I can find plenty of stocks that have soaring sales and other fundamentals.

And I can take that list and winnow it to find stocks with price action that fits my additional criteria, including being above my requisite moving price averages.

But in each issue of Traders Daily Direction, we post volume leaders of note from the prior trading day.

These may not make the cut of the SSI, but it shows that volume is a very important thing to be aware of when finding surge stocks.

But what really gets a stock over the top of my working list of potential surge stocks is a major building of volume.

In a moment, I’ll explain why volume is such an important component of the research that is done for the stocks utilizing my Stock Surge Indicator (SSI****) system.

The SSI takes market trading data from thousands of stocks and identifies stocks with the top scores. 

These are then further winnowed for the best stocks that we can present to you each and every week inside Traders Daily Direction.

And for those of you that have recently joined us here at Traders Daily Direction, I strongly recommend making sure that you are up to speed on my SSI system.

You don’t need to know the math or to do the calculations – but you do need to understand how it works and why.

This will empower you to be able to buy into the surge stocks with more confidence.

To get up to speed on my SSI – please download for free and read my special report: The Magic of the Stock Surge Indicator.

For the full Watchlist for this week, click here now.

Now, on to my explanation of the power of volume.

Confirmation Is Key

I’m looking for stocks that are beginning a new surge.

So, I don’t buy until price confirms that a new breakout is underway.

This usually means making a new high and getting above previous resistance.

But price isn’t the only tool I use for confirmation.

As noted above, I also watch volume.

A true breakout surge will be accompanied by an increase in trading volume.

This shows me that demand has increased, and institutions are buying in large size.

I like to see at least twice the average daily volume on a breakout – preferably 5X or more.

The same goes for the follow-through.

The stock should experience several days of heavy buying if it is going to make a large move.

A First Example

This is First Advantage (FA) – a recent IPO that broke out from its initial base last week.

Notice the large spike in volume on the daily chart.

FA saw roughly 100,000 shares traded each day preceding the breakout, then 1.5 million on the move to new highs.

This is the sign of a strong move.

A Second Class-A Example

I put Albemarle (ALB) on the Traders Daily Direction Watchlist back in July after noticing a textbook “cup and handle” pattern forming.

Look at that volume surge – 4X its daily average.

ALB climbed 35.2% over the next 30 days.

A Third Upstart of an Example

Upstart Holdings (UPST) was a big mover last week after reporting blowout earnings.

Note the drop in volume during the consolidation phase – a sign that selling had dried up and very little supply was coming to market.

Then, a massive surge in trading volume led to a 50% jump in the stock.

The easiest way to make money in stocks is to follow the money.

Institutions have deep pockets. When they buy, prices go up.

Don’t overthink it.

Ride the surge up, then nail down some profits and go back to cash.

Volume rules when looking to confirm the next surge stock.

This week, we kicked off with the three new Watch List stocks that included Albemarle Corporation (ALB). And this stock really hit it out of the park on the first pitch.

The stock opened at 176.22 and quickly started surging. It hit a high yesterday of 192.76 and even settling down is up big yesterday by 7.42%.

Albemarle Intraday Price Source Bloomberg

And in a moment, I’ll go through the company and how I traded it. But for you, this surge stock is proof that you need to open and read each and every one of my Traders Daily Direction first thing each morning to get the stocks that you need to trade as quickly as you can.

And to see more on this company and the others in this week’s Watch List, click here.

How I Traded It

I eat my own cooking. As a newsletter editor – this is important for me to get the same treatment for my own money as you get from my Traders Daily Direction.

I placed my trade just after the open at 9:31 EDT and got my fill at 179.00 that was above my buy price of 176.25.

I then sold half of my stock at 186.32 as the stock continued its surge. But I still have half of my original surge stock on my own books. And I now have raised my original stop from 163.15 to a current 188.25.

And I see more upside for this surge stock.

Albemarle Corporation Recap

Albemarle (ALB) is a specialty chemical company in Charlotte, North Carolina. It has a focus on plastics and polymers as well as a host of other products that run the gamut from cleaning to agricultural products. And it also provides the pharmaceutical industry with plenty of compounds.

