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 today.
Ligand Pharmaceuticals
Ligand Pharmaceuticals (LGND) is a biotechnology company that operates with a business model focused on developing or acquiring assets. This stock closed up 7.4% at $52.54 in Friday's trading session.
Friday's Volume: 568,000
Three-Month Average Volume: 273,763
Volume % Change: 91%
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From a technical perspective, LGND spiked sharply higher here right above its 50-day moving average $48.96 with above-average volume. This move is quickly pushing shares of LGND within range of triggering a big breakout trade. That trade will hit if LGND manages to take out some near-term overhead resistance at $55 and then once it clears its 52-week high at $58.48 with high volume.
Traders should now look for long-biased trades in LGND as long as it's trending above Friday's low of $49.43 and then once it sustains a move or close above those breakout levels with volume that's near or above 273,763 shares. If that breakout hits soon, then LGND will set up to enter new 52-week-high territory above $58.48, which is bullish technical price action. Some possible upside targets off that breakout are $63 to $65.
Acacia Research
Acacia Research (ACTG) acquires, develops, licenses and enforces patented technologies. This stock closed up 4.9% at $15.10 in Friday's trading session.
Friday's Volume: 1.22 million
Three-Month Average Volume: 642,120
Volume % Change: 110%
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From a technical perspective, ACTG spiked higher here right off some near-term support at $14.08 with above-average volume. This stock recently gapped down sharply from $20.50 to $14.74 with heavy downside volume. Following that gap down, shares of ACTG went on to tag a new 52-week low of $14.08. Shares of ACTG have now started to rebound off that $14.08 low and it's quickly moving within range of triggering a major breakout trade. That trade will hit if ACTG manages to take out Friday's high of $15.65 to more near-term overhead resistance at $16.28 with high volume.
Traders should now look for long-biased trades in ACTG as long as it's trending above Friday's low of $14.33 or above $14.08 and then once it sustains a move or close above those breakout levels with volume that's near or above 642,120 shares. If that breakout hits soon, then ACTG will set up to re-fill some of its previous gap down zone from October that started near $20.50.
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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