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.
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With that in mind, let's take a look at several stocks rising on unusual volume recently.
Springleaf (LEAF), through its subsidiaries, offers consumer finance and credit insurance products and services. This stock closed up 6.3% at $26.14 in Friday's trading session.
Friday's Volume: 490,000
Three-Month Average Volume: 294,838
Volume % Change: 85%
From a technical perspective, LEAF spiked sharply higher here right off some near-term support at $24 and back above its 50-day moving average of $24.71 with above-average volume. This move is quickly pushing shares of LEAF within range of triggering a major breakout trade. That trade will hit if LEAF manages to take out some key near-term overhead resistance levels at $26.33 to its all-time high at $27.34 with high volume.
Traders should now look for long-biased trades in LEAF as long as it's trending above some near-term support levels at $24 or $23 and then once it sustains a move or close above those breakout levels with volume that's near or above 294,838 shares. If that breakout hits soon, then LEAF will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $33.