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.
Ixys
Ixys (IXYS) provides networking platform and solutions that enable utilities to transform the power grid infrastructure into the smart grid. This stock closed up 7% at $13.87 in Friday's trading session.
Friday's Volume: 510,000
Three-Month Average Volume: 81,087
Volume % Change: 627%
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From a technical perspective, IXYS ripped sharply higher here and broke out into new 52-week-high territory with monster upside volume. This stock has been uptrending strong for the last four months, with shares moving higher from its low of $9.31 to intraday high of $13.99. During that uptrend, shares of IXYS have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in IXYS as long as it's trending above Friday's low of $12.96 and then once it sustains a move or close above its new 52-week high at $13.99 with volume that's near or above 81,087 shares. If we get that move soon, then IXYS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $16 to $17.
Family Dollar Stores
Family Dollar Stores (FDO) operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the U.S. This stock closed up 3.8% at $67.48 in Friday's trading session.
Friday's Volume: 6.92 million
Three-Month Average Volume: 1.39 million
Volume % Change: 421%
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From a technical perspective, FDO spiked notably higher here back above both its 200-day moving average of $66.39 and its 50-day moving average of $67.19 with strong upside volume. This move also pushed shares of FDO above some key near-term overhead resistance at $66.80. Market players should now look for a continuation move higher in the short-term if FDO manages to take out Friday's high of $67.88 with strong volume.
Traders should now look for long-biased trades in FDO as long as it's trending above its 200-day at $66.39 and then once it sustains a move or close above $67.88 with volume that's near or above 1.39 million shares. If we get that move soon, then FDO will set up to re-test or possibly take out its next major overhead resistance levels at $70 to $71.50. Any high-volume move above those levels will then give FDO a chance to tag $73 to $74.
Epizyme
Epizyme (EPZM), a clinical-stage biopharmaceutical company, engages in the discovery, development, planning and commercialization of various personalized therapeutics for the treatment of patients with genetically defined cancers. This stock closed up 8.9% at $40.41 in Friday's trading session.
Friday's Volume: 731,000
Three-Month Average Volume: 341,694
Volume % Change: 105%
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From a technical perspective, EPZM spiked sharply higher here right above some near-term support at $35 with above-average volume. This stock recently gapped up sharply higher from around $20 to $37.69 with monster upside volume. Shares of EZPM are now quickly moving within range of triggering a big breakout trade. That trade will hit if EPZM manages to take out Friday's high of $41.23 to some more key overhead resistance levels at $42 to $42.71 with high volume.
Traders should now look for long-biased trades in EPZM as long as it's trending above Friday's low of $36.55 or above $35 and then once it sustains a move or close above those breakout levels with volume that's near or above 341,694 shares. If that breakout triggers soon, then EPZM will set up to re-test or possibly take out its all-time high at $45.72. Any high-volume move above that level will then give EPZM a change to tag $50 to $55.
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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