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.
Ardmore Shipping (ASC - Get Report) is engaged in the seaborne transportation of petroleum products and chemicals for oil majors, oil companies, oil and chemical traders, and chemical companies worldwide. This stock closed up 8.9% at $13.65 in Wednesday's trading session.
Wednesday's Volume: 544,000
Three-Month Average Volume: 71,777
Volume % Change: 675%
From a technical perspective, ASC ripped sharply higher here right off some near-term support at $12.46 with monster upside volume. This stock had been downtrending badly for the last two months, with shares dropping from its high of $15.73 to its low of $12.46. During that move, shares of ASC have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this sharp spike higher on Wednesday now looks ready to push ASC out of its recent downtrend and into a new uptrend.
Traders should now look for long-biased trades in ASC as long as it's trending above $13 and then once it sustains a move or close Wednesday's high of $13.80 to its 50-day moving average at $14.17 with volume that's near or above 71,777 shares. If we get that move soon, then ASC will set up to re-test or possibly take out its next major overhead resistance levels at $14.81 to $15, or even its 52-week high at 15.84.