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.
Eaton Vance (EV - Get Report), through its subsidiaries, engages in the creation, marketing and management of investment funds in the U.S. This stock closed up 5.7% to $37.51 in Wednesday's trading session.
Wednesday's Volume: 1.01 million
Three-Month Average Volume: 786,229
Volume % Change: 268%
From a technical perspective, EV ripped sharply higher here back its 50-day moving average of $36.81 with heavy upside volume. This move pushed shares of EV into breakout territory, since the stock took out some near-term overhead resistance levels at $36.96 to $37.02. Shares of EV recently formed a major bottoming chart pattern, since the stock found buying interest each time it pulled back to around $35 a share. Shares of EV are now quickly moving within range of triggering another big breakout trade. That trade will hit if EV manages to take out Wednesday's high of $38.04 to some more key overhead resistance levels at its 200-day moving average of $38.87 to $38.98 with high volume.
Traders should now look for long-biased trades in EV as long as it's trending above Wednesday's low of $35.76 or above $35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 786,229 shares. If that breakout gets underway soon, then EV will set up to re-test or possibly take out its next major overhead resistance levels at $41 to $42, or even $43.