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.
Astronics (ATRO), through its subsidiaries, designs and manufactures products for the aerospace and defense industries worldwide. This stock closed up 3% to $63.87 in Wednesday's trading session.
Wednesday's Volume: 289,000
Three-Month Average Volume: 145,175
Volume % Change: 87%
From a technical perspective, ATRO ripped higher here right off some near-term support at $62 with above-average volume. This move to the upside on Wednesday briefly pushed shares of ATRO into breakout territory, since the stock flirted with some key overhead resistance levels at $64.24 to $64.45. Shares of ATRO tagged an intraday high of $64.58, before closing just below that level at $63.87. Market players should now look for a continuation move to the upside in the short-term if ATRO manages to take out Wednesday's intraday high of $64.58 with high volume.
Traders should now look for long-biased trades in ATRO as long as it's trending above Wednesday's intraday low of $62.01 or above more near-term support at $60 and then once it sustains a move or close above $64.58 with volume that hits near or above 145,175 shares. If that move kicks off soon, then ATRO will set up to re-test or possibly take out its next major overhead resistance levels at $70 to $70.40, or even its 52-week high at $72.99.
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Insmed (INSM), is a biopharmaceutical company, focuses on developing and commercializing inhaled therapies for patients with serious lung diseases. This stock closed up 10.8% to $13.09 in Wednesday's trading session.
Wednesday's Volume: 3.68 million
Three-Month Average Volume: 978,108
Volume % Change: 230%
From a technical perspective, INSM soared sharply higher here with strong upside volume flows. This stock recently gapped down big from just over $17 to under $13 with heavy downside volume. Following that gap, shares of INSM continued to trend lower with the stock hitting its recent low of $11.25. Shares of INSM have now started to rebound strong off that $11.25 low and it's quickly moving within range of triggering a big breakout trade. That trade will hit if INSM manages to take out Wednesday's intraday high of $13.15 to its gap-down-day high of $13.52 with high volume.
Traders should now look for long-biased trades in INSM as long as it's trending above Wednesday's intraday low of $12.01 and then once it sustains a move or close above those breakout levels volume that hits near or above 978,108 shares. If that breakout hits soon, then INSM will set up to re-fill some of its previous gap-down-day zone that started just over $17.
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AerCap (AER), through its subsidiaries, is engaged in leasing, financing, selling and managing commercial aircraft and engines primarily in the U.S. and Russia This stock closed up 3.7% at $47.64 in Wednesday's trading session.
Wednesday's Volume: 3.59 million
Three-Month Average Volume: 671,388
Volume % Change: 356%
From a technical perspective, AER jumped higher here and broke out above some near-term overhead resistance levels at $46 to $46.82 with high volume. This spike to the upside on Wednesday is starting to push shares of AER within range of triggering a major breakout trade. That trade will hit if AER manages to take out Wednesday's intraday high of $47.95 to its 52-week high at $48.81 with high volume.
Traders should now look for long-biased trades in AER as long as it's trending above Wednesday's intraday low of $46.11 or above its 50-day at $45.32 and then once it sustains a move or close above those breakout levels with volume that hits near or above 671,388 shares. If that breakout kicks off soon, then AER will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60.
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 includingCNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.