And it also has products that work with one of the must have elements of lithium. Lithium of course is one of the must have for electronics and electric vehicles (EVs).

Sales suffered last year with the US and other economies going through lockdowns. But in the recent quarter – the company reported a big snap-back in sales with growth returning at a rate of 12.24%.

Operating margin is good at 16.20% - but it could do better for a return on shareholders’ equity that is currently running at only 7.60%.

Insiders have a small percentage of ownership – but they have recently been buying. As of July 4, they have added some 4.52% to their overall holdings of all outstanding shares in the company.

And here’s the chart that I worked up ahead of Monday on the stock:

• Surge score: 87/100
• % Above 52-wk low: 143%
• MFI reading: 48
• Sales growth: +12%
• Triple momentum: YES

Albemarle’s fundamentals are a little weaker than I’d prefer, but the chart setup looks fantastic.

The stock has consolidated in a textbook cup and handle pattern.

A 25% cup depth and 10% handle would dictate a sell target near $218 on a breakout.

But volatility is high, and a lot of stocks are not seeing the usual follow through here lately.

And I wrote: So, don’t be afraid to nail down profits early if ALB makes a decent move in the first 3-5 days. My entry trigger would be $176.25 with a sell stop at $163.15.

Now, this worked for me – and hopefully for you if you got onboard.

The Other Watch List Stocks

The other two watch list stocks for this week are also working.

The Joint Corporation (JYNT) is up by 4.02% today with some more in the works.

The Joint Corporation Intraday Price Source Bloomberg

And for Horizon Therapeutics (HZNP) – the stock came off of a quick up – and has settled down – but is still up by 0.43%.

Horizon Therapeutics Intraday Price Source Bloomberg

And for the full write ups for The Joint Corporation and Horizon Therapeutics – you need to review my Watch List for this week right here.

Another Trade Idea for You:

I am ramping up my insider stock buying research that is part of my Surge Stock Indicator (SSI). 

I have developed a new product that we’ve just launched here at Traders Agency called Stealth Trades. And this is all about my proprietary analysis that finds stocks with big surges in the works that are tipped off by a series of under the radar indicators that I find that the market misses that sets up big stealth wins. 

And to get the full rundown on how to profit by buying stocks that have under-noticed gains in the works to profit from inside our Stealth Trades at Traders Agency. Click here to watch.

• Surge score: 65/100
• % Above 52-wk low: 77.3%
• MFI reading: 55
• Sales growth: +49% TTM
• Triple momentum: YES

Horizon has been surging higher since early 2017.

Shares took a breath at the start of the year and have been consolidating for the last six months.

The company fell shy of quarterly earnings expectations in May for the first time in three years, but the stock held up well.

The right side of the chart is getting nice and tight and selling volume appears to be declining.

I’m looking for a breakout above the ascending channel. A move above $97.05 will be my trigger to buy.

If filled, I will be working a stop below Thursday’s low at $90.80.

Albemarle (ALB)

• Surge score: 87/100
• % Above 52-wk low: 143%
• MFI reading: 48
• Sales growth: +12%
• Triple momentum: YES

Albemarle’s fundamentals are a little weaker than I’d prefer, but the chart setup looks fantastic.

The stock has consolidated in a textbook cup and handle pattern.

A 25% cup depth and 10% handle would dictate a sell target near $218 on a breakout.

But volatility is high, and a lot of stocks are not seeing the usual follow through here lately.

So don’t be afraid to nail down profits early if ALB makes a decent move in the first 3-5 days.

My entry trigger would be $176.25 with a sell stop at $163.15.

Joint Corp (JYNT)

• Surge score: 99/100
• % Above 52-wk low: 532%
• MFI reading: 77
• Sales growth: +29%
• Triple momentum: YES

Stocks don’t trend much better than this.

JYNT has a Surge Score of 99/100, and it is easy to see why.

The stock is up 503% for the last twelve months and showing no signs of slowing down.

Along the way, pullbacks have been minimal.

Sales growth is accelerating, earnings are up big, and the price action is picture perfect.

I’m looking for new highs to confirm that the trend is still in place.

My trigger to buy will be a break above $87.25.

I will then work a stop at $80.50.