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.
Lamar Advertising
Lamar Advertising (LAMR) operates as an outdoor advertising company in the U.S. This stock closed up 5.2% at $52.45 in Wednesday's trading session.
Wednesday's Volume: 6 million
Three-Month Average Volume: 1.22 million
Volume % Change: 384%
From a technical perspective, LAMR ripped sharply higher here back above its 50-day moving average of $51.51 with heavy upside volume. This move is quickly pushing shares of LAMR within range of triggering a big breakout trade. That trade will hit if LAMR manages to take out some near-term overhead resistance levels at $53.35 to its 52-week high at $54.12 with high volume.
Traders should now look for long-biased trades in LAMR as long as it's trending above its 50-day at $51.51 or above Wednesday's low of $49.62 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.22 million shares. If that breakout hits soon, then LAMR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65.
Lydall
Lydall (LDL) designs and manufactures specialty engineered products for the thermal/acoustical, filtration/separation and bio/medical applications worldwide. This stock closed up 3.7% at $22.98 in Wednesday's trading session.
Wednesday's Volume: 181,000
Three-Month Average Volume: 67,511
Volume % Change: 183%
From a technical perspective, LDL jumped higher here with above-average volume. This stock has been consolidating and trending sideways for the last month, with shares moving between $21.50 on the downside and $23.62 on the upside. Shares of LDL are now starting to bounce higher above the lower-end of its range and the stock is quickly moving close to triggering a big breakout trade above the upper-end of its sideways trading chart pattern. That trade will hit if LDL manages to take out Wednesdays' high of $23 to its 52-week high at $23.62 with high volume.
Traders should now look for long-biased trades in LDL as long as it's trending above $22 or above its 50-day at $21.03 and then once it sustains a move or close above those breakout levels with volume that's near or above 67,511 shares. If that breakout hits soon, then LDL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $28 to $30.
Union Pacific
Union Pacific (UNP) provides rail transportation services in the U.S. This stock closed up 1.4% at $188.15 in Wednesday's trading session.
Wednesday's Volume: 3.63 million
Three-Month Average Volume: 2.13 million
Volume % Change: 82%
From a technical perspective, UNP rose modestly higher here right above its 50-day moving average of $182.95 with above-average volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $147.75 to its recent high of $190.48. During that move, shares of UNP have making mostly higher lows and higher highs, which is bullish technical price action. This spike higher on Wednesday is now starting to push shares of UNP within range of triggering a big breakout trade. That trade will hit if UNP manages to take out Wednesday's high of $188.54 to some more near-term overhead resistance levels at $190 to its 52-week high at $190.48 with high volume.
Traders should now look for long-biased trades in UNP as long as it's trending above its 50-day at $182.95 or above its recent low of $180.72 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.13 million shares. If that breakout triggers soon, then UNP will set up to enter new 52-week-high territory above $190.48, which is bullish technical price action. Some possible upside targets off that breakout are $200 to $210.
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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