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.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
MacroGenics (MGNX - Get Report), a clinical-stage biopharmaceutical company, focuses on discovering and developing monoclonal antibody-based therapeutics for the treatment of cancer and autoimmune diseases. This stock closed up 4% to $24.17 in Wednesday's trading session.
Wednesday's Volume: 618,000
Three-Month Average Volume: 181,382
Volume % Change: 205%
From a technical perspective, MGNX ripped higher here right above some previous support from back in November of 2013 at $21.50 with strong upside volume. This spike higher on Wednesday is also coming off oversold levels, since its current relative strength index reading is 28.76. Oversold can always get more oversold, but it's also an area where a stock can make a significant rebound higher from.
Traders should now look for long-biased trades in MGNX as long as it's trending above Wednesday's low of $24.30 and then once it sustains a move or close above Wednesday's high of $24.30 to $25 with volume that hits near or above 181,382 shares. If that move kicks off soon, then MGNX could rebound higher towards $28 to $31, or even its 50-day moving average at $33.88.