I like to look at stocks with more than the average volume to find ideas for trades. Often stocks with above average volume may be at an inflection point or may be good for a quick trade. These stocks may also provide indirect trading ideas. Indirect trading ideas are ideas where a fundamental change in one stock will result in a share price change in another stock.
Below are five stocks that are showing unusual trading volume today that should be considered for further analysis and a possible long or short trade. Also, in some cases, I identify places to look for indirect ideas. Note that volume and price information is as of approximately 1:00 EST.
Apple is trading unusual volume of over one time its average daily volume half way through the session with traders slicing the apple price by almost 4%. UBS cut their Apple price target due to supply chain checks that indicated a reduced build rate, reduced expectations of Chinese demand for the iPhone 5, concerns over the iPad mini cannibalizing sales of the larger iPad, and reduced growth expectations due to European concerns and tough competition. Apple is nearing the low of $505.75 it reached in mid-November.
Qualcomm is trading unusual volume of over two times its average daily volume and is down more than 3% for the session. Qualcomm stock has slid 6% since December 11th. The drop today appears to be related to talk that Apple has reduced iPhone 5 production and likely is also reducing component orders to Qualcomm. Several other Apple suppliers such as Broadcom (BRCM), Cirrus (CRUS), TriQuint (TQNT), Skyworks (SWKS), OmniVision (OVTI), and Avago (AVGO) are also weak today and might be good short possibilities.
Best Buy (BBY)
Best Buy is trading unusual volume for the third day in a row on discussion of a potential buyout from the founder, Richard Schulze. Today, the stock has dropped 15% after jumping yesterday. Volume swelled to over four times the average daily volume. Today Wall Street learned that the board gave the founder Richard Schulze additional time to provide his offer. The deadline previously was December 16th but now has been pushed out to February 28th. Schulze will now be able to see the results of Christmas sales before firming up his bid if in fact a bid comes at all. The drama will continue.
Adobe Systems (ADBE)
Adobe is trading unusual volume of nearly three times the average daily volume and is up nearly 6% for the session. Adobe reported earnings last night after the close and beat expectations. Fiscal Q4 EPS of $0.61 beat expectations by $0.05. Adobe is transitioning to a subscription model which is expected to reduce 2013 results but improve long-term revenue growth. Adobe is a rare bright spot in technology trading that is weak with the Nasdaq composite down roughly 0.5%.
Schlumberger has traded over three times the average daily volume and the stock is down over 5%. The Houston based company issued a fourth quarter operational update this morning. Schlumberger is expecting earnings per share to drop $0.05 to $0.07/share due to weakness in a variety of markets. Analysts were expecting Q4 earnings of $1.13/share. In related news Baker Hughes (BHI) reported that oil and gas rigs in the US declined for a third week. Looking for lesser known energy services outfits may be a good place to look for trading ideas.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.