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.
Ultragenyx Pharmaceuticals
Ultragenyx Pharmaceuticals (RARE), a development-stage biotechnology company, focuses on the identification, acquisition, development and commercialization of various products for the treatment of rare and ultra-rare diseases in the U.S. This stock closed up 7.8% at $43 in Friday's trading session.
Friday's Volume: 674,000
Three-Month Average Volume: 201,471
Volume % Change: 242%
From a technical perspective, RARE ripped sharply higher here right above some key near-term support levels at $39.21 to $37.77 with strong upside volume. This sharp spike higher on Friday is quickly pushing shares of RARE within range of triggering a major breakout trade. That trade will hit if RARE manages to take out Friday's intraday high of $43.44 to some more key overhead resistance levels at $44.59 to $46 with high volume.
Traders should now look for long-biased trades in RARE as long as it's trending above some key near-term support at $39.21 and then once it sustains a move or close above those breakout levels with volume that hits near or above 201,471 shares. If that breakout materializes soon, then RARE will set up to re-test or possibly take out its next major overhead resistance levels $50.91 to $50.93. Any high-volume move above those levels will then give RARE a chance to tag $60.
ImmunoGen
ImmunoGen (IMGN), a biotechnology company, develops targeted anticancer therapeutics. This stock closed up 8.8% to $11.74 in Friday's trading session.
Friday's Volume: 3.82 million
Three-Month Average Volume: 924,583
Volume % Change: 354%
From a technical perspective, IMGN surged sharply higher here right above its 52-week low of $10.65 with monster upside volume. This sharp spike to the upside on Friday is quickly pushing shares of IMGN within range of triggering a near-term breakout trade. That trade will hit if IMGN manages to take out its 50-day moving average of $10.82 to some more near-term overhead resistance levels at $12 to $12.17 with high volume.
Traders should now look for long-biased trades in IMGN as long as it's trending above its 52-week low of $10.65 and then once it sustains a move or close above those breakout levels with volume that hits near or above 924,583 shares. If that breakout triggers soon, the IMGN will set up to re-fill more of its previous gap-down-day zone from June that started at $13.78. If that gap gets filled with volume, then IMGN could easily tag its next major overhead resistance levels at its 200-day moving average of $14.33 to $14.80.
Bluebird Bio
Bluebird Bio (BLUE), a clinical-stage biotechnology company, focuses on developing gene therapies for severe genetic and orphan diseases. This stock closed up 10.2% at $33.91 in Friday's trading session.
Friday's Volume: 1.03 million
Three-Month Average Volume: 509,689
Volume % Change: 115%
From a technical perspective, BLUE exploded higher here right above some key near-term support levels at $30.33 and its 50-day moving average of $29.60 with above-average volume. This monster move to the upside on Friday is quickly pushing shares of BLUE within range of triggering a near-term breakout trade. That trade will hit if BLUE manages to take out Friday's intraday high of $34 to some more near-term overhead resistance at $34.69 with high volume.
Traders should now look for long-biased trades in BLUE as long as it's trending above $32 or above $30.33 and then once it sustains a move or close above those breakout levels with volume that's near or above 509,689 shares. If that breakout kicks off soon, then BLUE will set up to re-test or possibly take out its next major overhead resistance levels at $38 to $40, or even $41 to its 52-week high at $41.75.
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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