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.
Aruba Networks (ARUN) provides enterprise mobility solutions worldwide. This stock closed up 4.2% to $19.59 in Friday's trading session.
Friday's Volume: 4.34 million
Three-Month Average Volume: 2.15 million
Volume % Change: 118%
From a technical perspective, ARUN spiked sharply higher here right above its 200-day moving average of $18.35 with above-average volume. This spike is starting to push shares of ARUN within range of triggering a near-term breakout trade. That trade will hit if ARUN manages to take out its 50-day moving average of $20.13 and then once it clears more near-term overhead resistance at $20.46 with high volume.
Traders should now look for long-biased trades in ARUN as long as it's trending above its 200-day at $18.35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.15 million shares. If that breakout materializes soon, the ARUN will set up to re-test or possibly take out its next major overhead resistance levels at $22.10 to its 52-week high at $23.85.