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.
HollySys Automation Technologies
HollySys Automation Technologies (HOLI - Get Report) provides automation and control technologies and products to customers in industrial, railway, subway, nuclear power, building retrofit and mechanical and electronic industries primarily in the People's Republic China, Hong Kong, Southeast Asia and the Middle East. This stock closed up 5.4% at $21.54 in Monday's trading session.
Monday's Volume: 742,000
Three-Month Average Volume: 404,003
Volume % Change: 81%
From a technical perspective, HOLI ripped sharply higher here and broke out above some key near-term overhead resistance levels at $20.50 to its 52-week high at $21.34 with strong upside volume. This breakout pushed shares of HOLI above the upper-end of its recent sideways trading chart pattern, which is bullish price action. Market players should now look for a continuation move higher in the short-term if HOLI manages to take out Monday's high and its new 52-week high of $21.66 with high volume.
Traders should now look for long-biased trades in HOLI as long as it's trending above Monday's low of $20.60 or above $19.50 and then once it sustains a move or close above $21.66 with volume that this near or above 404,003 shares. If that move materializes soon, then HOLI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $25 to $30.