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.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
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Universal
Universal (UVV) operates as a leaf tobacco merchant and processor worldwide. This stock closed up 2.1% at $46 in Friday's trading session.
Friday's Volume: 3.11 million
Three-Month Average Volume: 228,105
Volume % Change: 1600%
From a technical perspective, UVV bounced higher here right above its new 52-week low of $44.39 with monster upside volume flows. This stock has been downtrending badly for the last three months, with shares falling sharply from its high of $56.82 to that new 52-week low of $44.39. During that downtrend, shares of UVV have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of UVV have now started to spike higher off that 52-week low and off oversold territory, since its current relative strength index reading is 27.01.
Traders should now look for long-biased trades in UVV as long as it's trending above Friday's intraday low of $45.19 or above its 52-week low of $44.93 and then once it sustains a move or close above Friday's intraday high of $46.50 with volume that hits near or above 228,015 shares. If that move starts soon, then UVV will set up to re-test or possibly take out its next major overhead resistance levels at $48 to its 50-day moving average of $51.87.
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Par Petroleum
Par Petroleum (PARR) operates as a diversified energy company in the U.S. This stock closed up 6.3% at $16.63 in Friday's trading session.
Friday's Volume: 582,000
Three-Month Average Volume: 72,052
Volume % Change: 787%
From a technical perspective, PARR ripped sharply higher here right above some near-term support at $15 with monster upside volume. This stock has been downtrending badly for the last two months and change, with shares moving sharply lower from its high of $21.25 to its new 52-week low of $14. During that downtrend, shares of PARR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of PARR have now started to rebound off that 52-week low of $14 and off oversold territory, since its relative strength index recently dropped below 30.
Traders should now look for long-biased trades in PARR as long as it's trending above Friday's intraday low of $15.70 or above more near-term support at $15 and then once it sustains a move or close above Friday's intraday high of $17.07 to its 50-day moving average at $18.16 with volume that hits near or above 72,052 shares. If that move kicks off soon, then PARR will set up to re-test or possibly take out its next major overhead resistance levels at $18.89 to its 200-day at $19.82, or even $20.
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Endo International
Endo International (ENDP), a specialty healthcare company, develops, manufactures, markets, and distributes branded pharmaceutical and generic products, and medical devices worldwide. This stock closed up 1.1% at $67.70 in Friday's trading session.
Friday's Volume: 6.64 million
Three-Month Average Volume: 1.77 million
Volume % Change: 295%
From a technical perspective, ENDP trended modestly higher here right above some near-term support at $66 and above its 50-day moving average of $65.25 with strong upside volume flows. This stock has been uptrending over the last month and change, with shares moving higher from its low of $61.13 to its recent high of $69.67. During that move, shares of ENDP have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ENDP within range of trigger a near-term breakout trade. That trade will hit if ENDP manages to take out some key overhead resistance levels at $69.67 to $70 and then above more resistance at $70.96 to $72.21 with high volume.
Traders should now look for long-biased trades in ENDP as long as it's trending above some near-term support at $66 or above its 50-day at $65.25 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.77 million shares. If that breakout materializes soon, then ENDP will set up to re-test or possibly take out its next major overhead resistance levels at $75.69 to its 52-week high at $82.16.
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Electronics for Imaging
Electronics for Imaging (EFII) provides digital inkjet printers, business process automation solutions, and color digital front ends. This stock closed up 1.15% at $45.88 in Friday's trading session.
Friday's Volume: 947,000
Three-Month Average Volume: 376,709
Volume % Change: 149%
From a technical perspective, EFII spiked modestly higher here right above its 50-day moving average of $44.44 with above-average volume. This move to the upside on Friday is starting to push shares of EFII within range of triggering a big breakout trade. That trade will hit if EFII manages to take out Friday's intraday high of $45.94 to some more key overhead resistance levels at $47.42 to its 52-week high at $47.75 with high volume.
Traders should now look for long-biased trades in EFII as long as it's trending above its 50-day at $44.44 or above more near-term support at $42.74 and then once it sustains a move or close above those breakout levels with volume that's near or above 376,709 shares. If that breakout begins soon, then EFII will set up to enter new 52-week-high territory above $47.75, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55.
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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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