon, then LOCK will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $23 to $25.
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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