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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.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
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Zoe's Kitchen
Zoe's Kitchen (ZOES), through its subsidiaries, develops and operates fast casual Mediterranean cuisine restaurants in the U.S. This stock closed up 5.1% at $32.80 in Wednesday's trading session.
Wednesday's Volume: 880,000
Three-Month Average Volume: 422,455
Volume % Change: 115%
From a technical perspective, ZOES spiked sharply higher here right above some near-term support at its 50-day moving average of $29.50 with above-average volume. This spike to the upside on Wednesday also pushed shares of ZOES into breakout territory, since the stock took out or flirted with some near-term overhead resistance levels at $31.75 to $32.87. Shares of ZOES tagged an intraday high of $33.60, before it closed just off that level at $32.70. This stock is now starting to trend within range of triggering an even bigger breakout trade. That trade will hit if ZOES manages to take out Wednesday's intraday high of $33.60 to its all-time high of $35.59 with high volume.
Traders should now look for long-biased trades in ZOES as long as it's trending above its 50-day moving average of $29.50 and then once it sustains a move or close above those breakout levels with volume that this near or above 422,455 shares. If that breakout develops soon, then ZOES will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45, or even $50.
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Craft Brew Alliance
Craft Brew Alliance (BREW) is engaged in brewing, marketing and selling craft beers and ciders under the Kona, Widmer Brothers, Redhook, Omission and Square Mile brand names in the U.S. This stock closed up 3.9% to $15.76 in Wednesday's trading session.
Wednesday's Volume: 215,000
Three-Month Average Volume: 54,252
Volume % Change: 237%
From a technical perspective, BREW jumped higher here right above some near-term support at $14.50 with above-average volume. This stock has been uptrending strong for the last four months and change, with shares moving higher from its low of $10.07 to its intraday high of $15.92. During that uptrend, shares of BREW have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in BREW if it manages to take out Wednesday's intraday high of $15.92 with high volume.
Traders should now look for long-biased trades in BREW as long as it's trending above some near-term support at $14.50 or above its 200-day at $13.67 and then once it sustains a move or close above those breakout levels with volume that hits near or above 54,252 shares. If that breakout begins soon, then BREW will set up to re-test or possibly take out its next major overhead resistance levels at $16.96 to $17.97, or its 52-week high of $18.70. Any high-volume move above $18.70 will then give BREW a chance to trend towards $20.
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Credit Suisse Group
Credit Suisse Group (CS), together with its subsidiaries, provides various financial services to private, corporate, institutional and government clients, as well as high-net-worth individuals worldwide. This stock closed up 2.5% at $28.08 in Wednesday's trading session.
Wednesday's Volume: 3.79 million
Three-Month Average Volume: 956,258
Volume % Change: 317%
From a technical perspective, CS trended notably higher here back above its 50-day moving average of $27.57 with strong upside volume flows. This stock has formed a major bottoming chart pattern over the last two months, with shares finding buying interest at $26.38, $26.90 and $26.66. This spike to the upside on Wednesday also pushed shares of CS into breakout territory, since the stock took out some near-term overhead resistance at $27.89. Market players should now look for a continuation move to the upside in the short-term if CS manages to clear Wednesday's intraday high of $28.12 with high volume.
Traders should now look for long-biased trades in CS as long as it's trending above Wednesday's intraday low $27.39 and then once it sustains a move or close above $28.12 with volume that's near or above 956,258 shares. If that move gets underway soon, then CS will set up to re-test or possibly take out its next major overhead resistance levels $28.95 to its 200-day at $29.48. Any high-volume move above its 200-day will then give CS a chance to trend north of $30.
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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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