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.
Kodiak Oil & Gas
Kodiak Oil & Gas (KOG) an independent energy company, is engaged in the acquisition, exploration, exploitation, development and production of crude oil and natural gas in the Rocky Mountain region of the U.S. This stock closed up 4.7% at $14.91 in Monday's trading session.
Monday's Volume: 35.29 million
Three-Month Average Volume: 5.77 million
Volume % Change: 510%
From a technical perspective, KOG 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 six months, with shares moving higher from its low of $10.08 to its intraday high of $15.11. During that uptrend, shares of KOG have been making mostly 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 KOG can manage to take out Monday's intraday high of $15.11 with high volume.
Traders should now look for long-biased trades in KOG as long as it's trending above Monday's intraday low of $14.65 or above more support at $14 and then once it sustains a move or close above $15.11 with volume that this near or above 5.77 million shares. If that move gets started soon, then KOG 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.
Fox Factory
Fox Factory (FOXF) designs, engineers, manufactures and markets suspension products for mountain bikes, side-by-side vehicles, on-road and off-road vehicles and trucks, all-terrain vehicles, snowmobiles, specialty vehicles and applications, and motorcycles. This stock closed up 4.1% at $16.14 in Monday's trading session.
Monday's Volume: 620,000
Three-Month Average Volume: 106,795
Volume % Change: 447%
From a technical perspective, FOXF jumped sharply higher here right above some near-term support at $15.21 with strong upside volume flows. This stock recently dropped sharply lower from $18 to that low of $15.21 with heavy downside volume. Following that drop, shares of FOXF have now started to rebound off that $15.21 low with strong upside volume. Market players should now look for a continuation move higher in the short-term if FOXF manages to take out Monday's intraday high of $16.18 with high volume.
Traders should now look for long-biased trades in FOXF as long as it's trending above that recent low of $15.21 and then once it sustains a move or close above $16.18 with volume that hits near or above 106,795 shares. If that move gets started soon, then FOXF will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $17.23 to its 200-day moving average of $17.37. Any high-volume move above those levels will then give FOXF a chance to tag $18 to $19.
Materion
Materion (MTRN), through its subsidiaries, produces and sells engineered materials for use in electrical, electronic, thermal and structural applications primarily in the U.S., Europe and Asia. This stock closed up 2.1% at $38.19 in Monday's trading session.
Monday's Volume: 212,000
Three-Month Average Volume: 78,663
Volume % Change: 140%
From a technical perspective, MTRN jumped notably higher here right above some near-term support at $37 with above-average volume. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $31.61 to its recent high of $39.26. During that uptrend, shares of MTRN have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Monday is quickly starting to push shares of MTRN within range of triggering a big breakout trade. That trade will hit if MTRN manages to take out Monday's intraday high of $38.33 to its 52-week high of $39.26 with high volume.
Traders should now look for long-biased trades in MTRN as long as it's trending above some near-term support levels at $37 or at $36 and then once it sustains a move or close above those breakout levels with volume that's near or above 78,663 shares. If that breakout gets set off soon, then MTRN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50.
Auspex Pharmaceuticals
Auspex Pharmaceuticals (ASPX), a biopharmaceutical company, focuses on developing and commercializing in novel medicines for the treatment of orphan diseases. This stock closed up 5.2% at $21.05 in Monday's trading session.
Monday's Volume: 249,000
Three-Month Average Volume: 138,040
Volume % Change: 85%
From a technical perspective, ASPX ripped sharply higher here right off its 50-day moving average of $20.23 with strong upside volume. This stock recently formed a major bottoming chart pattern, since each time it pulled back to right below $20 a share it found buying interest. That buying interest supported the stock over the last month and change, and now shares of ASPX are starting to rip higher off those support levels. Market players should now look for a continuation move to the upside in the short-term if ASPX manages to take out Monday's intraday high of $21.44 with high volume.
Traders should now look for long-biased trades in ASPX as long as it's trending above Monday's intraday low of $20 or above more near-term support at $19.12 and then once it sustains a move or close above $21.44 with volume that's near or above 138,040 shares. If that move gets started soon, then ASPX will set up to re-test or possibly take out its next major overhead resistance levels at around $24 to $25.67. Any high-volume move above $25.67 will then give ASPX a chance to tag $30.
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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