Rocketing Volume: 3 Stocks With Big Potential Moves

Key Points

• With a quiet S&P 500, it seems that traders are now focused only on the stocks that can deliver outsized volatility to turn a profit.
• Three names were flagged for unusual trading activity, and the fundamental backdrop makes sense as to why.
• Wall Street is turning bullish on these names, with double-digit upside potential in the making.

It seems that trading the S&P 500 index lately has become an afterthought for most investors on Wall Street, especially considering how little volatility there has been recently to compress the number of opportunities for a profitable run. However, that doesn’t mean money is just going to sit idly by; there are signs of activity elsewhere in the stock market.

Some names have been picked up by traders in an unusual reading of trading volume, meaning a potential sign of accumulation or speculation for a short-term move in these chosen names. What this means for investors is that there is still a chance to capture some volatility outside of the indexes in the hopes of turning a profit, as these unusual traders have picked for themselves.

A few of the stocks flagged in this unusual volume filter are Rocket Companies Inc. NYSE: RKT, Wendy’s Co. NASDAQ: WEN, and even PulteGroup Inc. NYSE: PHM. When investors consider the reasoning behind these picks, the current cycle in the real estate sector and a budget-friendly restaurant like Wendy’s becomes more understandable, given the current trading levels and the future fundamentals that could appeal to potential buyers.

Rocket Stock Could Boom on New Mortgage Cycle

One of the best ways for investors to spot new opportunities is by identifying market outliers, which is mostly achieved by comparing a company's valuation multiples against those of its peer group. When it comes to Rocket Companies stock, the answer is clear as to why the market is valuing it the way it is.

Because this stock trades at a price-to-cash (P/C) ratio of up to 71x today, it commands a massive premium to the rest of the finance sector’s 21.6x valuation multiple. Now, the reason why the market is willing to pay this much for the company’s cash needs some fundamental reasoning in order to be truly understood.

Now that mortgage data is at the bottom of the cycle, with low volumes and high rates, it isn’t too far-fetched to see that Rocket’s cash in its balance sheet could be deployed aggressively in mortgage generation when mortgage rates inevitably swing lower and spark new demand and activity.

This view might have driven traders to ramp up Rocket’s daily volume up to 64.3 million shares on July 22, a significant increase over the average, which is closer to 20 million shares per day. With this in mind, investors now have a fundamental view to bet on for Rocket, and some interested backers behind the stock to drive it higher as well.

Short Sellers Know Wendy’s Plays Big in Today’s Market

With consumers growing increasingly worried about inflation and controlling their budgets more rigidly, it makes no sense to bet against a company that caters to these needs and worries, and that is where Wendy’s stock comes into play. Over the past month, investors have seen this sentiment shift through the company’s short interest decline of up to 45.3%.

In a clear sign of bearish capitulation, the obvious has been stated for the stock as it now trades at only 49% of its 52-week high, creating a very attractive risk-to-reward ratio in favor of the buyers, as most (if not all) of the downside scenarios in this stock have likely been priced in.

Recording up to 19.3 million shares traded on July 22 as well, Wendy’s volume stood head and shoulders above its average of only six million shares, and it is no coincidence that Wall Street analysts have also come to push for higher prices.

With a consensus price target of up to $15.3 per share, the Wall Street collective calls for a rally of up to 50.5% in Wendy’s stock for the coming months and quarters. Investors can now connect the dots between sentiment and a broad jump above the average trading volume for this stock.

PulteGroup’s EPS Swing Says it All

Most investors know that earnings per share (EPS) growth is what drives most of a stock’s performance, and that is where making the connection between Rocket’s upside and PulteGroup’s future growth can make this play easier to understand.

If mortgage demand swings, so will homebuilding activity, which might be why Wall Street analysts see PulteGroup reporting up to $3.17 in EPS for the fourth quarter of 2025. Investors must note that PulteGroup reported $3.03 in EPS for the most recent quarter, beating expectations by up to 4% in an unexpected financial recovery.

Given this sudden turn, it shouldn’t be a surprise if PulteGroup beats these expectations for the fourth quarter as well. The five million shares traded on July 21 justify a fivefold increase above the daily traded average.

With these expectations in place, a new $150 price target by UBS analyst John Lovallo makes a lot more sense now, justifying the implied rally of up to 28% from where the stock trades today.