How To Monitor Breakouts In Real Time With This Stock Market Volume Screen

The law of supply and demand has been governing the stock market since its inception more than 200 years ago. While the emergence of hedge funds and high-frequency trading has skewed volume to some extent, stocks still go up when buyers overwhelm sellers. And they go down when sellers dominate buyers.

Investor’s Business Daily’s volume percentage change calculation reveals when volume is particularly heavy in a stock. A big increase in trading volume is often the result of institutional investors like mutual funds, banks and pension funds buying or selling shares.

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If you see a stock where the volume percentage change totals 100% during a trading session, that means it’s on pace to double its normal 50-day average daily trading volume.

It’s easy to find stocks rising in heavy volume every day on the homepage of Investors.com using the Stocks On The Move screen. Volume data is continuously updated throughout the trading day.

To qualify for listing, several screen parameters are used, including stocks with Earnings Per Share and Relative Price Strength ratings of at least 70.

Stock Market Volume: Follow The Big Money

With the stock market in correction mode and money starting to rotate out of leading growth stocks, Stocks On The Move is an important screen to monitor to see where institutional money is rotating.

When a mutual fund starts to build a position in a stock, it can often happen over several weeks. So an initial volume burst in a stock can presage even more heavy-volume gains down the line.

Wednesday’s screen included four stocks breaking out, or close to breaking out of bases, including Hewlett Packard Enterprise (HPE), AAR Corp. (AIR), ESCO Technologies (ESE) and small cap Phibro Animal Health (PAHC). A couple of them are worth exploring further.

Hewlett Packard soared nearly 8% Wednesday on volume of nearly 52 million shares, nearly triple its average daily turnover of around 18 million shares. Its volume percentage at the close was 183%. Through Wednesday, the stock was up nearly 19% for the week (Point 1).

Last summer, the company completed its $14 billion acquisition of Juniper Networks. As a result, it’s back in growth mode as a provider of networking solutions for artificial intelligence workloads.

ESCO On The Move

ESCO Technologies also made the screen Wednesday when it gapped up near the top of a flat base with a 291.31 buy point. ESCO’s relative strength line made a new high before the stock did, a noteworthy sign of strength.

Stocks falling in heavy volume are available by clicking the “Down in Price” tab. In the aerospace and defense group, Innovative Solutions & Support (ISSC) appeared on the screen Thursday.

At that point, volume was tracking more than 250% above average. Big sellers were in the stock when it dived through its 50-day line, giving a sell signal.

Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.

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