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.
Super Micro Computer
Super Micro Computer (SMCI - Get Report), together with its subsidiaries, develops and provides high-performance server solutions based on modular and open-standard architecture in the U.S. and internationally. This stock closed up 10.1% to $19.76 in Friday's trading session.
Friday's Volume: 989,504
Three-Month Average Volume: 476,478
Volume % Change: 121%
From a technical perspective, SMCI ripped sharply higher here right off its 50-day moving average of $18.52 with above-average volume. This move pushed shares of SMCI into breakout territory, since the stock took out some near-term overhead resistance at $18.99. Market players should now look for a continuation move to the upside in the short-term if SMCI can manage to take out Friday's intraday high of $19.88 with high volume.
Traders should now look for long-biased trades in SMCI as long as it's trending above its 50-day at $18.52 and then once it sustains a move or close above $19.88 with volume that hits near or above 476,478 shares. If that move kicks off soon, the SMCI will set up to re-test or possibly take out its next major overhead resistance levels at $20.60 to $21.12. Any high-volume move above those levels will then give SMCI a chance to tag its next major overhead resistance levels at $21.97 to $22.85.