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Typically when any major index does a rebalancing, there is a large amount of buying and selling that takes place as the index resets to the new percentage assignments for the stocks in the index. Many of the stocks in the Russell 2000 are mid-cap and small-cap stocks with smaller floats than their S&P 500 large cap counterparts. This can lead to a sharper price spike in the stock, especially on a trading day where the volatility in the overall market has spiked. The VIX, which is the market volatility indicator, has jumped almost 40% in a little over a week, so the volatility component is indeed there.

The Quantitative Strategies team at Jefferies closely monitors the index changes. Many Quant driven funds actively traded index changes to capture the often small, but numerous changes in the stock prices. We screened the Jefferies list of stocks that will see major position adds for the rebalance. Some of them are among the top stocks to buy at the major firms we cover on Wall Street. A host of red-hot biotech names are also among the names that will see the highest share count being bought.

Exelixis Inc. (NASDAQ: EXEL) is a Buy rated stock at Piper Jaffray. The company is engaged in the development of small molecule therapies for treating cancer. It has an FDA-approved product, Cometriq, in the market for the treatment of progressive metastatic medullary thyroid carcinoma. The company is also trying to find new applications of Cometriq, and a number of clinical trials are underway to assess it for other indications. The Thomson/First Call price target for the stock is $7.57. The stock closed Thursday at $7.02.

FuelCell Energy Inc. (NASDAQ: FCEL) recently completed a large secondary offering to bolster its cash holdings. Priced well below where the stock was trading, some investors were not pleased. The good news for investors looking to buy the stock as a new position is it is still at a very good entry point. The consensus price target for the stock is $2.02. FuelCell closed Thursday at $1.42.

Golden Eagle Entertainment Inc. (NASDAQ: ENT) will have one of the highest share counts to be bought. The company provides in-flight video content, e-commerce and information services for airlines worldwide. The company offers satellite-based broadband services, including Internet access, live television, shopping and flight and destination information for airline passengers. Its Advanced Inflight Alliance business provides content services, such as movies and television programing, audio, games, applications and creative solutions. Almost 10 million shares are scheduled to be bought. The consensus price target for the shares is $20.17. The stock closed Thursday at $16.10.

Keryx Biopharmaceuticals Inc. (NASDAQ: KERX) was one of the top-performing biotech stocks last year, and it may be poised to repeat that performance in 2014. The excitement stems from its success in meeting primary and secondary endpoints in its phase III trials for Zerenex. The company has filed a new drug application for the drug with the FDA and expects an answer by June of this year. The consensus target is $23.20. Keryx closed Thursday at $15.86.

Meritage Home Corp. (NYSE: MTH) reported a 44% increase in revenue from home closings last quarter, with EPS up 421% for the third quarter and an astounding 583% in 2013. These metrics are largely being driven by a 22% increase in the average home sales price, as the company continues to grow its sales mix in the upscale market. The consensus estimate is $50.77, and Meritage closed Thursday at $47.03.

Nektar Therapeutics (NASDAQ: NKTR) is a top name to buy on Wall Street. The company’s clinical pipeline and list of big pharma partners are impressive to say the least. Despite having a whopping eight late-stage candidates, Nektar’s market cap is a paltry $1.3 billion. Its top drug, Naloxegol, is being developed as a once-daily oral tablet for the treatment of opioid-induced constipation, and it is licensed out to AstraZeneca. Piper Jaffray has confirmed the FDA panel has switched the drug to the Anesthetic/Analgesic category. This could increase the probability of approval. If the drug is approved next year, Nektar will receive up to $245 million in milestone payments — some of which has already been triggered by the filing of the new drug application. The consensus price target for the stock is $14. Nektar closed Thursday at $13.99.

Splunk Inc. (NASDAQ: SPLK) is another top name recently initiated as a Buy at Deutsche Bank. The company recently completed a 6 million share follow-on offering that was priced at $81. Splunk provides software solutions that provide real-time operational intelligence. The company offers Splunk, an engine that collects, indexes and harnesses machine data generated by physical, virtual or in-the-cloud IT infrastructure. It also offers Splunk Storm, a cloud version of Splunk to analyze cloud-based applications. The consensus price target for the stock is $78.19. Splunk closed Thursday at $77.42.

Workday Inc. (NYSE: WDAY) is another enterprise software name that has been on fire since its IPO and a recent secondary offering. At the HR technology conference in Las Vegas last fall, the company stole the show, according to many analysts who attended. The company’s presentation included a survey by HR consulting firm CedarCrestone, showing product adoption could more than double from 5% today to 12% in the next year. Merrill Lynch has not picked up coverage. The consensus price target for the stock is $85.91. Workday closed Thursday at $89.77. Hedge Fund manager Jim Chanos, who is bearish on almost everything, is actually long Workday stock.

Not only do index funds have to buy and sell the names in the rebalance, many portfolio managers that shadow the indexes will buy and sell the stocks as well. Typically stocks that are being added or increased have moved up in market cap value, therefore necessitating an increase in the index weighting. That increase often indicates a stock that could be on the move for good gains in the future.