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.
Veeva Systems
Veeva Systems (VEEV) provides industry-specific cloud-based software solutions for the life sciences industry in North America, Europe, the Asia Pacific and Latin America. This stock closed up 11.3% at $23.72 in Monday's trading session.
Monday's Volume: 2.72 million
Three-Month Average Volume: 1.36 million
Volume % Change: 95%
From a technical perspective, VEEV exploded higher here right off its 50-day moving average of $20.77 with above-average volume. This sharp spike higher on Monday also pushed shares of VEEV into breakout territory, since the stock took out some near-term overhead resistance levels at $23.25 to $23.59. Shares of VEEV are now starting to trend within range of triggering another big breakout trade. That trade will hit if VEEV manages to take out Monday's intraday high of $23.88 to more past overhead resistance at $24.25 with high volume.
Traders should now look for long-biased trades in VEEV as long as it's trending above $22 or above its 50-day at $20.77 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.36 million shares. If that breakout gets started soon, then VEEV will set up to re-test or possibly take out its next major overhead resistance levels at $29 to $32
Dealertrack Technologies
Dealertrack Technologies (TRAK) provides Web-based software solutions and services to the automotive retail industry in the U.S. and Canada This stock closed up 3.7% at $42.58 in Monday's trading session.
Monday's Volume: 832,000
Three-Month Average Volume: 560,483
Volume % Change: 65%
From a technical perspective, TRAK spiked notably higher here right above some near-term support at $39.82 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $38.12 on the downside and $42.55 on the upside. This spike higher on Monday is starting to push shares of TRAK into breakout territory, since the stock flirted with the upper-end of its recent range. Shares of TRAK tagged an intraday high of $42.61, before closing just below that level and right near its 50-day moving average at $42.71. Market players should now look for a continuation move higher in the short-term if TRAK manages to take out Monday's high of $42.61 with strong upside volume flows.
Traders should now look for long-biased trades in TRAK as long as it's trending above Monday's low of $40.70 or above more near-term support at $39.82 and then once it sustains a move or close above Monday's high of $42.61 with volume that's near or above 560,483 shares. If that move starts soon, then TRAK will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $44.52 to $44.58. Any high-volume move above those levels will then give TRAK a chance to re-test or possibly take out its next major overhead resistance levels at $48 to $50.
Nimble Storage
Nimble Storage (NMBL) provides flash-optimized hybrid storage platform. This stock closed up 4% at $27.56 in Monday's trading session.
Monday's Volume: 1.65 million
Three-Month Average Volume: 709,728
Volume % Change: 182%
From a technical perspective, NMBL bounced sharply higher here right off its 50-day moving average of $27.10 with above-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $22.40 to its intraday high of $28.47. During that move, shares of NMBL have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of NMBL are now starting to trend within range of triggering a near-term breakout trade. That trade will hit if NMBL manages to take Monday's intraday high of $28.47 to some more near-term overhead resistance at $30.13 with high volume.
Traders should now look for long-biased trades in NMBL as long as it's trending above some near-term support at $25 and then once it sustains a move or close above those breakout levels with volume that hits near or above 709,728 shares. If that breakout triggers soon, then NMBL will set up to re-test or possibly take out its next major overhead resistance levels at $37 to $41.
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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