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.
Oaktree Capital Group
Oaktree Capital Group (OAK) operates as a global investment management firm that focuses on alternative markets. This stock closed up 1.1% at $50.53 in Monday's trading session.
Monday's Volume: 493,000
Three-Month Average Volume: 279,394
Volume % Change: 89%
From a technical perspective, OAK jumped modestly higher here right above some near-term support at $49.13 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $49.13 on the downside and $51.53 on the upside. This spike higher on Monday is starting to push shares of OAK within range of triggering a near-term breakout trade above the upper-end of its recent range. That trade will hit if OAK manages to take out Monday's intraday high of $50.74 to some resistance at $51.53 with high volume.
Traders should now look for long-biased trades in OAK as long as it's trending above Monday's low of $49.99 or above more key support at $49.13 and then once it sustains a move or close above those breakout levels with volume that's near or above 279,394 shares. If that breakout hits soon, then OAK will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $52.64 to its 200-day moving average of $53.69. Any high-volume move above those levels will then give OAK a chance to tag $54.34 to $56, or even $57.
Karyopharm Therapeutics
Karyopharm Therapeutics (KPTI), a clinical-stage pharmaceutical company, focuses on the discovery and development of drugs directed against nuclear transport targets for the treatment of cancer and other major diseases. This stock closed up 0.88% at $26.48 in Monday's trading session.
Monday's Volume: 348,000
Three-Month Average Volume: 205,303
Volume % Change: 60%
From a technical perspective, KPTI bounced modestly higher here right off some near-term support at $25 with above-average volume. This spike higher on Monday is starting to push shares of KPTI within range of triggering a major breakout trade. That trade will hit if KPTI manages to take out some key near-term overhead resistance levels at $28.07 to $28.51 and then once it clears its 50-day moving average of $29.33 to $29.47 with high volume.
Traders should now look for long-biased trades in KPTI as long as it's trending above some key near-term support at $25 and then once it sustains a move or close above those breakout levels with volume that's near or above 205,303 shares. If that breakout starts soon, then KPTI will set up to re-test or possibly take out its next major overhead resistance levels at $32.50 to $35, or even $37.
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Plains GP
Plains GP (PAGP), through its 22.1% limited partner interest in Plains AAP, L.P., is engaged in the transportation, storage, terminaling and marketing of crude oil, refined products, natural gas liquids and natural gas in the U.S. and Canada. This stock closed up 2.7% at $28.37 in Monday's trading session.
Monday's Volume: 784,000
Three-Month Average Volume: 607,642
Volume % Change: 50%
From a technical perspective, PAGP trended higher here right off its 50-day moving average of $27.87 with above-average volume. This spike higher on Monday is starting to push shares of PAGP within range of triggering a major breakout trade. That trade will hit if PAGP manages to take out Monday's intraday high of $28.51 to its all-time high of $29.88 with high volume.
Traders should now look for long-biased trades in PAGP as long as it's trending above Monday's low of $27.67 or above some more key near-term support at $27 and then once it sustains a move or close above those breakout levels with volume that's near or above 607,642 shares. If that breakout materializes soon, then PAGP will set up to enter new all-time-high territory above $29.88, which is bullish technical price action. Some possible upside targets off that move are $33 to $35.
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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