DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.
Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
Ubiquiti Networks (UBNT - Get Report), together with its subsidiaries, offers a portfolio of networking products and solutions for service providers and enterprises. This stock closed up 10.2% to $50 in Tuesday's trading session.
Tuesday's Volume: 4.49 million
Three-Month Average Volume: 1.06 million
Volume % Change: 334%
From a technical perspective, UBNT spiked sharply higher here and broke out into new all-time-high territory above resistance at $48 with monster upside volume. This powerful breakout saw shares of UBNT close very close to its intraday high of $50.30, since the stock finished the trading session at $50. Market players should now look for a continuation move higher in the short-term if UBNT manages to take out Tuesday's high of $50.30 with strong volume.
Traders should now look for long-biased trades in UBNT as long as it's trending above $48 or $46 and then once it sustains a move or close above its new all-time high at $50.30 with volume that hits near or above 1.06 million shares. If we get that move soon, then UBNT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $60 to $70.