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.
AerCap
AerCap (AER) engages in leasing, financing, selling and managing commercial aircraft and engines in the U.S., Russia and Germany. This stock closed up 3.1% to $38.27 in Wednesday's trading session.
Wednesday's Volume: 2.48 million
Three-Month Average Volume: 1.15 million
Volume % Change: 82%
From a technical perspective, AER spiked notably higher here right above some near-term support at $34.38 with above-average volume. This spike is quickly pushing shares of AER within range of triggering a major breakout trade. That trade will hit if AER manages to take out Wednesday's high of $38.55 to its 52-week high at $39.10 with high volume.
Traders should now look for long-biased trades in AER as long as it's trending above some near-term support levels at $36 or at $34.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.15 million shares. If that breakout triggers soon, then AER 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 $47.
YRC Worldwide
YRC Worldwide (YRCW), through its subsidiaries, provides various transportation services primarily in North America. This stock closed up 9.9% at $21.89 in Wednesday's trading session.
Wednesday's Volume: 2.49 million
Three-Month Average Volume: 1.66 million
Volume % Change: 115%
From a technical perspective, YRCW spiked sharply higher here and broke out above some near-term overhead resistance at $20.77 and above some past resistance at $21.87 with above-average volume. Market players should now look for a continuation move higher in the short-term if YRCW can manage to clear Wednesday's high of $22.25 with strong volume.
Traders should now look for long-biased trades in YRCW as long as it's trending above Wednesday's low of $19.52 or above $18.50 and then once it sustains a move or close above $22.25 with volume that hits near or above 1.66 million shares. If we get that move soon, then YRCW will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $27.
Papa John's
Papa John's (PZZA) operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark worldwide. This stock closed up 2.2% at $47.92 in Wednesday's trading session.
Wednesday's Volume: 364,000
Three-Month Average Volume: 296,015
Volume % Change: 50%
From a technical perspective, PZZA spiked notably higher here right above some near-term support at $46.01 with above-average volume. This move is starting to push shares of PZZA within range of triggering a near-term breakout trade. That trade will hit if PZZA manages to take out Wednesday's high of $48.02 to its 52-week high of $49.33 with high volume.
Traders should now look for long-biased trades in PZZA as long as it's trending above some near-term support at $46.01 or above its 50-day at $44.59 and then once it sustains a move or close above those breakout levels with volume that's near or above 296,015 shares. If that breakout triggers soon, then PZZA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $57.
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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