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.
Houghton Mifflin Harcourt Company
Houghton Mifflin Harcourt Company (HMHC) provides education solutions for educational institutions and consumers worldwide. This stock closed up 5.5% at $19.50 in Monday's trading session.
Monday's Volume: 1.28 million
Three-Month Average Volume: 315,916
Volume % Change: 308%
From a technical perspective, HMHC ripped sharply higher here and broke out above some near-term overhead resistance levels at $18.77 to $18.87 with strong upside volume. This move also pushed shares of HMHC back above its 50-day moving average of $19.40. Market players should now look for a continuation move to the upside in the short-term if HMHC manages to clear Monday's intraday high of $19.67 with strong upside volume.
Traders should now look for long-biased trades in HMHC as long as it's trending above $18.77 or above Monday's low of $18.30 and then once it sustains a move or close above $19.67 with volume that's near or above 315,916 shares. If that move gets underway soon, then HMHC will set up to re-test or possibly take out its next major overhead resistance level at its all-time high of $21. Any high-volume move above $21 will then give HMHC a chance to make a run at $25.
Acceleron Pharma
Acceleron Pharma (XLRN), a clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of protein therapeutics for cancer and rare diseases. This stock closed up 4.8% at $32.20 in Monday's trading session.
Monday's Volume: 766,000
Three-Month Average Volume: 347,172
Volume % Change: 75%
From a technical perspective, XLRN ripped sharply higher here right off some near-term support at $30 with above-average volume. This move higher on Monday is starting to push shares of XLRN within range of triggering a major breakout trade. That trade will hit if XLRN manages to take out its 50-day moving average of $33.29 to some more key overhead resistance levels at $35 to $35.37 with high volume.
Traders should now look for long-biased trades in XLRN as long as it's trending above support at $30 and then once it sustains a move or close above those breakout levels with volume that's near or above 347,172 shares. If that breakout materializes soon, then XLRN will set up to re-test or possibly take out its next major overhead resistance levels at $39.28 to $42.24.
Celldex Therapeutics
Celldex Therapeutics (CLDX), a biopharmaceutical company, focuses on the development, manufacture, and commercialization of novel therapeutics for human health care primarily in the U.S. This stock closed up 7.4% at $16.26 in Monday's trading session.
Monday's Volume: 4.37 million
Three-Month Average Volume: 2.73 million
Volume % Change: 85%
From a technical perspective, CLDX ripped sharply higher here right above its 50-day moving average of $14.54 with above-average volume. This spike higher on Monday also pushed shares of CLDX into breakout territory, since the stock took out some key overhead resistance levels at $15.97 to $16.16. Shares of CLDX are now starting to trend within range of triggering another big breakout trade. That trade will hit if CLDX manages to clear some past resistance levels at $17.20 to $18.52 with strong upside volume.
Traders should now look for long-biased trades in CLDX as long as it's trending above Monday's low of $15.04 or above its 50-day at $14.54 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.73 million shares. If that breakout triggers soon, then CLDX will set up to re-test or possibly take out its next major overhead resistance levels at $22 to its 200-day moving average of $23.04, or even $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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