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.
Green Dot
Green Dot (GDOT), together with its subsidiaries, operates as a technology-centric, pro-consumer bank holding company that provides personal banking for the masses. This stock closed up 2.6% to $23.12 in Monday's trading session.
Monday's Volume: 1.54 million
Three-Month Average Volume: 592,964
Volume % Change: 133%
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From a technical perspective, GDOT spiked notably higher here right off its 200-day moving average of $22.09 with above-average volume. This stock recently gapped down sharply from $26.87 to $20.75 with heavy downside volume. Following that gap down, shares of GDOT have started to recover and move back above its gap-down-day high of $22.84. Market players should now look for a continuation move higher into that gap in the short-term if GDOT can manage to take out Monday's high of $23.15 with strong volume.
Traders should now look for long-biased trades in GDOT as long as it's trending above Monday's low of $21.78 and then once it sustains a move or close above $23.15 with volume that's near or above 592,964 shares. If we get that move soon, then GDOT will set up to re-fill some more of its gap-down-day zone that started at $26.87.
American Vanguard
American Vanguard (AVD), through its subsidiaries, engages in developing, manufacturing and marketing specialty chemical products primarily for agricultural and commercial uses. This stock closed up 2.5% at $23.82 in Monday's trading session.
Monday's Volume: 555,000
Three-Month Average Volume: 208,442
Volume % Change: 161%
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From a technical perspective, AVD jumped higher here right above some key near-term support at $23.01 with above-average volume. This stock has been consolidating and trending sideways for the last month and change, with shares moving between $22.21 on the downside and $24.54 on the upside. Shares of AVD are now starting to move within range of triggering a near-term breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if AVD manages to take out Monday's high of $24.30 to $24.54 and then once it clears its 50-day moving average at $25.11 with high volume.
Traders should now look for long-biased trades in AVD as long as it's trending above support at $23.01 or at $22.21 and then once it sustains a move or close above those breakout levels with volume that's near or above 208,442 shares. If that breakout hits soon, then AVD will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $26.54 to $28.10, or even $29.
Regis
Regis (RGS) owns, operates and franchises hairstyling and hair care salons for men, women, and children in the U.S., Canada, Puerto Rico and the U.K. This stock closed up 2.1% at $12.59 in Monday's trading session.
Monday's Volume: 1.86 million
Three-Month Average Volume: 697,342
Volume % Change: 250%
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From a technical perspective, RGS bounced modestly higher here with strong upside volume. This stock recently gapped down sharply from close to $14 to its 52-week low of $11.48 with heavy downside volume. Following that move, shares of RGS have started to rebound and move within range of triggering a near-term breakout trade. That trade will hit if RGS manages to take out Monday's high of $12.69 to some more near-term overhead resistance at $12.79 with high volume.
Traders should now look for long-biased trades in RGS as long as it's trending above $12 or above its 52-week low at $11.48 and then once it sustains a move or close above those breakout levels with volume that's near or above 697,342 shares. If that breakout hits soon, then RGS will set up to re-fill some of its previous gap-down-day zone that started near $14. If that gap gets filled with volume, then RGS could tag its 50-day at $14.49 or more near-term resistance at $15.
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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