5 Unusual Volume Spikes to Trade
WINDERMERE, Fla. ( 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.
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 today.
Rexnord (RXN) is a worldwide industrial company comprised of two strategic platforms: Process & Motion Control and Water Management. This stock is trading up 1.8% at $18.25 in recent trading.
Today's Volume: 421,000
Average Volume: 217,160
Volume % Change: 193%
From a technical perspective, RXN is bouncing modestly higher here right near its 50-day moving average of $17.31 with above-average volume. This move is quickly pushing RXN within range of triggering a near-term breakout trade. That trade will hit once RXN manages to take out some near-term overhead resistance levels at $18.90 to $19.00 with high volume.
Traders should now look for long-biased trades in RXN as long as it's trending above its 50-day at $17.31, and then once it sustains a move or close above those breakout levels with volume that hits near or above 217,160 shares. If that breakout triggers soon, then RXN will set up to re-test or possibly take out its next major overhead resistance levels at $19.76 to $20.50. Any high-volume move above those levels will then put $21.58 to $22 into focus for RXN.
Ciena (CIEN) is a provider of equipment, software and service solutions that support the transport, switching, aggregation and management of voice, video and data traffic on communications networks. This stock is trading up 7.8% at $14.22 in recent trading.
Today's Volume: 7.33 million
Average Volume: 4.55 million
Volume % Change: 180%
Shares of CIEN are soaring higher today after AT&T said it plans to spend $14 billion on network expansion over the next three years.
From a technical perspective, CIEN is bouncing strongly to the upside here right off its 50-day moving average of $13.60 with monster volume. This move has also pushed CIEN right below its 200-day moving average of $14.81. Shares of CIEN are now moving within range of triggering a major breakout trade. That trade will hit once CIEN manages to take out its 200-day at $14.81 and then some more past resistance levels at $14.95 to $15 with high volume.