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.
Vasco Data Security International
Vasco Data Security International (VDSI), together with its subsidiaries, designs, develops and markets security systems to secure and manage access to user digital assets worldwide. This stock closed up 5.5% at $14.23 in Monday's trading session.
Monday's Volume: 933,000
Three-Month Average Volume: 291,092
Volume % Change: 214%
From a technical perspective, VDSI ripped sharply higher here and broke out into new 52-week-high territory above some previous resistance at $14.10 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $10.60 to its intraday high of $14.36. During that uptrend, shares of VDSI have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if VDSI manages to clear its new 52-week high at $14.36 with high volume.
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Traders should now look for long-biased trades in VDSI as long as it's trending above Monday's intraday low of $13.48 or above more near-term support around $13 and then once it sustains a move or close above $14.36 with volume that hits near or above 291,092 shares. If that move starts soon, then VDSI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $17 to $20.
Boardwalk Pipeline Partners LP
Boardwalk Pipeline Partners LP (BWP), through its subsidiaries, provides transportation, storage, gathering and processing services for natural gas and natural gas liquids. This stock closed up 4.5% at $19.65 in Monday's trading session.
Monday's Volume: 3.75 million
Three-Month Average Volume: 1.37 million
Volume % Change: 134%
From a technical perspective, BWP spiked sharply higher here right above its 50-day moving average of $18.13 with strong upside volume flows. This spike to the upside on Monday briefly pushed shares of BWP back above its 200-day moving average of $19.76, before the stock closed just below that level at $19.65. Market players should now look for a continuation move to the upside in the short-term if BWP manages to take out Monday's intraday high of $20.10 with high volume.
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Traders should now look for long-biased trades in BWP as long as it's trending above Monday's intraday low of $19.02 or above its 50-day at $18.13 and then once it sustains a move or close above $20.10 with volume that's near or above 1.37 million shares. If that move starts soon, then BWP will set up to re-fill some of its previous gap-down-zone from February that started near $24.
Oil States International
Oil States International (OIS), through its subsidiaries, provides specialty products and services to natural resources companies worldwide. This stock closed up 2.5% at $62.68 in Monday's trading session.
Monday's Volume: 1.73 million
Three-Month Average Volume: 977,984
Volume % Change: 140%
From a technical perspective, OIS trended modestly higher here right above some near-term support at $59.66 with above-average volume. This move to the upside on Monday is starting to push shares of OIS within range of triggering a near-term breakout trade. That trade will hit if OIS manages to take out its 50-day moving average of $63.03 to some more near-term overhead resistance at $64.26 with high volume.
Traders should now look for long-biased trades in OIS as long as it's trending above Monday's intraday low of $61.22 or above more near-term support at $59.66 and then once it sustains a move or close above those breakout levels with volume that's near or above 977,984 shares. If that breakout gets set off soon, then OIS will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $65.77. Any high-volume move above that level will then give OIS a chance to make a run at $70.
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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