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.
Flowers Foods
Flowers Foods (FLO) produces and markets bakery foods in the U.S. This stock closed up 3.4% at $21.37 in Friday's trading session.
Friday's Volume: 4.19 million
Three-Month Average Volume: 1.19 million
Volume % Change: 249%
From a technical perspective, FLO jumped higher here right off its 50-day moving average of $20.65 with above-average volume. This move is starting to push shares of FLO within range of triggering a major breakout trade. That trade will hit if FLO manages to take out its 200-day moving average of $21.76 to some more key overhead resistance levels at $22.10 to just above $22.50 with high volume.
Traders should now look for long-biased trades in FLO as long as it's trending above its 50-day moving average of $20.65 or above more support at $20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.19 million shares. If that breakout starts soon, then FLO will set up to re-fill some of its previous gap-down-day zone from last November that started near $25.
Littelfuse
Littelfuse (LFUS) designs, manufactures and sells circuit protection devices for use in the automotive, electronic and electrical markets worldwide. This stock closed up 4% at $96.20 in Friday's trading session.
Friday's Volume: 380,000
Three-Month Average Volume: 85,323
Volume % Change: 366%
From a technical perspective, LFUS jumped sharply higher here right above its 50-day moving average of $92.04 with heavy upside volume. This move pushed shares of LFUS into breakout and new 52-week-high territory, after the stock took out some near-term overhead resistance at $96.07. Market players should now look for a continuation move higher in the short-term if LFUS manages to take out its new 52-week high at $97.40 with high volume.
Traders should now look for long-biased trades in LFUS as long as it's trending above Friday's low of $92.70 and then once it sustains a move or close above $97.40 with volume that's near or above 85,323 shares. If that move gets underway soon, then LFUS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $105 to $110.
B/E Aerospace
B/E Aerospace (BEAV) designs, manufactures, sells and services cabin interior products for commercial aircraft and business jets in the U.S. and internationally. This stock closed up 1.5% at $87.98 in Friday's trading session.
Friday's Volume: 2.29 million
Three-Month Average Volume: 1 million
Volume % Change: 123%
From a technical perspective, BEAV trended modestly higher here with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $74.48 to its recent high of $88.17. During that uptrend, shares of BEAV have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Friday is now starting to push shares of BEAV within range of triggering a big breakout trade. That trade will hit if BEAV manages to take out some key overhead resistance levels at $88.17 to its 52-week high at $88.43 with high volume.
Traders should now look for long-biased trades in BEAV as long as it's trending above $86 or $85 and then once it sustains a move or close above those breakout levels with volume that's near or above 1 million shares. If that breakout starts soon, then BEAV will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $95 to $100.
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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