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.
MPLX
MPLX (MPLX) owns, operates, develops and acquires crude oil, refined product and other hydrocarbon-based product pipelines and other midstream assets in the U.S. This stock closed up 3.6% to $45.21 in Monday's trading session.
Monday's Volume: 485,000
Three-Month Average Volume: 101,571
Volume % Change: 438%
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From a technical perspective, MPLX bounced sharply higher here right above some near-term support at $43 with heavy upside volume. This move pushed shares of MPLX into breakout and new all-time-high territory, after the stock took out some near-term overhead resistance at $44.97. Market players should now look for a continuation move higher in the short-term if MPLX can manage to take out Monday's high of $46.12 with high volume.
Traders should now look for long-biased trades in MPLX as long as it's trending above support at $43 and then once it sustains a move or close above $46.12 with volume that hits near or above 101,571 shares. If we get that move soon, then MPLX will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $50 to $55.
Honeywell International
Honeywell International (HON) operates as a diversified technology and manufacturing company worldwide. This stock closed up 2% to $90.29 in Monday's trading session.
Monday's Volume: 6.58 million
Three-Month Average Volume: 2.28 million
Volume % Change: 163%
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From a technical perspective, HON bounced notably higher here right above its 50-day moving average of $88.94 with above-average volume. This move is quickly pushing shares of HON within range of triggering a big breakout trade. That trade will hit if HON manages to take out Monday's high of $90.97 to $91.25 and then once it clears its 52-week high at $91.56 with strong volume.
Traders should now look for long-biased trades in HON as long as it's trending above its 50-day at $88.94 or above more near-term support levels at $88.43 or $88.12 and then once it sustains a move or close above those breakout levels with volume that's near or above 2.28 million shares. If that breakout hits soon, then HON will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $95 to $100, or even $105.
GATX
GATX (GMT) leases, operates, manages and remarkets assets in the rail and marine markets in North America and internationally. This stock closed up 0.99% at $59.19 in Monday's trading session.
Monday's Volume: 559,000
Three-Month Average Volume: 226,631
Volume % Change: 146%
From a technical perspective, GMT spiked modestly higher here with above-average volume. This stock recently gapped up sharply higher from around $52 to its high of $61.16 with heavy upside volume. Since that move, shares of GMT have sold modestly to its recent low of $58.78. Shares of GMT are now starting to trend within range of triggering a near-term breakout trade. That trade will hit if GMT manages to take out Monday's high of $60.72 to its 52-week high at $61.16 with high volume.
Traders should now look for long-biased trades in GMT as long as it's trending above Monday's low of $58.78 or above $58 and then once it sustains a move or close above those breakout levels with volume that's near or above 226,631 shares. If that breakout hits soon, then GMT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $65 to $70.
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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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