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.
AAON (AAON - Get Report), together with its subsidiaries, manufactures and sells air-conditioning and heating equipment in the U.S. and Canada. This stock closed up 9.2% at $31.57 in Monday's trading session.
Monday's Volume: 269,000
Three-Month Average Volume: 130,016
Volume % Change: 105%
From a technical perspective, AAON gapped up sharply higher here and broke out above some key near-term overhead resistance levels at $29.47 to $31.27 with heavy upside volume. Market players should now look for a continuation move higher in the short-term if AAON manages to clear Monday's intraday high of $31.92 with strong upside volume.
Traders should now look for long-biased trades in AAON as long as it's trending above Monday's low of $29.97 or above its 50-day at $28.27 and then once it sustains a move or close above $31.92 with volume that hits near or above 130,016 shares. If that move gets started soon, then AAON will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $34.27.