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.
Retrophin
Retrophin (RTRX), a biopharmaceutical company, engages in the discovery, development and commercialization of orphan drugs for the treatment of rare and life-threatening diseases. This stock closed up 7.3% to $21.20 in Monday's trading session.
Monday's Volume: 3.24 million
Three-Month Average Volume: 350,856
Volume % Change: 733%
From a technical perspective, RTRX jumped sharply higher here right above some near-term support at $19.01 with monster upside volume. This move on Monday is quickly pushing shares of RTRX within range of triggering a big breakout trade. That trade will hit if RTRX manages to take out Monday's high of $21.40 to its 52-week high of $21.84 with high volume.
Traders should now look for long-biased trades in RTRX as long as it's trending above Monday's low of $19.65 or above more key near-term support at $19.01 and then once it sustains a move or close above those breakout levels with volume that hits near or above 350,856 shares. If that breakout hits soon, then RTRX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $30.
Insmed
Insmed (INSM), a biopharmaceutical company, focuses on developing and commercializing inhaled therapies for patients with serious lung diseases. This stock closed up 11.1% at $19.04 in Monday's trading session.
Monday's Volume: 1.81 million
Three-Month Average Volume: 657,923
Volume % Change: 272%
From a technical perspective, INSM exploded higher here back above its 50-day moving average of $18.94 with heavy upside volume. This stock recently pulled back to its 200-day moving average with extreme downside volume and subsequently found buying interest. Shares of INSM are now starting to trend within range of triggering a major breakout trade. That trade will hit if INSM manages to take out some near-term overhead resistance levels at $19.79 to $21.15 and then once it takes out its 52-week high at $22.29 with high volume.
Traders should now look for long-biased trades in INSM as long as it's trending above some support around $17 and then once it sustains a move or close above those breakout levels with volume that's near or above 657,923 shares. If that breakout starts soon, then INSM will set up to enter new 52-week-high territory above $22.29, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $30.
Genocea Biosciences
Genocea Biosciences (GNCA), a clinical-stage biotechnology company, discovers and develops novel vaccines to treat infectious diseases. This stock closed up 4.7% to $18.19 in Monday's trading session.
Monday's Volume: 597,000
Three-Month Average Volume: 155,884
Volume % Change: 195%
From a technical perspective, GNCA spiked notably higher here off $17 a share with above-average volume. This stock just pulled back from its high of $23.99 to its recent low of $15.55. Following that move, shares of GNCA have started to rebound off that $15.55 low and it's now starting to move within range of triggering a near-term breakout trade. That trade will hit if GNCA manages to take out some key near-term overhead resistance levels at $18.64 to $19.18 with high volume.
Traders should now look for long-biased trades in GNCA as long as it's trending above Monday's low of $17 or above more support near $16 and then once it sustains a move or close above those breakout levels with volume that hits near or above 155,884 shares. If that breakout materializes soon, then GNCA will set up to re-test or possibly take out its next major overhead resistance levels at $22 to its all-time high at $23.99.
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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