Professional traders that run mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Many times when above-average volume moves into equity, it precedes a large spike in volatility.
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. Let’s take a look at a several stocks rising on unusual volume today. They are all recording volume in midday trading that is already at least 50% above their average trading volume for a full day.
ServiceSource International(SREV) is engaged in service revenue management, providing solutions that drive renewals of maintenance, support and subscription agreements for technology companies. The stock is trading up 10% at $14.17 in recent trading. Today’s Volume: 1,780,000Average Volume: 717,517Volume % Change: 315%This stock is spiking big today after the company reported better-than-expected results for the third quarter. ServiceSource reported third-quarter revenue of $51.5 million, which was well above Wall Street estimates of $48.5 million. From a technical standpoint, this stock is triggering a breakout today now that it has started to move above some past overhead resistance at $13.73 and above its 50-day moving average of $14.04 on monster volume. >>5 Stocks Setting Up to Break OutTraders should now watch for a sustained move and close over both of those levels to set this stock up to re-test its next significant overhead resistance at $15.42. If $15.42 is then taken out with volume, look for this stock to setup for a run towards $17.50 to $20 a share.
TPC Group(TPCG) is a producer of value-added products derived from petrochemical raw materials, such as four-carbon hydrocarbons. The stock is trading up 11% at $22.08 in recent trading. Today’s Volume: 432,000Average Volume: 176,102Volume % Change: 322%This stock is ramping today after the company reported a 67% increase in third-quarter revenue at $835 million, which was well above the prior year quarter of $499 million, on a 9% increase in overall sales volume. From a technical standpoint, this stock is just starting to move back above its 50-day moving average of $21.81 on monster volume. Traders should now watch for a sustained move and close above the 50-day and above the next significant overhead resistance levels at $21.27 and $22.82 on high volume. If we see that action, then this stock sets up for a monster move that could see shares trade up to its next significant overhead resistance at $26.80, or possibly even towards the 200-day moving average of $31.31. TPC Group is one of TheStreet Ratings’ top-rated chemical stocks.
Green Mountain Coffee Roasters
Green Mountain Coffee Roasters(GMCR) is engaged in the specialty coffee and coffee maker businesses. The stock is trading up 6% at $43.45 in recent trading. Today’s Volume: 14,200,000Average Volume: 6,355,590Volume % Change: 267%From a technical standpoint, this stock is starting to bounce off of oversold levels after gapping down big on a bearish earnings report earlier in the week. The current relative strength index reading is below 30 at 27.46, which indicates an oversold stock. Oversold can always get more oversold, but for now GMCR is spiking on big volume. The next buy trigger will hit once this stock trades back above its gap down day high of $48.04 with high volume. A high-volume move above that level should set off more short-covering as the stock looks to fill some of that gap down area. I also included GMCR on a recent list of earnings short-squeeze plays.
Body Central(BODY) is a specialty retailer of young women’s apparel and accessories operating retail stores in the South, Mid-Atlantic and Midwest regions of the U.S. The stock is trading up 6% at $22 in recent tradingToday’s Volume: 162,000Average Volume: 179,674Volume % Change: 64%This stock is spiking nicely higher today after the company reported that net revenues for the third quarter jumped by 17.9% to $67.1 million, which was well above $56.9 million for the same quarter last year. From a technical standpoint, this stock is bouncing hard off its 200-day moving average of $20.65 today on high-volume. The stock has also started to challenge two key breakout levels during intraday trading, at $21.49 and $22.08. >>Does Technical Trading Really Work?Market players should now watch for a sustained move and close above both of those levels to indicate a much bigger move higher is in the cards. If we see a high-volume close above those levels and today’s high of $22.95, then look for this stock to setup to challenge its next significant resistance levels at $24.43 and $26.30.
Spreadtrum Communications(SPRD) is a fabless semiconductor company that designs, develops and markets baseband processor, radio frequency transceiver and turnkey solutions for the wireless communications and mobile television market. The stock is trading up 7% at $28.53 in recent trading. Today’s Volume: 1,802,000Average Volume: 1,239,010Volume % Change: 121%This stock is blazing a trail higher today as buyers continue to come in and scoop up shares following their monster quarter from Wednesday. Spreadtrum beat third-quarter Wall Street estimates by 16 cents, beat on revenues and guided the four quarter above consensus. >>5 Beaten-Down Tech Stocks Poised to ReboundFrom a technical standpoint, this stock is very close to triggering a major breakout if it can sustain a move and close above some near-term overhead resistance and the all-time high at $28.85. The stock hit $28.70 in intraday trading, so market payers should watch this name very close to see if the stock can finish the week over $28.85. Since the volume today is already very strong it will mean we have hit a high-volume breakout if we get it. Shares could easily soar off this breakout as the stock starts to hit momentum traders’ screens who love to play stocks hitting all-time highs.
Silver Standard Resources
Silver Standard Resources(SSRI) is a silver resource company with properties in Argentina, Australia, Canada, Chile, Mexico, Peru and the U.S. It focuses on operating and producing silver from its Pirquitas Mine and on advancing its other mineral projects and project pipeline. The stock is trading up 6.3% at $16.08 in recent trading. Today’s Volume: 1,807,000Average Volume: 1,555,810Volume % Change: 79%From a technical standpoint, this stock gapped down big yesterday off of bearish earnings from around $19 to a low of $14.52. The stock is finding some bargain shoppers step in and buy up shares as it rebounds today on high-volume. The next buy trigger won’t come into play until SSRI trades above the gap down day high of $16.90 on high-volume. Look for volume that’s tracking in close to or above its three-month average of 1,555,810 if the stock takes out $16.90 in the coming days or weeks.
Pegasystems(PEGA) develops, markets, licenses, and supports software to automate complex, changing business processes. This stock is trading up 3% at $30.08 in recent trading. Today’s Volume: 471,000Average Volume: 329,357Volume % Change: 181%From a technical standpoint, this stock gapped down huge a few days ago from over $36 to a low of $28.34. That gap down took the stock down to some previous support at just above $28 a share. The stock has started to find some buying support if that level and is now spiking higher on solid volume. The next buy trigger will hit once PEGA trades back above its gap down day high of $31.42 with high-volume. Look for volume that comes in near or above its three-month average action of 329,357 shares. Follow Stockpickr on Twitter and become a fan on Facebook. >To order reprints of this article, click here: Reprints