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.
Kandi Technologies
Kandi Technologies (KNDI), through its subsidiaries, designs, develops, manufactures and commercializes various vehicles. This stock closed up 6.2% at $14.87 in Monday's trading session.
Monday's Volume: 3.67 million
Three-Month Average Volume: 1.76 million
Volume % Change: 148%
From a technical perspective, KNDI gapped up sharply higher here with strong upside volume flows. This stock has been uptrending over the last month and change, with shares moving higher from its low of $10.85 to its intraday high of $15.58. During that uptrend, shares of KNDI have been making mostly higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the near-term if KNDI manages to clear Monday's intraday high of $15.58 to more resistance at $16 with high volume.
Traders should now look for long-biased trades in KNDI as long as it's trending above Monday's intraday low of $14.65 or above more support at $13.80 and then once it sustains a move or close above $15.58 to $16 with volume that's near or above 1.76 million shares. If that move gets underway soon, then KNDI will set up to re-test or possibly take out its next major overhead resistance levels at $17.69 to $19
Gentex
Gentex (GNTX) is engaged in designing, developing, manufacturing and marketing automatic-dimming rearview mirrors and electronics for the automotive industry; variable dimmable aircraft windows for the aviation industry; and commercial smoke alarms and signaling devices for the fire protection industry worldwide. This stock closed up 0.9% at $30.27 in Monday's trading session.
Monday's Volume: 1.26 million
Three-Month Average Volume: 790,229
Volume % Change: 85%
From a technical perspective, GNTX trended modestly higher here right off its 200-day moving average of $29.63 with above-average volume. This spike higher on Monday is starting to push shares of GNTX within range of triggering a major breakout trade. That trade will hit if GNTX manages to take out Monday's intraday high of $30.31 to $31.13 and then once it clears some key resistance levels at $31.59 to $31.86 with high volume.
Traders should now look for long-biased trades in GNTX as long as it's trending above its 200-day at $29.63 or above its 50-day at $28.98 and then once it sustains a move or close above those breakout levels with volume that's near or above 790,229 shares. If that breakout begins soon, then GNTX will set up to re-test or possibly take out its 52-week high at $34.41.
Daqo New Energy
Daqo New Energy (DQ) manufactures and sells polysilicon and wafers in China. This stock closed up 2.3% at $31.04 in Monday's trading session.
Monday's Volume: 151,000
Three-Month Average Volume: 112,978
Volume % Change: 50%
From a technical perspective, DQ trended higher here back above its 50-day moving average of $30.88 with above-average volume. This stock recently formed a double bottom chart pattern $29.39 to $29.23. Following that bottom, shares of DQ have started to spike a bit higher and move within range of triggering a near-term breakout trade. That trade will hit if DQ manages to take out some near-term overhead resistance levels at $32.59 to $33.39 with high volume.
Traders should now look for long-biased trades in DQ as long as it's trending above those double bottom support zones and then once it sustains a move or close above those breakout levels with volume that's near or above 112,978 shares. If that breakout materializes soon, then DQ will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $36.40 to $37.50, or even $39.50.
Winnebago Industries
Winnebago Industries (WGO) manufactures and sells recreation vehicles primarily for use in leisure travel and outdoor recreation activities. This stock closed up 2.2% at $26.62 in Monday's trading session.
Monday's Volume: 374,517
Three-Month Average Volume: 263,373
Volume % Change: 50%
From a technical perspective, WGO jumped notably higher here back above its 200-day moving average of $26.55 with above-average volume. This stock recently broke out above some near-term overhead resistance levels at $24.60 to $25.29 with heavy upside volume. Market players should now look for a continuation move higher in the short-term if WGO manages to take out Monday's intraday high of $26.69 with high volume.
Traders should now look for long-biased trades in WGO as long as it's trending above Monday's intraday low of $25.69 or above $25 and then once it sustains a move or close above Monday's intraday high of $26.69 with volume that's near or above 263,373 shares. If that move gets started soon, then WGO will set up to re-test or possibly take out its next major overhead resistance levels at $28.43 to $28.90, or even its 52-week high at $32.41.
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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