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.
Diamondback Energy (FANG - Get Report), an independent oil and natural gas company, focuses on the acquisition, development, exploration and exploitation of onshore oil and natural gas reserves in the Permian Basin in West Texas. This stock closed up 2.4% to $69.70 in Friday's trading session.
Friday's Volume: 1.46 million
Three-Month Average Volume: 898,736
Volume % Change: 83%
From a technical perspective, FANG jumped notably higher here with above-average volume. This move pushed shares of FANG into breakout and new all-time-high territory, after the stock took out some near-term overhead resistance at $68. Market players should now look for a continuation move to the upside in the near-term if FANG can manage to take out Friday's high of $69.90 with high volume.
Traders should now look for long-biased trades in FANG as long as it's trending above $67.50 or above more near-term support at $65 and then once it sustains a move or close above Fridays high of $69.90 with volume that hits near or above 898,736shares. If that move kicks off soon, then FANG will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that action are $75 to $80.